In 2019, I joined Project Task Force of Climate-related Reporting of the European Lab as part of European Financial Reporting Advisory Group (EFRAG).
Transparency is key in understanding how companies prepare to deal with the impact of climate change as well as how willing they are to consider their own impact on the environment. Even if the goal is clear, it is a long journey.
In practice companies can use the Task Force for Climate-related Financial Disclosure (TCFD) guidance on how to report on climate change released in June 2017 (TCFD recommendations). The European Commission has since clarified the non-financial reporting requirements through new non-binding guidelines (Guidelines on reporting climate-related information) that leverage the structure of the TCFD recommendations. However, none of these frameworks is mandatory, which limits their effective implementation and enforcement. Moreover, companies struggle to address the TCFD recommendations in a clearly articulated, transparent and comprehensive way. The information provided by companies varies in quality and content, with different levels of maturity, transparency and qualitative/quantitative analysis.
The European Lab comprised of 23 colleagues with diverse nationality, industry and functional backgrounds, who are all experts on climate-related reporting. We analysed the climate-related reporting of approximately 150 companies to identify good reporting practices, taking into consideration the needs of users of corporate reports and that preparers are at different stages of maturity in climate-related reporting
The result of the work is the report ‘How to improve climate-related reporting – A summary of good practices from Europe and beyond’, which provides views of cutting-edge reporting to preparers, users and other stakeholders interested in climate-related disclosures.
You can read the full report here http://www.efrag.org/Lab1?AspxAutoDetectCookieSupport=1