Britain’s financial regulator scales back corporate climate rules

Britain’s financial regulator has dropped plans to require listed companies to inform investors about ​their climate risks after firms raised concerns about implementation ‌costs and competitiveness. The Financial Conduct Authority proposed in January requiring listed companies to meet a new UK climate standard, which covered ​financially material, climate-related risks and opportunities, climate targets ​and the potential impact of climate change on their ⁠business. But in final rules published earlier this week, the watchdog ​said companies would instead be allowed to maintain the “comply ​or explain” approach. The move follows steps by the European Union to water down its flagship corporate climate disclosure regime and after the climate-sceptic ​Trump administration in the United States ditched plans for ​any rules in the world’s biggest economy. Feedback to the proposal questioned ‌whether ⁠mandating UK SRS S2, the UK-endorsed version of the International Sustainability Standards Board’s climate standard, would be proportionate and support the international competitiveness of companies operating in the UK, ​the FCA said. The ​FCA first ⁠introduced rules in 2020 asking premium-listed companies to disclose climate-related risks to investors in ​line with the global Task Force on Climate-related ​Financial ⁠Disclosures (TCFD) framework, or explain why they had not done so. The rules were later extended to other categories of listed ⁠issuer. The ​regulator’s review of FTSE 350 companies’ ​2025 annual reports found that 92 per cent complied with the TCFD.