The new Climate Guidance will help enhance reporting quality by addressing the lack of decision-useful material climate information for investors.
The Climate Disclosure Standards Board (CDSB) has released new guidance to assist companies to disclose material climate-related information in mainstream corporate reports.
The ‘Climate Guidance’ is the first in a series of supplementary guides planned for the users of the CDSB Framework for reporting environmental and climate change information.
The guidance aligns with other global standards, recommendations and metrics, such as the Recommendations of the Task Force on Climate-Related Disclosures (TCFD), Global Reporting Initiative (GRI), Sustainability Accounting Standards Board (SASB), CDP, and others.
It seeks to address the gap in reporting quality by providing up-to-date guidance focused on the disclosure of material non-financial information – featuring examples of good practice, checklists, links to further relevant resources, and answers to common questions CDSB hears from the market.
“The Climate Guidance offers companies a means of developing their reporting practices and ensuring that investors are receiving the material climate-related information needed for efficient and effective capital allocation to drive the transition to a just, low-carbon economy,” the guidance read, pointing to a shortfall in high quality, decision-useful material climate information to drive meaningful change.
Indeed, CDSB’s latest review of the largest European companies showed that 78 percent of them are not adequately reporting environmental and climate-related risks, despite EU guidelines.
The release of the Climate Guidance comes just a week after the Financial Stability Board (FSB) also highlighted that efforts to quantify climate-related financial risks are being hindered by a lack of consistent data on financial exposures to climate risks, and difficulties translating climate change outcomes into changes in those exposures.
“Companies are still falling short of adequately reporting environmental and climate-related information,” said CDSB managing director Mardi McBrien. “Investor demand for consistent, comparable and reliable information on ESG matters is growing rapidly, and despite this widespread support, climate-related disclosure is not where it needs to be to move money in the right direction.”
“TCFD has released a set of recommendations, this guidance CDSB is launching today can play an important role shifting support for TCFD to action.”
The next supplementary guide in CDSB’s series will be ‘Water Guidance’, to be published early next year.