The Financial Conduct Authority is proposing to simplify climate reporting for investment products, estimating that the changes could save investment companies around £20m a year while giving investors more targeted information on financially material climate risks.
The regulator wants to replace detailed product-level reports based on the Task Force on Climate-related Financial Disclosures with simpler information for retail investors. Institutional clients would be able to request key emissions data, but companies would no longer need to publish it in full product-level reports.
Current rules have improved awareness of climate risks, according to the FCA, but product-level reports are often viewed as too complex and are not widely used by investors. The consultation is open until 13 July 2026, with the regulator aiming to finalise and implement the rule change in the autumn.
Michelle Beck, director of wholesale buy-side at the FCA, said the regulator was “cutting complexity” while maintaining useful information for investors.
The proposals form part of the FCA’s wider work to streamline sustainability reporting requirements for asset managers and FCA-regulated asset owners. They also sit alongside the Sustainability Disclosure Requirements regime, which is designed to help retail investors navigate sustainable investment products and reduce greenwashing.
After several years of expanding disclosure frameworks, ESG regulation is entering a more practical phase. Regulators are trying to make climate and sustainability information more usable, proportionate, and aligned with consumer outcomes. The volume of disclosed data is no longer the only test; its usefulness is increasingly being examined.
That balance is difficult. Detailed product-level climate reporting can improve transparency and comparability, but it can also become technical, costly, and poorly understood by retail investors. Simpler disclosures may reduce compliance burden and improve engagement, provided they do not remove information needed to assess risk properly.
The FCA’s Consumer Duty focus is central to the proposal. Retail investors need information that explains how floods, storms, transition risks, or emissions exposure could affect product performance. Dense technical reports are less likely to support consumer decision-making. Institutional investors, by contrast, may still need emissions data for portfolio analysis, stewardship, regulatory reporting, and mandate design.
Asset managers will welcome the estimated cost saving, particularly as regulatory change across sustainable finance, fund labelling, anti-greenwashing rules, and entity-level disclosure has increased compliance workload. Simplification, however, should not be read as a retreat from climate-risk oversight. The FCA is still focused on information that investors can use to assess financially material risk.
The move also lands during wider financial-services reform. Calls for stronger UK-EU financial services cooperation have highlighted industry concern over duplicated or fragmented rules. Climate reporting reform sits inside the same competitiveness debate: high standards carry more value when disclosure architecture is usable and proportionate.
Asset managers will need to review how the proposed model changes reporting processes, client communications, data systems, and product governance. Removing full published product-level emissions reports would not eliminate the need to maintain robust underlying data, especially where institutional clients request it.
The consultation may also draw criticism from those concerned that removing TCFD-based product reports could weaken comparability for sustainable investment products. The FCA will need to show that targeted disclosures can preserve accountability while reducing unnecessary complexity.
Climate reporting is moving into a phase where regulators are testing whether existing rules deliver information that investors actually use. The FCA’s proposals suggest that usefulness, proportionality, and consumer comprehension are becoming as central to sustainability disclosure as the quantity of data published.
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