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The UK’s Financial Conduct Authority (FCA) has proposed removing TCFD-aligned product-level climate disclosures, replacing them with simpler retail disclosures and on-demand institutional reporting in a move expected to save firms around £20 million annually.
The proposal marks a clear shift in regulatory approach. Rather than requiring standardised, public-facing reports for all investors, the FCA is moving towards a more targeted model that differentiates between retail and institutional use cases and prioritises decision-relevant information over completeness.
At the core of the change is a reassessment of how climate disclosures are actually used. While the FCA’s existing regime improved internal risk processes and governance, its recent review found limited engagement from end users, particularly retail investors. The issue is not demand for climate information, but its usability in practice.
Institutional investors already operate outside the standardised model. Public disclosures are rarely the primary input into investment or oversight decisions. Instead, asset owners and consultants request specific datasets directly from managers, tailored to their reporting frameworks and portfolio construction needs. The FCA’s proposal formalises this reality.
Under the proposed regime, product-level TCFD reporting would be removed entirely. In its place, retail disclosures would focus on whether climate risks and opportunities are materially relevant to financial performance; and Institutional investors could request key data, including Scope 1, 2 and 3 emissions, limited to one request per product per year.
This represents a move from periodic, standardised reporting to a more transactional model. Climate information for retail investors becomes integrated into financial positioning. For institutional investors, access to underlying data becomes more direct but less publicly visible.
The implications are structural. Disclosure shifts from a compliance exercise to a client service function. Firms will need to demonstrate they can respond efficiently to bespoke data requests, rather than relying on static reports.
For stewardship and governance teams, the change is operational and significant. Data readiness becomes critical, requiring teams to ensure underlying climate data is accessible, consistent and auditable at short notice, particularly where requests are limited in frequency. This should force issuers to be consistently prepared for climate data reporting, but transparency and comparability for institutional investors looking through disclosures may take a hit. Without a standardised template, benchmarking across managers and products becomes more complex, particularly for portfolio-level oversight.
The “one request per year per product” constraint is particularly significant. It introduces a sequencing challenge for institutional investors, who will need to anticipate data requirements in advance. It may also create incentives for firms to standardise their own internal data packs to manage client demand efficiently, though these processes may differ significantly from firm to firm.
For providers of stewardship and governance infrastructure, this reinforces the need to support structured data collection, audit trails and consistent formatting across portfolios. These are central tenets to Minerva’s own data collection and provision as a stewardship and governance service provider.
It does not go unnoticed that the FCA’s direction is consistent with the UK Stewardship Code 2026, which also moves away from prescriptive reporting towards a more flexible, outcome-oriented framework. Both reforms reflect a broader regulatory judgement that increasing the volume of disclosure does not necessarily improve transparency or decision-making.
Instead, the emphasis is on proportionality and relevance. Information should be tailored to its audience and linked more clearly to financial outcomes. For stewardship professionals, this raises expectations around demonstrating how climate considerations influence investment decisions and engagement activity, rather than simply reporting metrics.
Reduced reporting burden, lower costs and more targeted information flows are likely to be welcomed by firms and many investors. However, the trade-offs are equally material:
The proposal effectively transfers responsibility for standardisation from regulators to the market. Whether this leads to innovation in data delivery or a more fragmented landscape will depend on how quickly common practices emerge.
For asset managers, success under the new regime will depend less on producing comprehensive reports and more on delivering clear, timely and decision-useful data on request.
For asset owners, the shift requires a more deliberate approach to data collection. Defining what to ask for, when, and in what format becomes a core capability rather than an administrative task.
For stewardship teams, the link between climate data and financial outcomes will need to be articulated more explicitly, particularly in retail-facing communications.
The FCA’s proposals reflect a broader global shift, but one that is increasingly fragmented.
In the EU, the Omnibus reforms to CSRD and CSDDD aim to reduce burden by narrowing scope and delaying implementation, while retaining a standardised, disclosure-led framework. In contrast, the US SEC’s recent proposal to rescind its climate rules represents a more fundamental pullback, leaving disclosure largely to company judgement under materiality.
Together this points to diverging models, with the UK moving towards investor-driven disclosure, the EU preserving structured reporting, and the US stepping away from prescriptive requirements. For global investors, this raises the likelihood of parallel reporting systems and reduced comparability across markets.
The FCA has opened a consultation on the new proposals, open for responses until July 13, 2026.
