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Corporates Struggling to Take “Meaningful Action” on Climate – EY

Although more companies are providing disclosures in line with the Taskforce on Climate-related Financial Disclosure (TCFD), a report by EY Assurance has warned that many firms are failing to address these risks. The average climate disclosure score of companies has increased by 14%, from 70% in 2021 to 84% this year, according to the Big Four accountancy firm’s Global Climate Risk Barometer, but firms are not taking “meaningful action”. Three in five of the 1,500 surveyed companies have disclosed decarbonisation strategies, although these strategies have so far failed to make any major impact, the report said. Improvements in the quality of disclosures was slight, up by 2% to 44% this year compared to 2021. Additionally, less than a third of firms are mentioning the impact of climate change on their business in financial statements. However, almost half of surveyed organisations said they have conducted scenario analysis to examine the likely scale and timings of particular climate risks, and 75% said they have conducted risk analysis. Dr. Matthew Bell, EY’s Climate Change and Sustainability Services Leader, said: “It’s not a surprise that companies around the world are improving their disclosure. But many firms are not disclosing enough detail on their climate risks; and they aren’t translating reporting into meaningful action to tackle the problem. If disclosure is to make an impact on decarbonisation it can’t be half-baked.” 

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