320 companies and financial institutions have committed to start nature-related corporate reporting based on the Taskforce on Nature-related Financial Disclosures (TNFD) recommendations. The early adopters represent 58 sectors, $4 trillion in market capitalization, and over 100 financial institutions representing $14 trillion in Assets under Management. 43% come from Europe, 42% from Asia and the Pacific, 6% from North America, 6% from Latin America and the Caribbean, and 3% from Africa and the Middle East. (Jan 2024)

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COSTCO WHOLESALE — Committed to increase plastic footprint disclosures and a new 5-year action plan (in December 2024), according to a press release from Green Century Funds. The disclosures are expected to be unveiled in July 2024, and include the total plastic footprint of Costco’s in-house brand, Kirkland Signature. Costco will also disclose the total percentage of recycled content in its plastic packaging.

PR » ESG TODAY »

SALESFORCE — Announced generative AI enhancements to its Net Zero Cloud platform to make ESG reporting easier for companies. This includes tools that will help: 1) generate sustainability reporting responses working from previous disclosures and uploaded information; 2) automate CSRD reports; and 3) assess the most material topics to their company. (Sept 2023)

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The Global Steel Climate Council (GSCC) published a draft of “The Steel Climate Standard,” a single, technology-agnostic protocol for all steel producers to follow when measuring and reporting carbon emissions. The standard aligns with the Paris Climate Agreement goal of achieving a 1.5ºC scenario. It includes product certification criteria to inform customers if purchased steel is on the Paris Climate Agreement glide path. GSCC is accepting public comments until May 17, 2023. (May 2023)

APPLE — Released a new framework to share how its environmental efforts around renewable energy, efficiency, and materials innovation are reducing the climate impact of Apple products. To demonstrate this, the company released updated product environment reports for a number of products, and included analysis of the percentage of manufacturing powered by clean energy. Apple also announced new partnerships for innovating climate solutions and engaging communities in environmental solutions, including partnering with (April 2023):

Conservation International to support leadership in Afro-descendant communities in Latin America, with economic opportunities that address the climate and biodiversity crises;
WWF on a Nature-Based Solutions (NbS) Origination Platform, to showcase a new model to scale up investments in high-quality nature-based solutions; and
Beyond Benign to bring green chemistry and sustainable science programming to minority-serving institutions in the U.S. and expand the talent pool of Black, Hispanic, and Native American scientists trained in sustainability.

Procter & Gamble agreed to disclose data on recruitment and retention rates by gender (globally) and by race or ethnicity (in the U.S.) by the end of 2024. This comes after a campaign by shareholder advocacy group As You Sow, which filed a proxy proposal and has now withdrawn it. (Sept 2022)

BLACKROCK / FORD / GOLDMAN SACHS / JPMORGAN CHASE / MORGAN STANLEY — Will disclose the race and gender of individual directors in deals reached with New York City (NYC) pension officials. The move is intended to demonstrate the companies’ alignment of hiring practices with their stated commitments on diversity and inclusion. Taking another view, NextEra Energy is urging its shareholders to vote against a resolution filed by the NYC pension funds for similar disclosures, noting by proxy statement that "The imposition of a prescriptive matrix by individual director can promote a check-the-box approach to refreshment, thus increasing the risk of bypassing a well-qualified candidate." The company already publishes details about the skills of individual directors, and infographics showing overall diversity statistics about the board. (May 2022)

Over 680 financial institutions managing over $130 trillion in assets are requesting that nearly 10,400 companies worldwide disclose data on their environmental impact through CDP this year, including their biodiversity impacts. Nearly 100 more financial institutions put their name on the disclosure requests than in 2021, and 46% more companies are being requested for the first time. (March 2022)

Persefoni and Workiva announced a strategic partnership to provide “transparent, investor-grade carbon disclosures seamlessly to joint customers.” Customers will be able to integrate data between the companies’ existing platforms, compare data across various disclosure frameworks, and access carbon benchmarking and a carbon-offset marketplace. (Feb 2022)

NEW LOOK — The British fashion retailer committed to (Feb 2022):

Reducing GHG emissions from its products by 50% by 2030.
Using 100% recycled, organic, or Better Cotton Initiative-sourced cotton starting this year, and using 100% sustainable viscose by 2023.
Setting specific science-based targets “and a roadmap” by 2023.
Publishing full visibility of its Tier 1 and 2 suppliers through by FY23 and full visibility of its Tier 3 cotton, viscose, and polyester supply chains by FY23.
Reporting on model and influencer diversity annually starting this year.

STATE STREET GLOBAL ADVISORS — Expects all of its portfolio companies worldwide to have at least one woman on their boards starting in the 2022 proxy season. It also expects the boards of portfolio companies in major US, UK, European, Canadian, and Australian indices to have at least 30% women directors by the 2023 proxy season, and to align their climate-related disclosures with TCFD recommendations. State Street is prepared to vote against board leaders at companies that fail to meet any of the expectations. The company also plans in the coming year to “launch a targeted engagement campaign with the most significant emitters in our portfolio to encourage disclosure aligned with our expectations for climate transition plans." (Jan 2022)

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List of Private Sector News, 2021-2020 (PDF)

Standard Setters News & Frameworks

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The 21 members of the multi-stakeholder working group that will lead the development process of GRI’s Textiles and Apparel Standard have been confirmed, with representatives from the business, labor, investment, and civil society sectors. (Feb 2024)

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The International Ethics Standards Board for Accountants (IESBA) published two Exposure Drafts (EDs) that propose the first comprehensive standards on ethical considerations in sustainability reporting and assurance. The first, International Ethics Standards for Sustainability Assurance ED, proposes a clear framework of expected behaviors and ethics provisions for use by all sustainability assurance practitioners to mitigate greenwashing and increase trust in reporting. The second, Using the Work of an External Expert, proposes an ethical framework to guide accountants or sustainability assurance practitioners in evaluating whether an external expert has the necessary competence to use that expert’s work for the intended purposes. Comment here by 30 April 2024 for the first ED, and by 10 May 2024 for the second. (Feb 2024)

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Draft Sector Guidance (Taskforce on Nature-related Financial Disclosures (TNFD)) — TNFD released draft sector guidance for eight priority sectors, including: 1) Aquaculture; 2) Biotechnology and pharmaceuticals; 3) Chemicals; 4) Electric utilities and power generators; 5) Food and agriculture; 6) Forestry and paper; 7) Metals and mining; and 8) Oil and gas. The guidance supplements the final TNFD Recommendations, its disclosure metrics outlined in Annexes 1 and 2, and the guidance on assessing nature-related issues. Feedback is due for all sector guidance by 29 March 2024. (Feb 2024)

The Global Reporting Initiative (GRI) launched its new GRI Biodiversity Standard (replacing its 2016 standard) to support companies disclose their most significant impacts on biodiversity, through their operations and value chains. Updates include: full transparency through the supply chain; location-specific reporting on impacts; new disclosures on the direct drivers of biodiversity loss; and requirements for reporting impacts on society. The standard will formally be in effect for reporting 1 January 2026. Webinars on the standard are 31 January (09:00 CET) and 1 February (16:00 CET). (Jan 2024)

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The Global Reporting Initiative and the IFRS Foundation jointly published a new analysis and mapping resource, illustrating the areas of interoperability a company should consider when measuring and disclosing Scope 1, Scope 2 and Scope 3 greenhouse gas emissions in accordance with both GRI 305: Emissions and IFRS S2 Climate-related Disclosures. The analysis maps out how requirements of the two align, as well as describing specific requirements of each not explicitly required by the other. (Jan 2024)

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Detailed Summary of Responses from Corporate Standard Stakeholder Survey (Greenhouse Gas Protocol) — Provides a detailed overview of stakeholder feedback from the Corporate Standard Survey. Feedback covered includes: objectives and the accounting and reporting principles involved; organizational boundaries; operational boundaries; tracking of emissions; verification/assurance; miscellaneous comments on data and reporting; and cross-cutting feedback on the GHG Protocol related to the governance structure. Feedback by survey respondents can be submitted until 24 January 2024 using this form. (Dec 2023)

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The Global Reporting Initiative (GRI) released exposure drafts for its Climate Change and Energy disclosure standards. Public comment runs until 29 February 2024, with final standards expected to be approved in Q4 2024. Comment here. (Dec 2023)

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The Partnership for Carbon Accounting Financials (PCAF) published the Global GHG Accounting and Reporting Standard for Capital Markets (Part B). This Facilitated Emissions Standard enables financial institutions to measure and disclose emissions associated with capital market business lines (such as the primary issuance of new securities, bonds, and stock). This complements prior guidance to measure and disclose emissions related to lending and investment activities. The standard requires financial institutions to report their facilitated emissions using a 33% weighting factor, though also allows reporting without weighting if reported separately. (Dec 2023)

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CDP and the European Financial Reporting Advisory Group (EFRAG) announced a collaboration to maximize alignment of CDP’s disclosure platform with the European Sustainability Reporting Standards (ESRS). This aims to accelerate market uptake of the ESRS. CDP, with support from EFRAG, will also begin offering webinars and detailed technical guidance to support companies reporting on ESRS data points through CDP. (Nov 2023)

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Blackline documents were published detailing revisions to the SASB Standards in connection with the International Applicability of SASB Standards Project (helping preparers apply the SASB Standards regardless of their geographic location, operating footprint or applied Generally Accepted Accounting Principles). These documents, listed by sector, can be downloaded here until 10 November for information purposes. Comments are not requested, but stakeholders may contact ISSB with any fatal flaws here.

