A new report by the National Audit Office (NAO) examines the government’s response to climate-related risks and the strength of its sustainability reporting.
Based on the financial disclosures of 31 public bodies, it reveals how climate change could have serious consequences for public services and infrastructure, and a mixed picture of the government’s resilience.
HM Treasury has mandated climate-related reporting for larger central government bodies. Beginning in the 2025-26 financial year, its annual reports must publish the impacts, timelines and costs of their significant climate-related risks.
While most bodies are still at an early stage in reporting, the best disclosures provide new insight into the risks that bodies face, and potential implications. For example, Train companies already report flooding, high winds and landslides leading to delayed and cancelled services. The NAO said that financial losses due to climate change will rise in future, with the potential for some routes to become financially unviable or inoperable later this century in the worst-case scenario.
In addition, 89% of prisons were disclosed as high risk of flooding and 71% at high risk of overheating, potentially causing risks to staff and prisoners’ health and safety. Climate scenario analysis will inform the prison service’s investment planning, the NAO added.
The new report from the independent public spending watchdog drew the following insights from the first year of full mandated climate-related reporting across government:
- Central government bodies took different approaches to assessing and reporting their climate-related risks, resulting in varied conclusions.
- Many government bodies identified similar climate-related risks, particularly flooding and overheating.
- Few bodies explained fully what climate-related risks could mean for their services, future plans and finances.
- Climate scenario analysis was limited, but where used it helped bodies understand future costs, risks to services and investment decisions.
- Most disclosures did not include enough targets or measures for readers to judge how effectively bodies were managing climate-related risks.
- Reporting on climate-risk governance and management improved in 2025-26 compared with 2024-25.
Gareth Davies, head of the NAO, said:
“UK public services will need to adapt to the impacts of climate change. Parliament needs clear information on the resilience of infrastructure, service provision and finances to climate change, and on how these risks are being managed.”
“Although public bodies are still learning how best to report their most pressing climate risks, the requirement on all large central government bodies to make such disclosures from 2025-26 is an important first step. We expect this reporting to become more useful over time.”
Image of report courtesy of the NAO
