Scrap mandatory ESG reporting: calculation note

Central fiscal result

£0.0bn - Net fiscal impact in 2028-29

Low case: -£0.1bn. High case: +£0.5bn. Positive numbers are fiscal costs or borrowing pressure. Negative numbers are Exchequer savings or receipts.

Scenario and baseline

• Model repeal of selected mandatory ESG and diversity reporting by 2028-29.
• Central fiscal effect is zero.
• Baseline includes climate-related disclosures and FCA SDR rules.
• Private compliance savings are not Exchequer savings.

Affected population

• Affected population is in-scope companies and financial firms.
• Direct gains are lower reporting and assurance costs.
• Indirect exposure includes investors, lenders and consumers.
• International reporting obligations may remain.

Gross impact

• Central public fiscal effect: £0.0bn.
• Regulator savings and transition costs broadly offset.
• Private compliance savings are not included in fiscal estimate.
• High case assumes lost information raises public-risk costs.

Fiscal build-up, central case

• Regulator administration savings: -£0.1bn
• Transition and guidance costs: +£0.1bn
• Tax receipt effects: £0.0bn
• Public-risk information costs: £0.0bn

Central net impact: £0.0bn in 2028-29.

Behaviour and pass-through

• Low case assumes duplication is removed efficiently.
• Central case assumes small public savings and small costs.
• High case assumes information loss raises later regulatory and risk costs.
• Many firms still report to investors or overseas regulators.
• Consumer price effects are likely minimal.

Phasing

• 2026-27: £0.0bn. Preparation or partial implementation.
• 2027-28: £0.0bn. Main ramp-up year.
• 2028-29: £0.0bn. Target-year central estimate.
• 2029-30: £0.0bn. Continuation at steady-state assumptions.

Main source groups

• Department for Business, Energy and Industrial Strategy, "Climate-related financial disclosures for companies and LLPs" (2022): Mandatory climate-related disclosures apply to certain large companies and LLPs for years from April 2022; defines the reporting baseline.
• Financial Conduct Authority, "Sustainability Disclosure Requirements regime" (2026): FCA SDR rules target anti-greenwashing, product labels and sustainability-related disclosures; relevant to financial-services reporting changes.
• Office for Budget Responsibility, "Economic and fiscal outlook: March 2026" (2026): The OBR forecast sets the macro, borrowing and receipts baseline used for broad fiscal context; prevents treating tax cuts or spending changes as self-financing.
• Dechezlepretre and Sato, "The Impacts of Environmental Regulations on Competitiveness" (Review of Environmental Economics and Policy, 2017): Environmental regulation can impose costs but competitiveness effects are often smaller than claimed; relevant to deregulation claims around net zero and ESG.
• Goulder and Parry, "Instrument Choice in Environmental Policy" (Review of Environmental Economics and Policy, 2008): Instrument choice matters: taxes, permits and standards differ in efficiency and distributional effects; relevant to carbon pricing, CBAM and ZEV mandate choices.
• Conservative Party, "Our Plan for Britain" (2026): Used to define the pledge wording, policy scope and implementation scenario being modelled.