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The Global Sustainability Standards Board (GSSB) opened a call for new members to this body that oversees the development and approval of the GRI Sustainability Reporting Standards. Four vacancies are available, starting on 1 January 2024 for a three-year term. The nomination period is open until 3 November 2023. (Oct 2023)

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The Taskforce on Nature-related Financial Disclosures (TNFD) published its final recommendations on corporate disclosures of nature-related risks and impacts. The 14 recommendations aim to inform decision-making by companies and capital providers and to help shift financial flows toward the goals of the Kunming-Montreal Global Biodiversity Framework. Businesses following TNFD recommendations will provide information in a unified format to stakeholders, including regulators and investors. CDP also announced that it intends to align its global disclosure platform with the TNFD framework, which will start being reflected in its disclosure system from 2024. (Sept 2023)

The International Auditing and Assurance Standards Board (IAASB) has published a new proposed standard and explanatory memorandum. The proposed International Standard on Sustainability Assurance (ISSA) 5000 serves as a comprehensive, stand-alone standard for auditing sustainability disclosures. It will apply to sustainability information reported across any sustainability topic and prepared under multiple frameworks, including the recently released IFRS Sustainability Disclosure Standards S1 and S2. An FAQs and an introductory video are available here. And stakeholders can provide feedback until 1 December 2023. (Aug 2023)

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The IFRS Foundation published for public comment for the Proposed IFRS Sustainability Disclosure Taxonomy (IFRS S1 and IFRS S2). Stakeholders can respond by submitting a survey here until 26 September 2023. There will also be a webinar providing an overview of the taxonomy on 3 August at 10am CEST (Central European Summer Time). Register here. (July 2023)

The International Organization of Securities Commissions (IOSCO) endorsed the International Sustainability Standards Board’s (ISSB) Sustainability-related Financial Disclosures Standards, IFRS S1 and IFRS S2, calling these “a major step towards consistent, comparable and reliable sustainability information.” According to its announcement, IOSCO “has determined that the ISSB Standards are appropriate to serve as a global framework for capital markets to develop the use of sustainability-related financial information” to assess relevant sustainability risks and opportunities. IOSCO is now calling on its 130 member jurisdictions, regulating more than 95% of the world’s financial markets, to consider ways they might adopt, apply, or be informed by the ISSB standards in ways that promotes consistent and comparable climate-related and other sustainability-related disclosures for investors. (July 2023)

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The IFRS Foundation’s International Sustainability Standards Board (ISSB) will take over the monitoring of the progress on companies’ climate-related disclosures from the Task Force on Climate-related Financial Disclosures (TCFD). With IFRS S1 and IFRS S2 fully incorporating TCFD recommendations, the Financial Stability Board (FSB), which established the TCFD in 2017, asked the IFRS Foundation to take over these responsibilities, starting in 2024. (July 2023)

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The International Sustainability Standards Board (ISSB) issued inaugural global sustainability disclosure standards—IFRS S1 and IFRS S2—which can be used for annual reports for 2024 onwards. IFRS S1 provides a set of disclosure requirements designed to enable companies to communicate to investors about the sustainability-related risks and opportunities they face over the short, medium, and long term. IFRS S2 sets out specific climate-related disclosures and is designed to be used with IFRS S1. The IFRS S1 and S2 build on several other standards and integrated the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). A full (23-page) project summary is available here. (July 2023)

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The International Public Sector Accounting Standards Board (IPSASB), after a year-long consultation process, announced it will move ahead with the development of the first sustainability reporting standard for the public sector. This will equip governments and other public sector entities to provide better transparency, accountability, and comparability of their efforts to combat the climate crisis and other sustainability challenges. The IPSASB will develop a public sector specific Climate-Related Disclosures standard and has published a brief outlining this. It will also establish a Climate-related Topic Working Group to provide climate-related expertise and advice to support the project. (June 2023)

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The World Economic Forum and the International Sustainability Standards Board (ISSB) are forming a Forum ISSB Preparers Group to offer corporate perspectives on the first ISSB standards, due out in late June. The Group aims to achieve a comprehensive global baseline for sustainability reporting. The Group, which will consist of up to 20 senior preparers of corporate reporting, will use the experience of corporate sustainability reporters to provide insights into best practices with applying the Standards, the feasibility of their application, and feedback on guidance material. The Forum-ISSB collaboration builds on the Sustainability Metrics initiative and on previous work with the IFRS Foundation. (June 2023)

The International Sustainability Standards Board (ISSB) is soliciting comments on its proposed methodology for enhancing the international applicability of the Sustainability Accounting Standards Board (SASB) Standards. ISSB is considering changes to SASB Standards that refer to specific jurisdictional laws and regulations, in an effort to make them internationally applicable. The consultation and amendment effort is meant to revise metrics within the SASB Standards prior to the ISSB’s general requirements standard (IFRS S1) coming into effect in January 2024. Comments can be shared here until 9 August 2023. (May 2023)

SCS Standards published a new Annex A to the SCS-103 Certification Standard for Recycled Content. This annex sets a minimum threshold for recycled content for each product sub-category and requires multiple recycled material inputs. The Annex was developed by a multi-stakeholder group, including CEF members Amazon, Dell Technologies, HP, and Microsoft. (May 2023)

The International Sustainability Standards Board (ISSB) published a Request for Information: Consultation on Agenda Priorities, seeking feedback on its priorities for its next two-year work plan. ISSB is considering four potential projects: biodiversity, ecosystems, and ecosystem services; human capital; human rights; and integration in reporting. It is looking for feedback on strategic direction, criteria for assessing what to prioritize, and scope and structure of potential new research and standard-setting projects. Stakeholders can comment via online survey until 1 September 2023. (May 2023)

Smart Freight Centre (SFC) and the Science Based Targets initiative (SBTi) formalized a technical collaboration to further standardize GHG accounting, conventions and principles for the transport industry in line with a 1.5°C pathway. The primary charge is to update the SBTi Transport Sector Guidance by addressing gaps and adding clarity to support faster transport sector decarbonization. (May 2023)

CDP added disclosure of plastic-related impacts to its global environmental disclosure platform (starting with 2023 reporting). Specifically, 6,473 companies were invited to disclose (including from the chemicals, apparel, food and beverage, fossil fuels, and packaging sectors) after requests from 740 investors with $136 trillion in assets. Companies will disclose information on the production and use of the most problematic plastics, such as plastic polymers, durable plastics, and plastic packaging. This plastics reporting module was incorporated into CDP’s water security questionnaire, and covers plastics mapping, potential impacts to the environment, business risks, and targets. Also included are questions for certain plastics production and use activities on total weight, raw material content, and circularity potential. (April 2023)

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The Science Based Targets initiative (SBTi) has updated eight of its key resources in order to increase accessibility and transparency through explanations and simplifications. Updates have been made to: Commitment letter, Getting Started Guide, SBTi Corporate Net-Zero Standard and SBTi Corporate Net-Zero Standard Criteria, SBTi Criteria for Near-term Targets, SBTi Corporate Manual, Target Validation Protocol and Target Validation pricing. Specific changes are listed here. (April 2023)

The International Sustainability Standards Board (ISSB) announced that companies will not need to report sustainability-related risks and opportunities beyond climate-related information in the first year of reporting. This will allow companies to prioritize putting in place practices and structures in place to provide high-quality, decision-useful climate information. In the first year, companies will also not have to: provide comparative information about their sustainability-related risks and opportunities (beyond climate); disclose Scope 3 emissions; and use the Greenhouse Gas Protocol to measure emissions if they are currently using a different approach. (April 2023)

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The Taskforce on Nature-related Financial Disclosures (TNFD) released its fourth and final beta framework (v0.4) for nature-related risk management and disclosure. In this final draft, the Taskforce has outlined its approach to disclosure metrics proposing a tiered approach of leading indicators, many drawn from existing standards, that seeks to strike the right balance between being science-based and yet practical for market participants to use as part of the annual reporting cycle and on a limited assurance basis. The three tiers of proposed disclosure metrics are (April 2023):

Core Global Disclosure Metrics, relevant to organizations across sectors and reflected in global policy priorities;
Core Sector Disclosure Metrics, to enable capital providers to make comparable assessments of businesses within a sector; and
Additional Disclosure Metrics, to enable report preparers to include metrics that might be particularly relevant to their business model and nature-related issues.

