Climate Reporting Falls Short of Investor Expectations
A new UK Financial Reporting Council (FRC) report indicates that companies are falling short of investor expectations for quality, granular climate-related reporting.
As we heard from SASB at Data Amplified, demand for climate-related reporting is growing. However, for reporting to be useful for investors, it needs to be clear and comparable.
The FRC report provides practical guidance to bridging the gap between investor expectation and current company reporting. It outlines what investors want to understand, the questions companies should ask themselves, recommended disclosures, and includes a range of examples of climate-related reporting. Broadly, the report delves into issues relating to governance and management, business model and strategy, risk management, and metrics and targets.
The FRC also recommends that companies use the Task Force on Climate-related Financial Disclosures (TCFD) framework for climate-related reporting. This framework has strong support from investors, and many governments now expect that listed companies and large asset owners will begin to disclose in line with TCFD recommendations by 2022. If you’ve not already seen it, also read the TCFD guidance jointly published by the SASB and CDSB, you can find it here.
Read more and access the report here.