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Climate Disclosure Update

By Randi Morrison posted 12-01-2024 01:50 PM

  

The IFRS Foundation, which assumed responsibility (see "IFRS") from the TCFD for monitoring climate-related disclosure in 2023, released its first "Progress on Corporate Climate-related Disclosures" report based on a sampling of 3,814 public companies.

Among the key takeaways for fiscal year 2023:

Disclosure prevalence

  • 82% of companies disclosed information in line with at least one of the 11 TCFD recommended disclosures
  • 44% of companies disclosed information in line with at least five of the recommended disclosures
  • Approximately 2%–3% of companies reported in line with all 11 TCFD recommended disclosures.

On average, companies overall addressed 5.2 of the recommended disclosures. North American companies averaged 4.1 of the recommended disclosures.

Most & least common disclosures—Companies overall most commonly disclosed GHG emissions information in their 2023 reports (63%); however, North American companies most commonly disclosed information about board oversight (59%). On par with prior years, the resilience of companies’ strategies under different climate-related scenarios remained the least prevalent disclosure worldwide and in North America specifically.

Disclosure varies by industry—Disclosures varied in frequency and focus across the eight industries reviewed, with Energy and Insurance companies having the highest disclosure rates across all 11 recommendations.

Disclosure varies by company size—Not surprisingly, there is a positive correlation between TCFD-aligned reporting and company size. The largest companies (>$12.3B) most commonly reported GHG emissions (70%), while the smallest companies (<$3.2B) most commonly reported on board oversight (48%). This compares to 46% of the smallest companies reporting GHG emissions and 56% of the largest companies reporting on board oversight.

Also noteworthy: Between October 2023 and March 2024, more than 1,000 companies referenced the ISSB in their reports.

See the IFRS Foundation’s release and, relatedly, this release and report from the Financial Stability Board on the uptake in ISSB- and TCFD-aligned regulatory disclosure schemes.

See “TCFD review shows 'further action' needed on climate disclosures, says Faber” (Responsible Investor) and additional resources on our Climate Risk & Disclosure page. 

                    This post first appeared in the weekly Society Alert!

                 

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