Urgent progress needed on company climate disclosures, G20 task force says

A smoke billowing from a chimney is pictured, as the UN Climate Change Conference (COP26) takes place, in Glasgow, Scotland, Britain, November 6, 2021. REUTERS/Yves Herman
  • Companies on average apply only 4.2 of 11 recommendations
  • European companies the most advanced
  • Few explain resilience of climate strategy

LONDON, Oct 13 (Reuters) - More companies provided climate-related financial data to investors during 2021 but urgent progress is still needed, the G20's Taskforce on Climate Related Financial Disclosures (TCFD) said on Thursday.

Regulators view comprehensive and rigorous disclosures as key to helping economies meet net zero targets, while stamping out "greenwashing" and preventing companies from playing down the impact of climate change on their bottom line.

Set up by the G20's Financial Stability Board (FSB), the industry-led TCFD set out recommendations in 2017 on how companies could voluntarily disclose the risks and opportunities from climate change.

More countries are making climate disclosures mandatory, some based on TCFD recommendations, which in turn are due to be superceded by norms from the new International Sustainability Standards Board (ISSB) in 2023.

The TCFD said in its annual update on Thursday that reports from 1,400 companies showed they were applying an average of 4.2 of the task force's 11 recommended disclosures, with only 43% of firms appying at least five of them.

Only 4% of firms made disclosures with all ll TCFD recommendations.

"The percent of companies disclosing TCFD-aligned information continues to grow, but more urgent progress is needed," the TCFD said in an annual update.

TCFD 2022 Status Report

The disclosures include whether or not the board has oversight of the company's plan to lower its planet-harming carbon emissions, whether firm targets have been set, and the plan's integration into the company's risk management process.

ISSB disclosures will replace TCFD in countries such as Britain, but the European Union and the United States are working on their own mandatory climate disclosures for companies.

Earlier this week, the FSB called on the standard setters to ensure "interoperability" between their norms to avoid fragmenting international investment markets.

Regulators are now working on the next step: rules for independent audits of climate-related disclosures.

Reporting by Simon Jessop; Editing by Edmund Klamann

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