UK — The Register
UK.gov lacks understanding of climate impact, says watchdog
Policy1 min read
The UK's National Audit Office (NAO), a government watchdog, says public bodies expect higher costs from climate change and the move to cleaner energy. But most of them do not understand the risks well.
What happened
A new NAO report found that many UK public bodies expect to pay more to run things. Costs may come from extreme weather, higher energy bills and repairs. However, few bodies could put a clear price on these costs, even a rough one. The watchdog says their understanding of both climate risks and the cost of switching to low-carbon energy is weak.
Key facts
- Larger central government bodies made their first climate-related financial reports for the 2025-26 financial year.
- Other disclosure rules have been in place since 2022.
- Transition risks, such as the cost of switching energy sources, got far less detail than physical risks like flooding.
- The most common transition risks were the financial cost of change and supply chain disruption.
Some background
Climate change brings physical risks, such as flooding, higher temperatures, stronger winds and longer droughts. Moving to low-carbon energy, meaning energy that releases little carbon pollution, brings transition risks. These include new technology, new rules and changing material prices. His Majesty's Treasury (HMT), the UK government's finance department, set the rules for how these bodies report on climate finances.
Why it matters
Public services need to plan for climate change. NAO head Gareth Davies said Parliament needs clear information on how well infrastructure and services can handle climate change, and how these risks are being managed. The watchdog says the new reports are an important first step, but they must become more useful over time.
What to watch
- Whether later climate reports give more specific costs and risks.
- How public bodies handle the rising costs of energy and repairs.
- Concerns about data centres, which a climate charity says could add to water pressure in the UK.
Glossary
- National Audit Office (NAO)
- The UK government's watchdog that checks how public money is spent and how well public bodies manage risks.
- His Majesty's Treasury (HMT)
- The UK government department that manages public money and sets financial rules for government bodies.
- low-carbon energy
- Energy sources that release very little carbon pollution, such as wind and solar power.
- transition risks
- Money and business problems that come from moving to cleaner energy and new rules.
- physical risks
- Harm to buildings, roads and services caused by weather, such as floods, heat and drought.