The Taskforce has adopted the notion of scopes (e.g. scope 1, 2, and 3) to this context, as direct operations, upstream, downstream, and financed. The TNFD has also released draft guidance on engagement with affected stakeholders; and draft guidance for four sectors: Agriculture & Food; Mining & Metals; Energy; and Financial Institutions, and for four biomes, including tropical forests. Additional sector and biome guidance will be released in the coming months on a rolling basis. There will be a 60-day consultation process from 30 March to 1 June 2023. Then, the final recommendations, based on feedback and pilot testing, will be published in September 2023. (April 2023)

In response to stakeholder feedback, the International Accounting Standards Board (IASB) has initiated a project to explore whether and how companies’ financial statements can provide better information about climate-related risks. The outcomes will be narrow in scope, such as amendments to IASB Standards, limited new application guidance, or educational materials. It does not seek to develop an IASB Standard on climate-related risks, broaden the objective of financial statements, or develop accounting requirements for pollutant pricing mechanisms. (March 2023)

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The GSSB announced that textiles and apparel will become the newest addition to GRI’s Sector Standards. This GRI Textiles and Apparel Standard will enhance sustainability reporting by clothing, footwear, fabrics and other textile manufacturers and retailers, on a global scale. The GSSB has launched a global call for applicants to join the Textiles and Apparel Working Group, which will include representatives from business, investors, labor bodies, mediating institutions, and civil society. Interested individuals can apply until March 21, 2023. (March 2023)

The International Sustainability Standards Board (ISSB) announced it has taken its final decisions on the technical content of its initial Sustainability Disclosure Standards and these will become effective starting January 2024. ISSB members also voted to reference the European Sustainability Reporting Standards within an appendix as a source of guidance companies may consider in absence of a specific ISSB standard to identify metrics and disclosures if they meet the information needs of investors. ISSB expects the standards to be issued at the end of Q2 2023 and will focus on developing further guidance and training materials. (Feb 2023)

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GRI announced a public comment period is underway for the new GRI Mining Standard. The draft Standard identifies 25 environmental, social, and economic issues that cover the full range of mining and quarrying companies’ impacts, including climate change, water and waste, land and resource right, forced labor, anti-corruption, and government payments. It also addresses three topics new to GRI standards: tailings facilities and hazardous waste streams; small-scale mining; and operating in conflict zones. The exposure draft, which aligns with existing ESG and disclosure framework for the sector, is open for consultation until April 30. There will be two informational webinars on February 23 at 17:00 CET and March 2 at 9:00 CET. (Feb 2023)

Principles for Responsible Investment (PRI) announced the publication of its new 2023 Reporting Framework. Changes include improved clarity of terminology and questions; improved consistency and applicability, including the restructuring of some sections for better alignment with other sustainability reporting frameworks; and reduced reporting efforts, with simpler indicator structures and an overall decrease in the number of indicators. This release provides three months for signatories to familiarize themselves with the changes before reporting opens in mid-May. A webinar is also scheduled for March 15 to provide an overview of the framework. (Jan 2023)

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The Science Based Targets initiative (SBTi) has launched new guidance to support investors in identifying the overlaps and complementary nature of the SBTi Financial Institutions framework and recommendations from the Task Force on Climate-related Financial Disclosures (TCFD). The guidance provides actionable ways to harmonize science-based target setting with the preparation of robust climate-related risk and opportunity disclosures in line with institutions’ transition plans. It draws on experiences of financial institutions in South Korea, the UK, China, and Sweden to better understand the challenges and opportunities with adopting the SBTi Financial Institutions framework alongside TCFD recommendations. (Jan 2023)

The International Auditing and Assurance Standards Board (IAASB) has published a public consultation for its 2024-27 proposed strategy and work plan, with the goal of developing an overarching standard for assurance on sustainability reporting. The strategy outlines four objectives with a focus on standard setting that supports the performance of high-quality audit and assurance engagements, and strengthened coordination with leading standard setters and regulators. Comments can be made here until April 11, 2023. (Jan 2023)

The International Sustainability Standards Board (ISSB) will release the finalized versions for its first global standards for sustainability and climate-related reporting in June, with reporting to begin in 2024. (Jan 2023)

The Partnership for Carbon Accounting Financials (PCAF) launched the second version of the Global GHG Accounting and Reporting Standard for Financed Emissions. This version is an update of the Financed Emissions Standard published in 2020 and includes a new methodology for sovereign debt, and guidance on how to measure financed emissions related to greenhouse gas emission removals. (Dec 2022)

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The International Sustainability Standards Board (ISSB) announced it had agreed on how to describe sustainability and clarified that a company’s ability to deliver value for its investors is inextricably linked to the stakeholders it works with and serves, the society it operates in, and the natural resources it draws on. The ISSB also announced it will research incremental enhancements that complement the Climate-related Disclosures Standard, including relating to natural ecosystems and the human capital aspects of the climate resilience transition. In a separate announcement, ISSB has set out a series of guidance and reliefs to support those applying the requirement within its Climate-related Disclosures Standard to disclose Scope 3 emissions when material for a company. For details visit here. (Dec 2022)

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SBTi is launching the world’s first framework for shipping industry companies to set near- and long-term science-based targets in line with 1.5°C and net-zero. The Science Based Target Setting Guidance for the Maritime Transport Sector outlines how much and how quickly a maritime transport company needs to cut emissions to be in line with limiting global warming to 1.5°C. It provides detailed information on how maritime companies should set targets and account for greenhouse gas emissions, taking into account the particular barriers and opportunities of the sector. (Dec 2022)

A new draft of the revised GRI Biodiversity Standard has now been approved by the Global Sustainability Standards Board and is now available for public comment (until February 28, 2023). Proposed changes include: reflecting reporting through the supply chain; helping organizations prioritize their most significant impacts; adding disclosures to connect with the drivers of biodiversity loss; introducing requirements for biodiversity-related human rights impacts; and emphasizing location-specific data. (Dec 2022)

The Global Sustainability Standards Board (GSSB) has published the draft GSSB Work Program 2023-2025 and the accompanying Project Schedule 2023, which will guide GRI standard setting activities over the next three years. All stakeholders can comment, including responding to the four questions the GSSB raises on the priorities set out in the draft document, until February 17, 2023. (Dec 2022)

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The Taskforce on Nature-related Financial Disclosures (TNFD) released its third iteration of its beta framework for nature-related risk management and disclosures (v0.3). This update from v0.2 released in June includes several additions (Nov 2022):

Expansion of draft disclosure recommendations to incorporate dependencies and impacts on nature alongside risks and opportunities;
New disclosure recommendations related to supply chain traceability, to quality of stakeholders, and to alignment with climate and nature targets;
An adaptive approach to accommodate various reporting needs;
Additional metrics and assessment guidance;
Draft guidance on target-setting;
Two discussion papers on scenarios and on societal dimensions of nature-related risk management and disclosure.

