FCA proposes to remove product-level TCFD reports for asset managers and insurers, targeting £20m in annual savings (CP26/17)
The FCA published CP26/17 on 5 June 2026, proposing to remove mandatory product-level TCFD reporting for asset managers, life insurers and FCA-regulated pension providers and replace it with a narrower set of targeted obligations split by client type. Firms in scope must respond by 13 July 2026.
What was published
CP26/17, the FCA's 52nd quarterly consultation paper, proposes to remove product-level TCFD reporting requirements from the ESG sourcebook, including prescribed metrics and climate scenario analysis. The proposals sit in Chapter 2 of the paper and the draft rule changes are set out in the Disclosure of Climate-Related Financial Information (Asset Manager and Asset Owner) (Amendment) Instrument 2026.
Who is affected
Asset managers, life insurers and FCA-regulated pension providers currently subject to the product-level climate disclosure rules introduced under PS21/24. The FCA estimates around 261 asset managers and around 34 asset owners managing roughly 9,000 products are in scope. Entity-level TCFD reporting is not within scope of these proposals and will remain in place.
What would change
The existing product-level TCFD reports would be replaced with two narrower obligations.
For retail clients: firms would periodically assess whether climate risks or opportunities are materially relevant to a product's financial performance and, where they are, disclose them in retail client communications covering risk and financial returns. Not every product would require disclosure.
For institutional clients: firms would provide Scope 1, Scope 2 and Scope 3 greenhouse gas emissions data on request, limited to once per calendar year per product, where the client needs the data for its own climate disclosure obligations. Where data gaps or methodological challenges cannot be resolved using proxies or assumptions without producing a misleading result, firms are not required to disclose the emissions data.
For firms also in scope of the Consumer Composite Investment regime, the FCA suggests that retail climate risk disclosures could be incorporated within the risk and return section of a CCI product summary. The FCA notes this would be separate from sustainability disclosures required under ESG 5.1.1R, which would continue to apply alongside the new retail disclosure obligation.
Why the FCA is acting
A 2025 post-implementation review covering 10 entity reports and 77 product reports from 8 entities found low engagement with the existing product reports. Consumer groups told the FCA that retail investors found the reports too long and complicated. The review also found that only around half of product reports disclosed the impact of all three required climate scenarios, as required under the existing rules, suggesting uneven compliance in practice. Institutional investors, meanwhile, typically obtained climate data by engaging directly with firms rather than via the mandated public reports. Firms told the FCA the reports were costly to produce and placed UK investment products at a competitive disadvantage relative to non-UK products not subject to equivalent obligations.
Cost impact
The FCA estimates ongoing industry savings of around £20 million per year, with a present value of approximately £174 million over a ten-year appraisal period. The FCA has not conducted a formal cost-benefit analysis, because the simplified rules do not impose new obligations on firms and any cost increase would be of minimal significance.
Timing and next steps
The consultation closes on 13 July 2026 for Chapters 2 to 7. The FCA aims to finalise and implement the rule changes in autumn 2026. Until final rules are made, the existing product-level TCFD requirements remain in place.
CP26/17 also contains proposals unrelated to climate disclosure, which the FCA has not linked to the climate-reporting changes. Firms whose business is limited to asset management or insurance should check whether any of the following proposals apply to them: allowing certain authorised funds to hold cryptoasset exchange traded notes up to 10% of scheme property; removing the notification requirement for approvers of qualifying cryptoasset financial promotions; and making consequential amendments to UK CRR references in the FCA Handbook.
