The FCA proposed on 5 June 2026 a significant simplification of its climate disclosure regime aligned with the recommendations of the Taskforce on Climate-related Financial Disclosures (TCFD) for investment products, as part of Quarterly Consultation Paper CP26/17.
The proposals follow the FCA’s post-implementation review of climate disclosure requirements for asset managers, life insurers and FCA-regulated pension providers (published August 2025). In its review, the FCA found limited engagement with TCFD product reports, particularly among retail investors, while institutional investors generally obtain climate data directly from firms.
The FCA proposes to remove TCFD product reports and replace them with fewer, selected climate disclosure requirements for retail and institutional investors, whilst still preserving entity TCFD reports. The changes aim to reduce reporting burdens but retain information flows to investors. The FCA says it will continue to explore streamlining entity-level disclosure rules, but they are not included within this consultation.
In this article
What does this mean?
The FCA proposes to remove the existing TCFD product reporting framework, including both public and on-demand TCFD product reports. These requirements would be replaced with a more targeted, outcomes-based approach: retail-facing disclosures would focus on financially material climate-related risks and/or opportunities (CROs), while institutional clients would retain a route to request core greenhouse gas (GHG) emissions data.
For retail disclosures, the product scope would align with the current public TCFD product reporting rules. For institutional client communications, the scope would cover products currently in scope of both public and on-demand TCFD product reporting.
Communicating with retail investors
The FCA proposes a new rule requiring firms to periodically assess whether CROs are materially relevant to the financial performance or returns of a product. Where firms determine this to be the case, they would be required to disclose the relevant climate-related information that provide general information on risk and financial returns in a client-friendly format. Importantly, the FCA says it would not expect climate disclosures for every product.
There is also flexibility in the FCA’s proposed approach. Firms could leverage existing risk assessment processes and incorporate climate information into existing product disclosures. For products also subject to the Consumer Composite Investment (CCI) regime, firms could disclose materially relevant CROs within the risk and return section of the product summary.
Communicating with institutional clients
The FCA also proposes replacing the current on-demand TCFD reporting framework with a simplified information-sharing regime. Under the proposals, firms would be required to provide, at a minimum, Scope 1, 2 and 3 GHG emissions data. This information would need to be provided where an institutional client requests it to meet its own climate-related disclosure obligations. Requests would be limited to once per calendar year, per product.
The FCA considers that institutional investors should be able to derive additional metrics from the underlying GHG emissions data where needed. It also proposes retaining guidance encouraging firms to provide further climate or carbon-related information where reasonably required by clients for their own reporting, subject to feasibility and contractual arrangements.
Consequential amendments
The FCA proposes a range of consequential amendments across the FCA Handbook. These include:
removing product-level climate scenario analysis requirements;
removing the requirement for Sustainability Disclosure Requirements (SDR) product reports to include TCFD product reports or hyperlinks to them;
removing references to TCFD product reports from the Environmental, Social and Governance sourcebook;
removing references to TCFD product reports from Collective Investment Schemes reporting requirements; and
reframing various references from “TCFD-related” reporting to broader “climate-related” reporting.
What do firms need to do?
Identify which products have institutional clients that may require on-demand data.
Review whether a process is in place to assess the materiality of CROs to fund performance on a fund-by-fund basis.
Assess how the proposals interact with existing and anticipated sustainability and fund reporting obligations, including SDR, CCI disclosures and TCFD entity reporting.
The consultation does not affect the upcoming TCFD reporting deadline. Firms should still publish TCFD product reports by 30 June 2026, based on 2025 data.
The FCA has also indicated that it will continue to explore opportunities to streamline entity-level disclosure requirements. Firms should monitor future developments closely as part of the wider evolution of the UK sustainability reporting framework.
While standalone TCFD product reports would no longer be required, much of the underlying analysis, governance and data collection will remain relevant. Firms should identify opportunities to simplify reporting, reduce duplication and improve operational efficiency across the proposed retail and institutional disclosure requirements.
Retail-facing disclosures
The proposed retail disclosure framework places greater emphasis on product-level materiality. Asset managers would need to assess whether CROs could be materially relevant to the financial performance or return of each fund. While this may require firms to apply a different lens from existing sustainability risk, SDR or product governance assessments, firms should aim to embed this assessment into existing BAU processes.
Firms will also need to decide what “periodically” means in practice for reassessing this materiality, as the FCA has not prescribed a frequency, and what might trigger an earlier review (e.g. where there are significant changes to the fund or market conditions).
Where CROs are financially material, firms will need to decide where and how to include this information in retail-facing disclosures. Existing requirements, including the Consumer Duty and anti-greenwashing rule, will remain relevant when determining how this information is presented. Firms should decide where they plan to include these disclosures and align this work with related disclosure workstreams, including CCI disclosures.
Importantly, the scope of the FCA’s proposals is not aligned with its SDR investment labelling and associated ‘naming & marketing’ rules. This means a fund does not need to pursue a sustainable objective or strategy, or use an SDR label, for CROs to be material to its performance.
Institutional client reporting
Asset managers should review products in scope of current TCFD rules to identify which have institutional clients that may need the new disclosures. This should cover products subject to both public and on-demand TCFD product reporting.
Firms should assess whether they have sufficiently comprehensive and robust data to disclose Scope 1, 2 and 3 GHG emissions for those products. Where there are data gaps, methodology limitations, or other issues that would prevent disclosures, firms should develop a plan to address them.
Additionally, asset managers should engage with key institutional clients to understand what information they will need and when. This will support planning around data collection, reporting timelines and any changes needed to existing processes or client reporting arrangements.
Next steps
The consultation closes on 13 July 2026. Final rules are expected later in the autumn.
Contacts
David Croker
Gemma Jones
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