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CDP announced that it will incorporate the International Sustainability Standard Board’s (ISSB) IFRS S2 Climate-related Disclosures Standard into its global environmental disclosure platform. The standard, currently being finalized, will be incorporated into CDP’s existing questionnaires starting in the 2024 disclosure cycle. (Nov 2022)

The International Sustainability Standards Board (ISSB) voted that companies will be required to use climate-related scenario analysis to report on climate resilience and to identify climate-related risks and opportunities to support their disclosures under the new standards being developed by the ISSB. The board also announced it will provide guidance to preparers on how to undertake scenario analysis and on which climate scenarios an entity should use. (Nov 2022)

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The Science Based Targets initiative (SBTi) released its new Commitment Compliance Policy, which will come into force January 31, 2023. Specifically, companies that fail to submit targets after 24 months will be marked “Removed” on the SBTi Target Dashboard (rather than simply removed). Extensions to the commitment time frame will also no longer be allowed. (Nov 2022)

Taskforce for Nature-related Financial Disclosures (TNFD) pilot program — The World Business Council for Sustainable Development launched its TNFD pilot program with 23 of its member companies, which have a total market value of $1.3 trillion. TNFD is emerging as the framework to disclose nature-related risks and opportunities — similar to the Taskforce for Climate-related Financial Disclosures. The pilot will help prepare the companies involved to enact future TNFD framework recommendations. It will cover energy, land use (including food, agriculture, and forestry) and the built environment — the value chains that account for about 90% on biodiversity. Corporates and financial institutions can pilot test the TNFD framework using the TNFD Piloting Guide to explore how it would apply in their specific business context. (Oct 2022)

Scope 3 emissions will be included as part of required company disclosures under new standards being developed by the International Sustainability Standards Board (ISSB). As part of these requirements, the ISSB will also develop relief provisions to help companies apply the Scope 3 requirements. (Oct 2022)

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CDP will expand its global environmental disclosure system in an effort to help solve the plastic pollution problem. The expansion will include the addition of questions and metrics on plastics into CDP’s annual disclosure questionnaires, beginning with a pilot in 2023. 32.5% of companies consulted by CDP did not have plastic-related targets. With CDP’s reach of over 13,000 companies worth 64% of global market capitalization, this could significantly scale plastics disclosure across the global economy. (Sept 2022)

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Mission Possible Partnership (MPP) and the Science Based Targets initiative (SBTi) — MPP and SBTi have formed a technical collaboration to enhance the compatibility of the SBTi Sector Projects and MPP Sector Transition Strategies, providing companies in high-emitting sectors with a simplified roadmap to scale climate actions and accelerate decarbonization in line with 1.5°C. The collaboration, which includes sectors such as aluminum, concrete/cement, chemicals, steel, aviation, shipping, and trucking, will improve guidance to support companies through the target setting process and the development of transition strategies to help the companies achieve emissions reduction targets at the pace and scale required to align with the Paris Agreement. (Sept 2022)

The Climate Bonds Standard and Certification Scheme is expanding to certify non-financial corporates and Sustainability-Linked Bonds (SLBs) issued by non-financial corporates. This new Climate Bond Standard enables corporates aligned with 1.5°C pathways, and those that will be by 2030, to be certified under the standard. Specifically that means corporates with emissions already “near zero,” and those that are not “so long as the corporate has suitably Ambitious Performance Targets and Credible Transition Plans.” The Climate Bonds Initiative has also started screening all SLBs issued in the market and will release a database of those aligned with a 1.5°C transition. Proposals for this Standard expansion are open for public consultation and feedback can be provided here until November 4, 2022. (Sept 2022)

The Science Based Target initiative (SBTi) has announced its board has approved SBTi’s incorporation as a stand-alone entity. SBTi will now create a new Technical Council to act as an independent authority to provide expert assessment, including on target setting methods. The Council is seeking applications. SBTi is also asking stakeholders to complete a survey by September 30 to help shape its work. (Sept 2022)

Consolidation of the Value Reporting Foundation (VRF) into the International Financial Reporting Standards Foundation (IFRS) is now complete. IFRS’s new International Standards Board (ISSB) will be using VRF’s Sustainability Accounting Standards Board (SASB) standards and Integrated Reporting Framework as a basis for its work to develop a comprehensive global baseline of sustainability disclosures for the capital markets. To help with continuity, “Value Reporting Foundation advisory bodies, education, membership and licensing [programs] and networks continue under the IFRS Foundation,” according to IFRS. (Aug 2022)

Global Reporting Initiative (GRI) has launched a new, first-of-its-kind Standard, GRI 13: Agriculture, Aquaculture and Fishing Sector 2022, to its suite of sector-based reporting frameworks. It is applicable to all companies in the upstream production of crops, animals, and seafood, and, according to GRI, “balances the need for comprehensive reporting on these impacts with recognition of the essential role of the sectors in feeding a global population that is estimated to be 9.7 billion by 2050.” The Standard includes new disclosures on food security, land and resource rights, living wage and income, natural ecosystem conversion, animal welfare, soil health, and pesticides use among other items. It also supports companies in connecting their impacts to all 17 Sustainable Development Goals. (July 2022)

The Taskforce on Nature-related Financial Disclosures (TNFD) released an updated beta version of its Nature-Related Risk & Opportunity Management and Disclosure Framework, based on feedback on the from over from more than 130 market stakeholders across 37 countries. The framework was designed by the TNFD Taskforce (whose members include executives from CEF members Bank of America and BlackRock), aligns with the ISSB’s forthcoming sustainability standards, and includes TCFD-aligned disclosure recommendations and practical guidance. The updated Version 0.2 features TNFD’s approach to metrics and additional guidance for market participants to start pilot testing. (July 2022)

The Basel Committee on Banking Supervision, with its regulators from 45 banking institutions across 28 jurisdictions, issued principles for improving both banks' risk management and supervisory practices for climate-related financial risks. The 18 principles cover various aspects of corporate governance, capital and pay, internal controls, risk assessment, management, and reporting, and they were designed to be adapted as necessary within a diverse range of banking systems. According to regulators, few if any banks currently provide such comprehensive climate-related assessments, and Committee members are expected to apply the new guidance "as soon as possible." (June 2022)

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The International Financial Reporting Standards Foundation (“IFRS Foundation”) communicated plans for the future role, governance, and development of the Value Reporting Foundation’s (VRF) Integrated Reporting Framework and Integrated Thinking Principles, as VRF is consolidated into the IFRS Foundation. Both resources will become materials of the IFRS Foundation. The IFRS Foundation, the International Accounting Standards Board (IASB), and the International Sustainability Standards Board (ISSB), encourage their continued use by preparers and stakeholders. (May 2022)

The Taskforce on Nature-related Financial Disclosures (TNFD) launched three initiatives to engage stakeholders in the development of a framework for companies and financial institutions to assess and disclose their nature-related risks and opportunities. (May 2022)

Beta framework pilot testing: The Taskforce enlisted four organizations—the World Business Council for Sustainable Development, FSD Africa, Global Canopy, and UNEP-FI—to test the beta framework across geographies and sectors.
Consultation groups: TNFD formed six national/regional groups—with representation from business, finance, civil society organizations, and the public sector—to expand outreach and engagement.
Engaging indigenous peoples and local communities (IPLC): In partnership with the International Union for Conservation of Nature, TNFD will engage with IPLCS and ensure their voices and perspectives are incorporated into the framework.

TNFD will release its final recommendations for the framework in September 2023.

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The International Sustainability Standards Board (ISSB) announced a new working group of jurisdictional representatives tasked with improving compatibility between the ISSB’s exposure drafts (here and here), currently open for comment, and ongoing jurisdictional initiatives on sustainability disclosures. Members of the working group are the Chinese Ministry of Finance, the European Commission, the European Financial Reporting Advisory Group, the Japanese Financial Services Authority, the Sustainability Standards Board of Japan Preparation Committee, the United Kingdom Financial Conduct Authority and the U.S. Securities and Exchange Commission. (May 2022)

A new guide from Global Reporting Initiative (GRI) supports companies based in India seeking to follow nationally and internationally recognized sustainability reporting frameworks. The guide specifically addresses the Securities & Exchange Board of India (SEBI)’s new requirement for the top 1,000 listed companies in India to produce a Business Responsibility and Sustainability Report (BRSR). Created in collaboration with the Bombay Stock Exchange, the guide links the GRI Universal Standards 2021 to SEBI’s requirements, enabling companies that produce a GRI report to use much of the same data to produce the BRSR. (May 2022)

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The Science Based Targets initiative (SBTi) launched a net zero standard development process for the finance industry by publishing initial concepts in its “Net-Zero Foundations for Financial Institutions” paper. The paper addresses several pertinent issues for financial institutions, including a standard definition for net zero, the use of offsets and carbon credits, and fossil fuel phase-out approaches. SBTi expects to launch the official standard in early 2023 and encourages financial institutions to engage in the standard development process. (April 2022)

The High-Level Expert Group on the Net-Zero Emissions Commitments of Non-State Entities, launched by UN Secretary-General António Guterres, will develop stronger and clearer standards for net-zero emissions pledges by businesses, investors, cities, and regions, and aim to increase ambition, accelerate implementation, and minimize “greenwashing.” Recommendations will be made by year-end and address four areas (April 2022):

Current standards and definitions for setting net-zero targets.
Credibility criteria to assess the objectives, measurement, and reporting of net-zero pledges.
Verification and accounting processes to assess progress.
A roadmap to translate standards and criteria into international- and national-level regulations.

