IFRS: New report sets out global progress towards both mandated and voluntary corporate climate-related disclosures

12 November 2024

Over 1,000 companies have referenced the International Sustainability Standards Board (ISSB) in their reports and 30 jurisdictions are making progress towards introducing ISSB Standards in their legal or regulatory frameworks.

These are some of the key findings of a detailed progress report presented to the Financial Stability Board (FSB) by the IFRS Foundation today. The report also sets out alignment of disclosures with the Task Force on Climate-related Financial Disclosures (TCFD) recommendations. The IFRS Foundation took on responsibility for recording climate-related disclosure progress when the TCFD disbanded in 2023.

82% of companies disclosed information in line with at least one of the 11 TCFD recommendations as companies around the world turn their attention to climate-related disclosures. However, with less than 3% of these companies reporting in line with all 11 TCFD recommended disclosures, few companies provide disclosures that cover the company’s climate-related governance, strategy, risk management or metrics and targets. If the omitted information is material, it indicates investors are not currently receiving the information needed to assess and price climate-related risks and opportunities.

This is an important backdrop to the move to regulatory adoption of the ISSB Standards after their endorsement by IOSCO in July 2023. The strong jurisdictional progress towards the introduction of sustainability-related disclosure requirements by adopting or otherwise using ISSB Standards and the shift from recommended to mandated disclosures should result in an increase in the availability of robust, material sustainability-related information for use in global capital markets.

The report shares information about the status of the 30 jurisdictions that are progressing towards introducing ISSB Standards in their regulatory frameworks, as well as insights into how companies are transitioning from disclosures prepared using the TCFD recommendations to disclosures prepared using ISSB Standards.

A separate analysis by the IFRS Foundation on some key features in these 30 jurisdictional frameworks illustrates:

• Jurisdictions see the value of Scope 3 GHG emissions disclosures. All 29 jurisdictions that have finalised or published proposals on climate-related disclosures have included Scope 3 GHG emissions disclosure requirements, with some allowing or proposing brief extensions of transitional reliefs to prepare for the requirements.
• Jurisdictions see the value of including industry-specific disclosure requirements. 28 jurisdictions have included or are considering requirements for industry-specific disclosure.
  Just two of the 30 jurisdictions have signalled the intention to make industry-specific disclosure voluntary, at least initially.
• Climate-related risks and opportunities are clearly important to investors, but so are disclosures on the full spectrum of sustainability-related risks and opportunities. 90% of the jurisdictions have included or are considering requirements for disclosure covering all sustainability-related risks and opportunities over time. Some jurisdictions are initially focused on the disclosure of climate-related risks and opportunities....

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