Quick Guide: Key Sustainability Disclosure Regimes: UK TCFD aligned reporting requirements for asset managers

Finalised in December 2021, the FCA’s rules and guidance require asset managers and certain FCA-regulated asset owners to make mandatory disclosures consistent with the TCFD recommendations on an annual basis at: 

• Entity level – an entity-level TCFD report setting out how they take climate-related risks and opportunities into account in managing or administering investments on behalf of clients and consumers.
• Product or portfolio level – a baseline set of consistent, comparable disclosures in respect of their products and portfolios, including a core set of metrics.

The FCA’s rules aim to increase transparency on how firms are managing climate-related risks and opportunities and enable clients and consumers to make considered choices, while also remaining proportionate. This should, in turn, help to enhance competition in the interests of consumers, protect consumers from unsuitable products, and drive investment towards greener projects and activities.

For more information on the TCFD, see the TCFD Quick Guide.

The rules apply to:

• Asset managers. This covers:
  • investment portfolio managers, with portfolio management defined as managing investments or private equity or other private market activities,
  • UK UCITS management companies,
  • full-scope UK alternative investment fund managers (“AIFMs”), and
  • small authorised UK AIFMs; and
• Life insurers and FCA-regulated pension providers (called “asset owners”). This covers:
  • life insurers (including pure reinsurers) in relation to insurance-based investment products and defined contribution (“DC”) pension products, and
  • non-insurer FCA-regulated pension providers, including platform firms and self-invested personal pension (“SIPP”) operators, to the extent that SIPP operators provide a ready-made selection of investments.

The rules do not apply to asset managers and asset owners with less than £5 billion in AUM or administration (calculated on a 3‑year rolling average basis with respect to specified ‘TCFD in-scope business’).

The core rules are contained in chapter 2 of the FCA Handbook ESG Sourcebook, which only applies to business carried out from a UK establishment. It does not apply to non-UK business.

The rules and guidance apply to the firms responsible for disclosures at a product or portfolio level.

For asset managers, the following products and portfolios are known as "TCFD products":

• Authorised funds (excluding feeder fund and sub-funds in the process of winding up or termination).
• Unauthorised alternative investment funds (“AIFs”), managed by a UK AIFM.
• Portfolio management services.

For asset owners, the following products are within scope:

• Insurance-based DC pension schemes (for example, personal pensions and stakeholder pensions, including both workplace and non-workplace pensions (unit-linked and with-profits)).
• Non-insurance DC pension schemes (for example, funds-based or offered by platform firms).
• SIPPs, either insurance or non-insurance-based, where the SIPP operator offers investments to be held within its SIPP wrapper.

The FCA’s climate disclosure rules have applied:

• from 1 January 2022 for asset managers with AUM of more than £50 billion and asset owners with at least £25 billion in AUM or administration relating to in-scope business (the deadline for first publishing disclosures having been 30 June 2023);
• from 1 January 2023 for smaller firms above the £5 billion threshold (the deadline for first publishing disclosures having been 30 June 2024). 

In August 2025, the FCA completed a review of TCFD-aligned disclosures by asset managers and FCA-regulated asset owners and published its findings.  In light of these findings, it is considering how to streamline and enhance its sustainability reporting framework. For more information, see our blog post: UK: FCA considers simplifying climate reporting requirements for asset managers.

Firms are required to publish a TCFD entity report and TCFD product reports, consistent with the TCFD recommendations and recommended disclosures, by 30 June each year in a prominent place on the firm’s main website. (TCFD product reports must also be included in client communications closely following the annual reporting deadline – such as the annual fund report or periodic client report.) The report needs to follow the TCFD structure and outline how the firm considers climate-related risks and opportunities when managing investments. 

Content requirements for entity level reports (which set out how a firm takes climate-related risks and opportunities into account when managing or administering investments) are set out in the FCA Handbook at ESG 2.2.  Specific rules for the product level reports (which will provide a baseline set of consistent, comparable disclosures, with a core set of metrics including on greenhouse gas emissions, total carbon emissions/footprint and the weighted average carbon intensity of each portfolio) are set out at ESG 2.3.   

In ensuring consistency with the TCFD recommendations and other relevant material, the following material is specifically identified by the FCA as being relevant to firms when drafting their climate-related financial disclosures:

• Firms should take reasonable steps to ensure their reports reflect the following:
  • Section C of the TCFD Annex (Guidance for All Sectors).
  • Part 3, section D of the TCFD Annex (Asset Owners).
  • Part 4, section D of the TCFD Annex (Asset Managers).
• Firms should also take into account the following supplemental documents:
  • TCFD Final Report and other aspects of the TCFD Annex;
  • TCFD Technical Supplement;
  • TCFD Guidance on Risk Management Integration and Disclosure;
  • The TCFD Guidance on Metrics, Targets, and Transition Plans.

All of these documents can be accessed via our TCFD Quick Guide.

The rules apply at a legal entity level – as such, calculation of AUM and production or reports is on a legal entity basis. There is scope for cross-referencing, subject to a requirement to provide a rationale for relying on third party disclosures, and explaining any deviations between the third party’s approach and that of the firm.

On demand product level reports

There is acknowledgement that public disclosures are not appropriate for some client relationships. As such, the rules also provide for on-demand TCFD product reports and underlying data.

On 6 August 2025, the FCA published its findings following a review into climate reporting by asset managers, life insurers and FCA regulated pension providers under ESG 2 (see our blog post). 

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.

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.

Firms must:

• Entity level: include the contents of their TCFD entity report (or a hyperlink to it) in their sustainability entity report.
• Product level: when producing a product-level sustainability report, include the contents of their TCFD product reports (or a hyperlink to them).

The FCA has updated its website to confirm that firms can, but are not required to, align their UK SDR reporting periods to their existing TCFD reporting (with examples of how dates might be aligned provided on the webpage).  Whichever approach a firm takes, it must ensure that its first sustainability entity report covers a reporting period of 12 months. It must also ensure that, when changing the reporting periods for subsequent reports, an interim report is issued, where necessary, to ensure there is no period of time left unaccounted for.

• FCA Handbook ESG Sourcebook (core rules ESG2) 
• FCA Policy Statement: Enhancing climate-related disclosures by asset managers, life insurers and  FCA-regulated pension providers (PS21/24)
• FCA Sustainability reporting requirements webpage
• FCA: Climate reporting by asset managers, life insurers and FCA-regulated pension providers multi firm review findings (August 2025)

• Sustainable Finance Survival Guide
• Our blog post on the FCA’s August 2025 multi firm review on climate reporting
• Quick Guide: UK Sustainability Disclosure Requirements and Investment Labels (UK SDR)
• TCFD Quick Guide