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The International Sustainability Standards Board (ISSB), established in November 2021 at COP26 and a sister body of the International Accounting Standards Board, has opened a public consultation on a new set of comprehensive global guidelines on corporate sustainability disclosures. The Exposure Drafts consolidate and build upon existing disclosure frameworks including the Task Force on Climate-Related Financial Disclosures (TCFD), SASB, and Integrated Reporting. (April 2022)

Exposure Draft 1 — Sets out general sustainability-related financial disclosures by assessing all types of risks and opportunities, and how they are managed and controlled.
Exposure Draft 2 — Focuses on climate and covers Scopes 1, 2 and 3.

The consultation period will close July 2022 with plans to issue the new standards by the end of the year.

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The IFRS Foundation and Global Reporting Initiative (GRI) announced a collaboration agreement (MOU) to coordinate the work and standard-setting activities of their respective standard setting boards: the International Sustainability Standards Board (ISSB) and the Global Sustainability Standards Board (GSSB). The agreement aims to reduce the reporting burden for companies and further harmonize the sustainability reporting landscape internationally. (March 2022)

GRI

The Taskforce on Nature-related Financial Disclosures (TNFD) released the first beta version of its “TNFD Nature-Related Risk & Opportunity Management and Disclosure Framework” and invites companies to test it and provide feedback. The framework was designed by the TNFD Taskforce, whose members include executives from CEF members Bank of America and BlackRock, aligns with the ISSB’s forthcoming sustainability standards, and includes TCFD-aligned disclosure recommendations and practical guidance. (March 2022)

The SBTi, supported by WWF, released for public consultation draft guidance for a new Forest, Land, and Agriculture (FLAG) standard, created to enable food, agriculture, and forest businesses to set science-based targets incorporating land-related emissions and deforestation. The guidance can be used on a voluntary basis in the first six months after its launch this year, and certain companies will be required to set a FLAG target thereafter. (Jan 2022)

List of Standard Setters News & Frameworks, 2021-2020 (PDF)

US Regulations & News
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The Securities and Exchange Commission (SEC) paused the implementation of its new climate disclosure rule as it waits for a court review following legal challenges of the rule. The SEC said it will “continue vigorously defending” the new rules in court, according to reporting. (April 2024)

AP » ESG TODAY »

A U.S. appeals court temporarily halted the U.S. Securities and Exchange Commission’s (SEC) new climate-related disclosure rule, in response to a petition by two oil field services companies. This prohibits the SEC from enforcing the rule while the court considers arguments. (March 2024)

WALL STREET JOURNAL » ESG TODAY »

The U.S. Securities and Exchange Commission (SEC) adopted final rules to “enhance and standardize climate-related disclosures” by public companies (SEC Factsheet). Notable requirements include:

Disclosing Scope 1 and 2 emissions for companies with publicly traded shares worth $75 million or more, defined by SEC as "accelerated filers,” beginning in 2026.
Reporting expenses and losses resulting from severe weather events and other natural disasters.
Disclosing how companies identify, manage, and oversee climate-related risks that they deem material to their business.
Mandatory reporting assurance for large companies, which will be phased in.

Missing from the final rules is a requirement to disclose Scope 3 emissions. Ten Republican-led states immediately filed suit to challenge the new rules. (March 2024)

PR » ESG TODAY » GREENBIZ »

The U.S. Securities and Exchange Commission (SEC) plans to remove its requirement for U.S.-listed companies to disclose Scope 3 emissions from the upcoming corporate climate risk rules the SEC is preparing, according to reporting from Reuters. Further revisions may be made to the draft rules, and the timing of the final iteration is not clear. (Feb 2024)

REUTERS » AXIOS »

The U.S. Securities and Exchange Commission has delayed completion of its climate disclosure rules until October 2023. (June 2023)

The U.S. Federal Reserve Board proposed new guidance for the safe and sound management of exposures to climate-related financial risks for large banking organizations. These principles would apply to banks with more than $100 billion in total assets and address both the physical risks and transition risks associated with climate change. The public can comment for 60 days. (Dec 2022)

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Ceres analyzed the comment letters of 320 institutional investors in response to the U.S. Securities and Exchange Commission’s proposed rule to require companies to disclose climate risk information, both physical and transitional. The vast majority of these investors, which manage more than $50 trillion in assets, are strongly in favor of the rule, and offered strong support of key provisions including, among others: requiring disclosure in form 10-K; aligning disclosures with the Task Force on Climate-related Financial Disclosures; requiring disclosure of Scope 1 and 2 emissions; and requiring disclosure of Scope 3 emissions if there is a target. (Oct 2022)

The U.S. Securities and Exchange Commission (SEC) announced it has extended the public comment period on a proposed rule designed to enhance and standardize climate-related disclosures for investors. "The Enhancement and Standardization of Climate-Related Disclosures for Investors," Release Nos. 33-11042, 34-94478 (March 21, 2022) will now end on June 17, 2022. (May 2022)

The U.S. Securities and Exchange Commission (SEC) has issued a landmark proposal for new climate-related disclosure rules for all registrants. Building on current voluntary reporting frameworks such as the Task Force on Climate-Related Financial Disclosures (TCFD) and the Greenhouse Gas Protocol, the new rules would provide a more thorough and consistent means for investors to evaluate a company’s climate-related risk profiles and management plans for those risks. Key elements of the proposal include, but are not limited to, disclosure requirements for (March 2022):

Climate-related risks and their likely impacts to business in the short-, medium-, and long-term.
Oversight and governance, by board and management, for climate-related risks.
Scope 1, Scope 2, and, if applicable, Scope 3 greenhouse gas emissions. Scope 3 disclosures are required only if they are material, or if the company has set a GHG target or goal that includes Scope 3 emissions. Proposed rules would provide a safe harbor for liability from Scope 3 emissions disclosure and an exemption from the Scope 3 emissions disclosure requirement for smaller reporting companies.
Certain climate-related financial statement metrics and related disclosures in a note to its audited financial statements.
Information about climate-related targets and goals, and transition plan, if any.

The comment period for the proposal is open through Friday, May 20. Information on phase-in periods, accommodations, and planned compliance dates can be found in the fact sheet. (March 2022)

The US Office of the Comptroller of the Currency (OCC) opened a public consultation seeking feedback on draft principles for climate-related financial risk management for large banks with assets over $100 billion. The current draft would require banks to integrate climate financial risk assessments into all aspects of work. The OCC is accepting feedback and questions until February 14, 2022. (Dec 2021)

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The US Financial Stability Oversight Council (FSOC) declared that it sees climate change as an “emerging threat” to US financial stability and released recommendations for financial agencies to integrate climate risk management into the financial regulatory system. Notably, it recommends implementing standard climate-disclosure requirements for public companies, building forecasting tools, and creating an FSOC advisory committee of private-sector, nonprofit, and academic experts. (Oct 2021)

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The U.S. Securities and Exchange Commission (SEC) sent letters to dozens of public companies requesting additional information about how climate change could affect their business operations or financial earnings. (Sept 2021)

SEC Chair Gary Gensler ordered a review on whether fund managers should be required to disclose the data and criteria they use to give funds labels such as “green,” “low-carbon,” or “sustainable.” (Sept 2021)

Securities and Exchange Commission Chair Gary Gensler says mandatory climate-risk disclosure rules will be proposed for the commission’s consideration by year-end. (Aug 2021)

