UK FCA retains “comply or explain” climate reporting after 92% disclosure rate

On September 30, Reuters reported that the UK Financial Conduct Authority dropped a proposal to make a new climate-reporting standard mandatory for listed companies and instead retained its existing “comply or explain” model. The FCA said 92% of FTSE 350 companies reviewed had disclosed climate risks in their 2025 annual reports, while respondents had raised compliance-cost and competitiveness concerns. Issuers and advisers should not interpret the decision as removing climate-risk expectations: the burden shifts toward explaining omissions and maintaining decision-useful, comparable evidence without a fully mandatory template. Corporate counsel should align sustainability, finance and listing-rule controls so that any decision not to disclose can withstand investor and regulator scrutiny.