Climate-related disclosure rules still lack of disclosure, regulators say

Climate-related disclosure rules still lack of disclosure, regulators say

More companies reporting in line with TCFD framework.

Despite that, overall disclosure still lacking global climate talks in Glasgow start Oct. 31 Recasts, adds detail from the report LONDON, Oct 14 Reuters - Around half of companies assessed have begun to apply global climate-related disclosure standards for helping investors pick firms committed to sustainability, regulators said on Thursday.

A task force set up by the Financial Stability Board - which groups regulators, central banks and treasury officials from G 20 countries - agreed recommendations in 2017 on how companies should voluntarily disclose climate risks and opportunities.

But four years on, only about half of companies disclosed climate-related risks and opportunities in some form, on average covering around a third of the 11 recommended disclosures, said the Task Force on Climate-related Financial Disclosures (TCFD) in an update published on Thursday.

Significant progress is needed, the report reported after a recent review by more than 1,600 companies around the world.

There is clear consensus among investors and regulators on the importance of transparent disclosure and the need for standardised, transparent data to support capital allocation decisions, said Mary Schapiro, head of the TCFD.

Regulators are worried that companies touting their green credentials to attract investors' cash may be making exaggerated claims about their commitment to sustainability - something known as greenwashing The task force said more than 2,600 organisations expressed their support for its recommendations, an increase of more than a third since the 2020. They include 1,069 financial institutions with assets of $194 trillion.

To improve their uptake, regulators in markets such as England, the European Union, Brazil, Hong Kong, Japan, Singapore and Switzerland have begun using the recommendations as a basis for mandatory disclosures.

The recommendations are part of a patchwork of disclosure rules that have emerged, prompting regulators to intervene in a bid to impose a more globally unified approach.

The IFRS Foundation is set to create an International Sustainability Standards Board ISSB in the run up to the COP 26 climate change conference in Glasgow next month.

The ISSB will add to the task force's recommendations for supporting countries to create baseline disclosure standards by mid 2022 which supporting countries will make mandatory.

The FSB welcomes the continued progress that the IFRS Foundation is making on its initiative to develop a global sustainability reporting standard with first date in Climate, said the FSB in a statement.