Securities and Exchange Commission Chair Gary Gensler asked the agency to consider whether publicly traded companies should be required, as part of the draft climate risk-disclosure regulation expected by year-end, to file climate-related disclosures in their annual Form 10-K reports and/or disclose Scope 3 emissions. (Aug 2021)

The Financial Stability Oversight Council—composed of U.S. regulators from the Federal Reserve System, SEC, and others—will conduct a review, led by U.S. Treasury Secretary Janet Yellen, to assess and improve regulations for banks’ and lending institutions’ climate-related financial disclosures. (July 2021)

The U.S. Securities and Exchange Commission will consider rules that would require sustainable-fund managers to disclose the data and criteria used to support their “sustainable” label, aim to curb mis-selling of products, and aim to standardize language about sustainable investing. An SEC panel advocating on behalf of investors voted last week to adopt a call for mutual fund boards to share details about their members’ gender and race, and for the SEC to encourage companies to provide useful ESG information. (July 2021)

The Commodity Futures Trading Commission (CFTC) created a “Climate Risk Unit” (CRU) division to better understand, price, and address climate-related risks in the derivatives markets. The CRU plans to support industry-led and market-driven processes critical to ensuring new products and markets fairly facilitate hedging, price discovery, market transparency, and capital allocation. (March 2021)

The U.S. Federal Reserve privately requested lenders to provide information on measures they’re taking to mitigate climate change-related risks to loan portfolios. (May 2021)

The SEC announced plans to propose a rule requiring public companies to disclose a range of workforce data. No timeline was provided. (May 2021)

John Coates, acting director of the SEC’s Division of Corporation Finance, issued a statement highlighting key issues that “policymakers should consider as the debate over ESG disclosures continues.” (March 2021)

EU/UK Regulations & News
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The European Financial Reporting Advisory Group (EFRAG) launched a public consultation on two new Exposure Drafts for European Sustainability Reporting Standards (ESRS) for listed small and medium-enterprises (SMEs) and for the voluntary reporting standard for non-listed SMEs. The consultation, which is open until 21 May 2024, is seeking feedback on the proposed architecture, the implementation of requirements, the relevance of proposed disclosures, and other questions. Comment here for Listed and here for Voluntary. (Jan 2024)

PR » ESG TODAY »

PR »

The European Financial Reporting Advisory Group (EFRAG) and the Global Reporting Initiative (GRI) have agreed on a high level of interoperability between the EU’s European Sustainability Reporting Standards (ESRS) and the GRI Standards. The ESRS will require about 50,000 companies to disclose how they affect, and are affected by, climate change, a reporting practice known as double materiality. Entities reporting under ESRS are considered to be reporting under the GRI Standards and will therefore avoid the burden of multiple reporting. (Sept 2023)

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The UK’s Department for Business and Trade (DBT) has announced plans to create UK Sustainability Disclosure Standards (SDS) for corporate disclosures on sustainability-risks and opportunities companies face. It will be based on the IFRS Sustainability Standards (S1 and S2) in order to make it globally comparable and useful for investors. The DBT aims to publish these by July 2024 and has established two committees to facilitate this (a technical committee and a policy implementation committee). (Aug 2023)

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The European Commission adopted the new European Sustainability Reporting Standards (ESRS). These standards provide more detail on the Corporate Sustainability Reporting Directive adopted in 2022 and aim to ensure that companies across the EU report comparable and reliable sustainability information (while reducing reporting costs and replication). There are 12 ESRS standards, covering a range of environmental and social issues, however, the majority of standards are subject to a materiality assessment, with companies having to report only relevant information. The standards have been modified from draft form, with three main categories of changes:

Companies with fewer than 750 have additional phase-in provisions providing more time to prepare.
Companies have more flexibility to decide what information is “subject to materiality” and thus should be reported. However, some standards are mandatory, including general disclosures (ESRS 2), and climate (ESRS E1), and even in the case that a company concludes climate is not material, the company is required to provide a “detailed explanation of the conclusions of its materiality assessment with regard to climate change.”
More disclosures would now be voluntary, such as a biodiversity transition plan and certain workforce indicators.

The final rules will now go to the Parliament and Council for a 2-month “scrutiny period” (which could be extended another two months). The rules can be rejected, but not amended, during that time. If adopted, large companies will have to publish their first sustainability statements in 2025 with 2024 financial year data. (Aug 2023)

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Transition Plan Taskforce (TPT) — Published a status update, Building Momentum for Transition Plans. This includes an update on the UK and global regulatory picture, a publication timeline, and an announcement of which sectors will be included in its “deep dive” guidance. These sectors include: asset management; asset owners; banking; electric utilities and power generators; food and agriculture; metals and mining; and oil and gas. The final TPT Disclosure Framework is scheduled for October 2023. Implementation guidance is scheduled for October 2023 (draft) and Q1 2024 (final). And sector guidance is scheduled for November 2023 (draft) and Q1 2024 (final). (Aug 2023)

The European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, has issued a Public Statement on the sustainability disclosures expected to be included in prospectuses. This addresses both equity prospectuses and non-equity prospectuses, such as sustainability-linked bonds. The statement notes that when sustainability-related disclosures are material, these should be included in the issuer’s prospectus. It also notes that when sustainability-related disclosures are included in non-financial reporting or in advertisements (when material), they too should also be included in prospectuses. (July 2023)

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The ESG Data and Ratings Working Group (DRWG) announced the launch of a consultation period for a draft voluntary Code of Conduct for ESG Ratings and Data Content Providers. DRWG is an industry group formed at the request of the Financial Conduct Authority (FCA), a UK regulator, with a Secretariat provided by the International Capital Market Association (ICMA) and the International Regulatory Strategy Group (IRSG). The proposed code of conduct is built around six key principles: good governance, securing quality, conflicts of interest, transparency, confidentiality, and engagement. The consultation period will run to 5 October 2023. Interested stakeholders can submit comments via email to drwgsecretariat@icmagroup.org. (July 2023)

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The UK Committee of Advertising Practice (CAP) and The Broadcast Committee of Advertising Practice (BCAP) published an updated version of their 2021 guidance, with a new section entitled “Claims about initiatives designed to reduce environmental impact” (see section 3.1). This draws on the principles established by recent Advertising Standards Authority (ASA) rulings (e.g. against energy companies’ ads) and principles from the Competition and Markets Authority’s earlier guidance on making environmental claims on goods and services. The new guidance addresses: limiting claims to products rather than the entire business; including balancing information about environmental impacts if describing environmental benefits; substantiating environmental claims; and providing specifics around goals and timeframes around net zero claims. (July 2023)

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Disability Hub Europe published a new version of the Disability in Sustainability Reporting guide, which takes account of recent changes in sustainability reporting, including the 2021 update to the GRI Universal Standards. The guide seeks to help companies fully incorporate disability issues in their reporting and highlight practices to include persons with disabilities throughout the value chain. (June 2023)

The European Supervisory Authorities (ESAs) published a Joint Consultation Paper proposing amendments to the Sustainable Finance Disclosure Regulation (SFDR). These include: extending the list of universal social indicators for disclosure; refining other indicators; and adding product disclosures regarding decarbonization targets. Also proposed are technical revisions including: improving disclosures on how sustainable investments “do not significantly harm” the environment and society; simplifying disclosure templates; and other adjustments, such as treatment of derivatives. The ESAs are accepting comments on the paper until 4 July 2023 here. (April 2023)

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The release of sector specific European Sustainability Reporting Standards (ESRS) will be delayed, according to European Financial Reporting Advisory Group (EFRAG). This comes as Mairead McGuinness, the EU Commissioner for Financial services, financial stability and Capital Markets Union, has called on EFRAG to prioritize its work on helping companies implement its first set of ESRS standards. (April 2023)

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The UK Financial Conduct Authority (FCA) announced it will delay its sustainability disclosure requirements for asset managers and ESG labelling rules for investment products until Q3 of 2023. This will enable the FCA to consider the roughly 240 responses it received during the consultation that closed 25 January. Among other adjustments, the final statement will refine some specific criteria for the labels and clarify how different products, asset classes, and strategies can qualify. (April 2023)

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The European Banking Authority published its “Roadmap on Sustainable Finance,” which provides a comprehensive approach over the next three years to integrate ESG risks considerations in the banking framework and support the EU’s effort to achieve a transition to a more sustainable economy. The roadmap includes eight objectives, from embedding ESG into stress testing and supervisory reporting, to increasing ESG transparency and addressing greenwashing risks. (Dec 2022)

