• 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:

  1. Central government bodies took different approaches to assessing and reporting their climate-related risks, resulting in varied conclusions.
  2. Many government bodies identified similar climate-related risks, particularly flooding and overheating.
  3. Few bodies explained fully what climate-related risks could mean for their services, future plans and finances.
  4. Climate scenario analysis was limited, but where used it helped bodies understand future costs, risks to services and investment decisions.
  5. Most disclosures did not include enough targets or measures for readers to judge how effectively bodies were managing climate-related risks.
  6. Reporting on climate-risk governance and management improved in 2025-26 compared with 2024-25.

“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.”

Gareth Davies, head of the NAO

Full publication

Government’s climate risk: insights from 2025-26 disclosures

Notes for editors

  1. The report will be available on the NAO website via the following link from 00:01 Monday 2nd November: https://www.nao.org.uk/insights/governments-climate-risk-insights-from-2025-26-disclosures/
  2. 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.