There are examples of good practice that have helped public sector bodies make effective use of the new TCFD reporting requirements, but even bodies who were well set up for the new requirements will need continued work to reach the point where their disclosures will be a useful tool to support scrutiny and decision-making, a new NAO report finds.

Central government bodies, Parliament and other senior decision-makers need practical, relevant information on how climate-related risks will affect operations and public service delivery. Climate-related reporting in annual reports supports accountability and transparency on how these risks are being managed.

The UK was among the first jurisdictions in the world to introduce an internationally recognised framework of climate-related disclosure into Central Government annual reporting.

Central government bodies have found the framework useful, even in its infancy, reporting that they see improved understanding and management of climate-related risks, better financial management and identification of potential cost efficiencies. 

As government is still in the early stages of implementing the new reporting requirements, a new NAO report has identified enablers which have supported bodies to make a good start on TCFD-aligned reporting, these include: 

• Ownership by an appropriately senior stakeholder – Ensure there is an identified appropriately senior stakeholder in the organisation responsible for the approach to climate related risk 
• Collaborative and cross-functional working – Successful climate-related reporting requires an integrated response across government professions, such as finance, sustainability, risk, policy and delivery 
• Considering a broad range of climate-related risks – Examine physical, transition and public sector climate risks that might be relevant to the organisation, beyond the scope of existing estates and operations reporting 

• Capability and access to external expertise – Assess whether they have the internal expertise required, but where they identify gaps, public bodies should consider opportunities for training or draw on external expertise

These enablers draw on the NAO's review of central government bodies implementation of TCFD-aligned reporting, which found that there is a risk that the process will be delayed by a lack of clarity about the full scope of climate-related factors they are expected to assess.

In addition, some central government bodies have experienced challenges interpreting the guidance and collecting the data they need to meet reporting requirements. 

While HM Treasury has made a good start in supporting the implementation of the new reporting requirements, offering guidance and bespoke support, it does not yet have a formal plan for oversight and support beyond 2026.

Gareth Davies, head of the NAO, said:

"The emerging climate reporting requirements are helping public bodies assess the risks to service resilience. Our report points to early good practice in maximising the value of this work."