UK: FCA considers simplifying climate reporting requirements for asset managers

The Financial Conduct Authority has announced that it is considering how to simplify sustainability reporting for asset managers, life insurers and FCA-regulated pension providers, to help reduce greenwashing and ease unnecessary burdens. The announcement follows the FCA’s multi-firm review which examined how its climate disclosure rules had been working for these firms. 

The rules, which started to apply from 1 January 2022, require firms to disclose climate-related information in line with the Task Force on Climate-related Financial Disclosures (TCFD) recommendations (see our earlier blog post).

The FCA’s review covered a sample of 10 entity-level and 77 product-level reports as well as gathered views from trade associations and seven financial institutions in scope of the FCA’s reporting rules.

“Too complex”

Overall, the FCA found that its rules had increased firms’ consideration of climate risks and supported their integration into firms’ decision-making. More specifically, the findings included:

• The rules have helped firms be more transparent with their clients and consumers but some firms encountered challenges with obtaining data and in developing consistent ways to use this in climate reporting.
   
• Whilst detailed climate disclosure information is helpful for institutional investors, some firms found that the disclosures may be too complex for retail investors to engage with.
   
• Entity reports were broadly accessible from a firm’s main webpage but product reports were often difficult to find, which the FCA said may have contributed to the lower levels of engagement at the product level by retail investors.
   
• Firms could report on backward looking data such as carbon emissions but some firms found it more challenging to provide measurable data to support future looking disclosures like analysis of scenarios.
   
• Firms, particularly asset managers, suggested that the FCA rules were too granular and suggested that sustainability disclosures could be simplified and streamlined, particularly given their broader sustainability disclosure obligations.
   
• Firms requested the FCA to clarify the future of its TCFD rules and encouraged it to consider international consistency while working with industry to develop a future regime that is practical for firms.

Next steps 

In light of the review, the FCA states that is now considering how to simplify its disclosure requirements to ease unnecessary burdens, improve the decision-usefulness of reporting and ensure international alignment.

The FCA has also updated its sustainability reporting requirements webpage to clarify how firms in scope of both its TCFD and Sustainability Disclosure Requirements (SDR) rules can align reporting from 2026.

The FCA plan to work closely with the Government and engage further with industry to guide its next steps.

The FCA multi-firm review webpage published on 6 August 2025 is available here.