The UK Financial Conduct Authority (FCA) has proposed measures to simplify product-level climate-related disclosure requirements.
In 2021, the regulator introduced TCFD-aligned rules for asset managers, life insurers and regulated pension providers to annually report carbon metrics and climate scenario analysis for their products.
A 2025 review found low levels of investor engagement on TCFD product reports as many find them too long and complicated to understand, while institutional investors tend to obtain climate data through direct engagements.
The FCA has therefore proposed replacing these TCFD-aligned rules with targeted outcomes-based reporting requirements.
Under its proposal, in-scope firms would disclose any climate-related risks and opportunities that are materially relevant to the financial performance of a product. They would also be required to provide GHG emissions data when requested by institutional investors.
These proposed changes are estimated to save investment firms around £20m a year. A public consultation on the draft rule changes is open until 13 July.