After finding that retail investors didn’t get much benefit from detailed climate disclosures that are based on the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), the U.K.’s Financial Conduct Authority (FCA) is now proposing to drop those requirements — a step that could save investment firms £20 million per year in compliance costs, the regulator said.
The FCA launched a consultation on proposed changes to its climate reporting rules — including a proposal to drop the requirement that firms provide investors with product-level reports that include TCFD-based disclosures. It also proposes to replace those requirements with “fewer, more targeted, and more outcomes-based rules.”
The regulator said that the aim of the proposed reforms is still to ensure that investors get useful information from firms about climate-related risks, while giving firms “more flexibility” in how they communicate those risks.
The proposal follows a review of the impact of rules adopted by the FCA in 2021 that set climate disclosure rules for asset managers, life insurers and pension providers. Among other things, those rules require firms to publish annual reports at both the firm level, and at the product level that include carbon metrics and climate scenario analysis.
The regulator’s post-implementation review of those requirements, which was carried out in 2025, found that investors, particularly retail investors, had low levels of engagement with the required product-level disclosures.
“Consumer groups told us that their research suggests retail investors consider the TCFD product reports too long and complicated to understand,” the regulator noted in its consultation.
“Nevertheless, consumer representatives thought retail investors are generally interested in knowing how climate change could impact their investments,” it added.
And, while institutional investors found the information contained in the disclosures to be important, they generally acquired that information directly from the firms themselves, rather than through the public reports, “as this better meets their specific information needs.”
The review also found that, while investment firms said that TCFD reporting has been helpful for raising awareness of climate risks, “they don’t consider product-level TCFD reporting to be a useful climate risk management tool as they have their own ways of identifying and monitoring climate risks.”
Additionally, industry firms argued that the FCA should consider the competitive impact of being required to publish these reports, as these same disclosures aren’t required in other markets.
Based on the findings of this review, the FCA is now proposing to simplify its product-level climate disclosure rules “to reduce undue burden on firms while still meeting our intended policy outcomes.”
Indeed, the regulator estimated that its proposed changes could save the industry £20 million annually.
“These proposals will make it easier for firms to communicate with their customers in ways that genuinely inform and engage them,” said Michelle Beck, director of wholesale buy-side at the FCA, in a release.
The FCA said that it’s also considering ways to streamline the firm-level reporting requirements, but that it’s not proposing any changes in that area just yet.
The consultation is now open until July 13. The FCA said that it aims to implement the rule changes in the autumn.