A new report by the National Audit Office (NAO) based on the financial disclosures of 31 public bodies reveals how climate change could have serious consequences for public services and infrastructure.

The NAO found a mixed picture of the government’s resilience: some explain their climate risks and possible consequences clearly, while reporting by others is less mature.

The report also examines the government’s response to climate-related risks and the strength of its sustainability reporting.

The NAO says climate change is already affecting the UK, with growing risks to public services, infrastructure and the economy. Significant investment will be required to reduce future damage and costs, as well as to adapt to a climate that has already changed.

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.

For the first time, the annual reports reveal how risks such as flooding and overheating could affect a wide range of public services including transport, health and prisons.

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

Commenting on the report’s findings, Gareth Davies, head of the NAO said:

“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.”

EAC Chair “alarmed to read” only 1/3 of central government bodies identifying climate change as material issue assessed its impact

Responding to the analysis by the National Audit Office of government’s climate risk disclosures, Chair of the Environmental Audit Committee, Toby Perkins MP, said:

“I thank the NAO for these important findings, which shine a light on government’s own understanding of its exposure to climate risks.

“As the report states, most of government is still at an early stage of its understanding. But I was alarmed to read that only a third of the central government bodies that identified climate change as a material issue assessed its impact on their work. This simply isn’t good enough; the government must rapidly scale up efforts to assess and disclose climate-related risks.

“Whether we like it or not, climate change is here to stay. Without action, climate risks will undermine not only our natural and economic resources but also vital public services on which the public depend. My Committee will continue to scrutinise the government’s work in this important area as we begin our inquiry into climate adaptation.”

Click here to download the NAO Report Government's climate risk: insightsd from 2025-26 disclosures in full