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The EU Council announced its final approval of the Corporate Sustainability Reporting Directive, which means this legislation is now adopted. The rules will apply from the beginning of 2024 for companies over 500 employees, expanding to companies of over 250 employees or €40 million ($42 million) in 2025 and listed SMEs in 2026. This will expand total reporting corporations from the current 12,000 to more than 50,000 and introduce more detailed reporting requirements. In a separate announcement, the European Supervisory Authorities have announced a delay of key rules for financial products under the Sustainable Finance Disclosure Regulation, pushing back its response by up to 6 months from the original April 28, 2023 deadline, due to a need for more time to consult with stakeholders and experts, and due to technical demands. (Dec 2022)

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The UK Transition Plan Taskforce (TPT), launched at COP26 to develop a gold standard for private sector climate transition plans, published its Disclosure Framework and accompanying Implementation Guidance. The framework makes recommendations on developing transition plans and the guidance offers steps to do so and disclosure recommendations. The framework and guidance are open for public consultation until February 28, 2023. (Nov 2022)

The European Central Bank (ECB) released a series of deadlines for banks to manage climate and environmental risks, with banks expected to be able to fully address these risks by the end of 2024. The ECB also published the results of its thematic review of climate and environmental risks. The report, assessing 186 banks holding total assets of €25 trillion ($24.4 trillion), found three major shortcomings (Nov 2022):

Blind spots at 96% of banks in their identification of climate and environmental risks in terms of key sectors, regions, and risk drivers;
While most banks have climate strategies, many lack specifics, targets, or clarity on how current actions being taken will shelter their banks from future risks;
While banks have green commitments, they often exempt their clients, even those engaged in risky activities, from these policies.

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The Financial Conduct Authority in the UK is proposing new measures to reduce greenwashing in financial markets. These include investment product sustainability labels and restrictions on how terms like “ESG,” “green,” and “sustainable” can be used in investment product names. (Oct 2022)

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Beginning in 2024, the new Corporate Sustainability Reporting Directive (CSRD), set out by the Members of European Parliament (MEPs) and EU governments in a provisional agreement, will require large companies (defined as over 250 employees and a 40 million euro turnover), as well as non-EU companies with “substantial activity in the EU market”, to report their impact on the environment, human rights, social standards and work ethics, based on common standards that aim to put financial and sustainability reporting “on an equal footing.” The directive aims to “end greenwashing and lay the groundwork for sustainability reporting standards at global level.” Information provided will be independently audited and certified. (June 2022)

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French President Emmanuel Macron and U.N. Special Climate Envoy Michael Bloomberg announced the creation of a new Climate Data Steering Committee. The Committee, comprised of international organizations, regulators, policy makers and data service providers, will design an open-data public platform to collect and standardize net-zero transition data. Bloomberg said the new platform aims to make it "much harder for companies to 'greenwash' … by forcing them to back up words with action." The Committee will share a roadmap for the platform during the UN General Assembly in New York this September. (June 2022)

The European Financial Reporting Advisory Group (EFRAG) has released its initial draft of a new, comprehensive set of EU Sustainable Reporting Standards (ESRS) for a comment period ending August 8, 2022. The standards, once finalized, will require large companies and listed companies in the EU to furnish more stringent and easily comparable ESG disclosures under the new Corporate Sustainability Reporting Directive (CSRD) of the EU’s recently adopted Sustainability Finance Package. The CSRD will replace a patchwork of previous, mostly voluntary reporting norms that have only yielded strong environmental target reporting from about 5% of listed EU companies, according to CDP. It is intended to improve money flow towards sustainable business activities by helping investors, consumers, policymakers, and other stakeholders evaluate large companies’ non-financial performance. Companies' first report submission under CSRD, covering fiscal year 2023, will be due on January 1, 2024. (May 2022)

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Banque de France announced it would join non-profit CDP as a capital market signatory, becoming the first central bank in the world to request environmental disclosure by companies through CDP. The bank will use the disclosures to help align its investment activities with the Paris agreement as part of its 2030 carbon neutrality commitment. (May 2022)

The UK National Standards Body (BSI) announced the formation of a new Net Zero Strategic Advisory Group (SAG), which will provide guidance to BSI regarding net zero-related industry requirements and policy ambitions in an effort to ensure international standards for net zero are poised to support meaningful action. (April 2022)

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The European Securities and Markets Authority (ESMA) is calling on credit rating agencies (CRAs) to improve their ESG ratings disclosures in press releases to investors per ESMA’s March 2020 guidelines. In an analysis of over 64,000 CRA press releases from January-December 2020, ESMA found that the overall level of ESG disclosures increased after the guidelines were introduced but a "high level of divergence" existed among disclosures,even for rated entities highly exposed to ESG factors. (Feb 2022)

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The European Securities and Markets Authority (ESMA) published its Sustainable Finance Roadmap 2022-2024 identifying three priorities: 1) tackling greenwashing and promoting transparency, 2) building national competent authorities’ and ESMA’s sustainable finance capacities, and 3) monitoring, assessing, and analyzing ESG markets and risks. It will develop a legal definition of "greenwashing." (Feb 2022)

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The European Securities and Markets Authority (ESMA) published a Call for Evidence (open until March 11) to review and “develop a picture of the size, structure, resourcing, revenues and product offerings of the different ESG rating providers operating in the EU." The call is mainly addressed to ESG rating providers, entities subject to rating providers’ assessment, and rating users. Information gathered will be used alongside a public consultation by the European Commission to execute an impact assessment of a possible EU intervention. (Feb 2022)

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The European Banking Authority unveiled its final draft of technical standards for banks’ ESG disclosures, including comparable KPIs to show how institutions are embedding sustainability considerations in their business. If approved by the European Commission, banks would have to utilize certain templates, tables, and instructions, and provide quantitative information on their exposures to carbon-related assets and risk-mitigation plans. (Jan 2022)

List of EU/UK Regulations & News, 2021 (PDF)

Canada Regulations & News
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The Canadian Sustainability Standards Board released its first proposed Canadian Sustainability Disclosure Standards (CSDS). The CSDS align with the International Sustainability Standards Board’s IFRS S1 and S2, but with “Canadian-specific modifications,” including a delayed effective date, and extensions before certain aspects are required, including Scope 3 emissions and disclosures beyond climate-related risks. The CSDS is open for comment here. (March 2024)

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Asia Pacific Regulations & News

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The Sustainability Standards Board of Japan (SSBJ) issued Exposure Drafts of its Sustainability Disclosure Standards to be applied in Japan. These include three drafts, including Application of the Sustainability Disclosure Standards, General Disclosures, and Climate-related Disclosures. The exposure drafts are available here (in Japanese) and a summary of differences between the IFRS sustainability standards and the SSBJ drafts is available here in English. The deadline to comment is 31 July 2024. (April 2024)

PR » ESG TODAY »

Singapore will require all listed firms to make climate-related disclosures from financial year 2025. The requirement will also apply to non-listed companies with annual revenues of at least S$1 billion ($740 million) and assets of at least S$500 million from FY2027. Disclosures will have to align with the International Sustainability Standards Board standards. Requirements to obtain external limited assurance and report on Scope 3 emissions will be phased in over time. (March 2024)

CNA » ESG TODAY »

Three Chinese stock exchanges — the Shanghai Stock Exchange (SSE), the Shenzhen Stock Exchange (SZSE), and the Beijing Stock Exchange (BSE) — introduced new reporting guidelines for listed companies to disclose sustainability-related information. Reporting requirements will focus on four “core content” topics, including governance, strategy, risk and opportunity management, and indicators and goals, according to ESG Today. Reporting will be compulsory for larger companies and for those with securities listed on both domestic and foreign markets starting in April 2026. (Feb 2024)

ESG TODAY » SOUTH CHINA MORNING POST »

The Australian Competition & Consumer Commission (ACCC) published draft guidance explaining the obligations under the Australian Consumer Law which businesses must comply with when making environmental and sustainability claims. The rules focus on eight key principles for making trustworthy claims, including: making truthful and accurate claims; supporting with evidence; not hiding important information; explaining any claim conditions; using clear language; ensuring visual elements do not give the wrong impression; and being direct about future environmental objectives. Interested parties can provide feedback here until 15 September 2023. (July 2023)

