In the space of three weeks this September, a sustainability reporting team at a UK mid-market bank had three reasons to update the same tracker. The FCA published its final rules locking in the UK's new sustainability reporting standards for listed issuers. The EU's EmpCo Directive came into force, banning a long list of unsubstantiated green marketing claims. And the UK government opened a consultation proposing to slim down narrative reporting in company law, including replacing prescriptive environmental and social reporting requirements with disclosure only where material.
Three announcements, three perceived directions. One tightening, one enforcing, and one streamlining.
Three signals, one month
Taking each on its own terms first. The FCA's PS26/19 requires UK-listed companies to report against the new UK Sustainability Reporting Standards, the UK's own version of the ISSB, from accounting periods starting in 2027. It softened as it went: issuers can now comply or explain rather than align in full, and the FCA gave an extra year's grace on scope 3 emissions and two years on the wider set of disclosures. Direction confirmed, teeth filed a bit.
The UK government's Modernising Corporate Reporting consultation, published the same month (open until end November), proposes to strip specific sustainability, environmental and human rights reporting mandates out of the Companies Act altogether. It keeps the existing climate disclosure rules for large companies in place for now, but leaves open whether UK SRS should apply beyond listed companies until a review of those rules reports next spring. Two arms of the government, appearing to move in different directions on the same question, in the same few weeks.
EmpCo is different again. From 27 September it bans vague or unsubstantiated green claims in consumer-facing marketing, generic labels like "eco-friendly" with nothing behind them, offset-based neutrality claims, net zero pledges without a verifiable plan, with fines reaching 4% of turnover. It applies to any business marketing to EU consumers, so UK companies selling into the EU are caught too. The UK already has its own version. Since April 2025 the CMA has been able to fine businesses directly for misleading green claims, up to 10% of global turnover, and FCA-authorised firms, banks included, have been subject to the FCA's anti-greenwashing rule since May 2024. None of this creates a new disclosure duty. They punish what a company says about itself. They ask nothing of what a company does, or whether it says anything at all. Better to stay silent then?
What three signals do to a planning cycle
No single one of these is unreasonable. Together they describe a regime that tightens, loosens and enforces in the same breath, and a board trying to plan three to five years out against that has a genuine challenge. Commit resource to today's climate reporting framework and you may be asked to adopt a different one before the first report is filed. Hold off and the FCA's direction of travel, however softened, is still the direction of travel. The rational response to that kind of whiplash is not boldness. It is to wait, watch the next consultation response, and spend the budget on monitoring the rules rather than acting on them.
EmpCo and its UK counterparts sharpen the problem rather than solving it. A regime that fines overclaiming but asks for no disclosure in return rewards silence. A company with a genuine transition plan and one still finding its feet face the same incentive: say less, risk less. That is greenhushing, and it is a predictable consequence of enforcement built on penalising speech rather than requiring substance. The businesses it catches out are unlikely to be the ones doing nothing. They are the ones who said something and perhaps got the wording wrong. I recall five years ago all the banks being asked to "take a leap of faith" and to "not let the perfect be the enemy of the good".
The transition didn't ask permission
That caution is already visible in our own data. In Perigon’s 2026 ESG Banking Barometer, the number of firms publishing a transition plan rose modestly from 17 to 19. A count of the number of internal plans would show a different picture, particularly given the PRA's SS5/25 expects a bank with a net zero target to at least hold an internal one. Our Low-Carbon Transition Index corroborates this, showing that the work is happening in the real-economy, regardless. The transition is becoming business as usual while the conversation about how to report on it continues, 10 years on from Paris.
That gap is the point. The FCA, the European Commission and the UK government all want the same thing in principle: reporting that is comparable, honest and proportionate to the risk it covers. None of that is in dispute. What is missing is the one thing that would let businesses act on it, a stable reporting framework they can stop re-drafting against. Every day precious resources spend re-mapping disclosures to the latest standard is a day not spent taking action on the underlying transition that those disclosures exist to track.
So in the next committee, as you work through which of these rules apply, when, and how they differ from what you already do, keep two decisions apart: what to disclose, and what to actually do. The first will keep changing with every consultation. The second should not.
