- For the first time, government annual reports reveal how
risks such as flooding and overheating could affect a wide range
of public services including transport, health and prisons.
- The NAO has reviewed disclosures from 31 public bodies and
found a mixed picture: some explain their climate risks and
possible consequences clearly, while reporting by others is less
mature.
- Parliament needs clear information on the resilience of
public services, infrastructure and finances to climate change.
We expect this reporting to become more useful over time, says
head of the NAO.
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.1,2
HM Treasury has mandated climate-related reporting for larger
central government bodies. Beginning in the 2025-26 financial
year, their 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. 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.
- 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 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.
, 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.
ENDS
Notes to editors
- As part of our financial audit work, we reviewed the quality
of the 2025-26 climate-related financial disclosures for 31 of
our audited bodies, including central government bodies and
public corporations. We assessed each body for compliance with
the applicable framework. For the full list and a description of
this review, see the evidence base at the end of the report.
