The National Audit Office found that bodies often could not put even approximate costs on anticipated climate risks and gave less detail about the transition to lower-carbon energy than about physical threats.
UK public bodies expect climate change and the shift to a lower-carbon economy to bring financial costs, but often cannot estimate those anticipated costs, rather than measured losses, even approximately, the National Audit Office (NAO) found.
HM Treasury requires larger central government bodies to disclose climate-related financial risks in their annual reports. In 2025-26, those bodies had to publish the impacts, timelines and costs of significant risks for the first time; some public corporations and companies had separately been required to make climate disclosures since 2022. Both requirements are based on the Task Force on Climate-related Financial Disclosures framework, with some differences.
The NAO published its review on 2 November 2026. It examined 31 audited bodies, including central government bodies and public corporations, selected because the watchdog judged them most likely to face significant climate risks. Of these, 25 reported under Treasury guidance and six under Companies Act guidance. The review did not cover the entire public sector.
As The Register described, bodies anticipated damage to assets and infrastructure from extreme weather and longer-term changes in temperature and rainfall. They also expected repair and maintenance costs, possible upgrades, adaptation and decarbonization costs, and higher operating costs, including energy charges.
The NAO found that disclosures described physical risks in more detail than risks from the transition to a lower-carbon economy. The latter included the costs of new energy sources and technology, complying with regulations, supply-chain disruption, and changes in the price and availability of materials, water, energy and specialist skills.
Most central government bodies reviewed were still at an early stage of understanding and reporting their main climate risks, the NAO said. Few fully explained the implications for services, plans and finances. Most disclosures also lacked enough targets or measures to let readers judge how effectively risks were being managed.
The council’s report also attributes 176 soldier deaths to drone attacks. A separate Sudanese report alleges 70 assaults involving 187 drones were launched from Ethiopia, which denies aiding the force accused of carrying them out.
Some disclosures show existing disruption. The NAO said train companies already report delays and cancellations caused by flooding, high winds and landslides. It said climate-related financial losses would rise and, in a worst-case scenario, some routes could become financially unviable or inoperable later this century.
Prison disclosures identified high exposure to flooding and overheating, risks rather than damage already sustained, which could threaten the health and safety of staff and prisoners.
| Risk | Share of prisons |
|---|---|
| Flooding | 89% |
| Overheating | 71% |
The NAO said analysis of possible climate scenarios was limited, but where bodies used it, it helped them understand future costs, service risks and investment decisions. Such analysis will inform prison-service investment planning.
NAO head Gareth Davies said Parliament needs clear information on how well infrastructure, services and finances can withstand climate change and how the risks are managed. He said public bodies were still learning how best to report their most pressing risks and expects the reporting to become more useful over time.
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