How to Improve Climate-Related Reporting

This report How to Improve Climate-Related Reporting is the result of collaboration between European preparers, users and other stakeholders within the PTF-CRR and their dialogue with stakeholders outside the PTF-CRR.

It has the ambition to be a stocktake of good climate reporting practices with a primary focus on European companies, and also to identify scenario analysis reporting practices for global companies as this is considered a relatively immature aspect of reporting. 

The report also tries to reconcile preparers’ versus users’ perspectives in a context where investors seek better information on their exposure to climate-related risks, while companies aim to enhance their climate-related reporting for their own benefit and for the benefit of their stakeholders. The focus of the report is therefore to illustrate good reporting examples and provide suggestions on how to generate and disclose information that is both useful for companies and relevant for users.

The report does not comment on the actual implementation of a company’s sustainability strategy, but aims to inspire them to take the required next steps to improve their climate-related reporting.

The key findings from the reports are as follows: 

• Climate-related financial disclosures are in an early implementation stage and there is room for improvement, even among more mature reporting companies. Nevertheless, consistent with the latest TCFD implementation status report, the PTF-CRR observed an improvement in the quality of companies’ disclosures compared to the 2017 reporting cycle.
• Some companies still consider TCFD reporting as a pure compliance exercise and miss the opportunity to perform a genuine analysis and report on both their resilience to climate-change risks and the impact of their strategy on the environment. 
• Companies are generally good at reporting the climate-related policies they have in place, but less good at reporting how they either monitor or perform against their policies and manage risks. 
• Some companies have been identified as leaders in specific aspects of climate reporting, but it is challenging to find companies that show a high level of sophistication on all aspects of climate-reporting.
• Companies should avoid: disclosing generic information; reporting without a prior materiality assessment; and reporting without a common narrative. 
• The PTF-CRR review also identified that various sections of companies’ reports are not always clearly articulated or well-connected, making it difficult for users to get a complete picture of companies’ approaches to assessing and managing climate-related risks and opportunities. 

More information on TCFD reporting and financial disclosures can be found on our Green Finance Measures Database.