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Singapore’s Accounting and Corporate Regulatory Authority and the Singapore Exchange Regulation have launched a public consultation on requiring companies to report ISSB-aligned climate-related disclosures. All listed issuers (including those incorporated overseas) would be required to start reporting disclosures in FY2025, and non-listed companies with annual revenue of at least $1 billion in FY2027. The recommendations also propose requiring external assurance on Scope 1 and 2 emissions. The public consultation will run from 6 July to 30 September 2023. Public comments can be submitted here. (July 2023)

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The Stock Exchange of Hong Kong published a consultation paper with proposals to enhance climate-related disclosures under the ESG framework. The Exchange proposes to mandate all issuers to make climate-related disclosures in their ESG reports, and introduce new climate-related disclosures aligned with the ISSB’s Climate Standard. Disclosures would include: climate-related risks and opportunities; transition plans; climate resilience; financial effects of climate-related risks and opportunities; and risk management. Acknowledging issuer readiness, the Exchange proposes starting with interim provisions for certain disclosures for the first two reporting years following the effective date of 1 January 2024. Responses to the consultation paper can be made here until 14 July 2023. (April 2023)

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In a new consultation paper, the Securities and Exchange Board of India (SEBI) proposed new ESG rules. Currently, the top 1,000 listed companies have to make ESG disclosures. Proposed changes include: increasing quantifiable key indicators for these 1,000 companies (phased-in over three years); adding ESG disclosures for supply chains for the top 250 companies; setting 15 ESG parameters for ESG rating providers; and enhancing stewardship reporting and classification for ESG funds. The recommendations are based on consultations with an ESG Advisory Committee (made up of a variety of stakeholders) in May 2022. SEBI is seeking comments on the proposals until March 6, 2023. (Feb 2023)

Japanese regulators plan to establish a framework that verifies the legitimacy of financial products claiming to be environmentally friendly, says Financial Services Agency commissioner Junichi Nakajima. (Aug 2021)

Russia's central bank advised domestic companies to evaluate their ESG-related risks and disclose their ESG agenda and compliance once a year. (July 2021)

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World Economic Forum (WEF)— Started a new initiative in three Central American countries (Guatemala, Honduras, and El Salvador) to help the private sector “apply WEF’s Stakeholder Capitalism Metrics” and implement “better environmental, social and governance (ESG) reporting to improve local socioeconomic conditions and environmental resilience.” (Aug 2022)

Brazil's central bank announced new rules saying that banks must include climate change-related risks in their stress tests and disclose climate-related information—in accordance with TCFD recommendations—in their financial reporting, starting in July 2022.It also announced that rural loans are forbidden for projects on indigenous lands or in parts of the Amazon biome. (Sept 2021)

Brazil's central bank plans to require banks account for climate change-related risks in their stress tests. It also plans to demand more banking disclosures on ESG risks, such as harassment, prejudice, and deforestation. (Aug 2021)

Corporate Reporting and Disclosure Trends

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2,962 companies, with $25 trillion in market capitalization value, disclosed their plastic-related activities, impacts, risks, and opportunities through CDP for the first time in 2023. 60% disclosed on plastics publicly. 42% reported mapping where plastics are produced and used within their value chains. 30% have assessed the impact of plastics on the environment and health, and 21% reported plastic-related risks within their value chains. 36% have plastic-related targets in place while another 25% plan to within the next two years. 37 companies, with $270 billion in market capitalization value, also signed CDP’s corporate open letter calling for mandatory plastics disclosures. (April 2024)

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Stewardship at the Source: Driving water action across supply chains (CDP) — Analyzes CDP disclosures around water security, based on 3,163 companies with annual revenue of over $250 million that responded to CDP. Key findings (March 2024):

50% of companies (1,542) said they are engaging their supply chain on water risks, including inserting water requirements into contracts, collecting data, and collaborating on innovation.
1 in 5 companies report supply chain water risks estimated to total $77 billion (across 623 responding companies).
$7 billion was deemed to be at immediate risk due to urgent water scarcity, flood, regulatory and reputational issues (across 79 companies).
Those companies that assess risks in their supply chain are seven times more likely to report water-related supply chain risks and take measures to mitigate them.
4% of companies are setting global water-related targets for their supply chain.
14% of companies offer their senior leaders incentives to improve water management across the supply chain, and 4% provide direct financial incentives to their chief procurement officers.

PR » EDIE »

2024 Executive Benchmark on Integrated Reporting (Workiva) — Surveys 894 executives and 103 institutional investors in North America about integrated reporting of financial and non-financial data. Highlights include (March 2024):

91% of executives agree integrated reporting provides a more holistic view of performance.
88% of investors are more likely to invest in companies that integrate financial and ESG data.
82% of investors say they have not changed how they make investment decisions despite recent criticism of ESG.
More than 89% of investors agree ESG reporting regulations will help them do their job more effectively.
83% of executives believe generative AI will help companies comply with regulation, while more than half of investors use generative AI to evaluate financial and ESG performance.
74% of executives believe complying with regulatory reporting requirements will become significantly more challenging in the next year.
Executives whose companies integrate financial and ESG reporting feel nearly twice as confident in complying with the SEC’s climate disclosure rules as those who do not (68% versus 37%).

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Companies may be underestimating the risks and impacts associated with their activities, according to new analysis on Principle Adverse Impacts by CDP. Of the 23,200 companies that reported to CDP, only 140 reported on all the adverse impact metrics. In the case of water, 1,300 companies reported this was not relevant to them and 1,140 reported not monitoring this. However, 35% of these companies have main activities flagged as having a direct critical impact on water pollution. (March 2024)

State of Play: Sustainability Disclosure and Assurance 2019-2022, Trends & Analysis (International Federation of Accountants (IFAC) and AICPA & CIMA) — This updated annual benchmark of sustainability disclosures of 1,400 companies now incorporates 2022 data. Highlights include (Feb 2024):

98% of companies reported some information on sustainability in 2022, up from 91% in 2019.
Only 30% of companies used a standalone sustainability report in 2022, down from 57% in 2019, reflecting the growing use of integrated reports.
69% obtained assurance on at least some of their sustainability disclosures, up 5% from 2021 and 18% from 2019.
60% of companies that obtained assurance over their greenhouse gas emissions did so over all three Scopes (and 67% in the EU).
Accountancy firms handled 58% of assurance engagements related to sustainability in 2022, up from 57% in 2021.

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Flying Blind: In a Holding Pattern (Carbon Tracker) — Climate-related disclosures continue to lack the detail investors need to assess and engage, according to this third annual report, examining 140 companies that are a focus for the Climate Action 100+ investor initiative. Significant findings include (Feb 2024):

60% of companies failed to provide meaningful information about whether, and how, climate risk and the energy transition impact their financial statements.
A majority of companies did not explain how climate matters would impact the carbon-exposed items in their balance sheets.
81% of companies continue to omit the relevant quantitative assumptions and estimates used in financial reporting.
And no company provided a fully consistent climate narrative across its financial statements and other reporting (with auditors rarely calling this out).
Auditors also struggled with transparency, with 80% providing little or no evidence of consideration of climate matters in their audits.

PR » EDIE »

Addressing the Strategy Execution Gap in Sustainability Reporting (KPMG) — Investigates large companies’ ESG data and reporting capabilities, surveying 550 board members, executives and managers at public and private corporations with annual revenues above $500 million (and 66% above $1 billion in revenues). Key findings (Feb 2024):

90% of companies surveyed will increase ESG investment in the next three years, with top areas of investment including: dedicated ESG personnel (43%); ESG-specific software (40%); and employee training (38%).
83% believe they are ahead of peers regarding ESG reporting, but 47% still use spreadsheets to manage ESG data.
76% are planning to restructure teams to better align ESG goals with business strategy.
71% of core ESG reporting activities are currently or planned to be outsourced in the next three years.
58% plan to improve ESG data collection with AI.
83% anticipate an increase in ESG integration across company roles.

ESG TODAY »

317 companies disclosed to CDP after its 2023 Non-Disclosure Campaign, according to CDP’s results report. 70% disclosed on climate change, 18% on forests, and 21% on water security. A record 288 financial institutions (FIs), with nearly $29 trillion in assets, participated, engaging with 1,590 non-disclosing companies. These companies were twice as likely to disclose after being targeted by FIs. (Feb 2024)

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38% of the 23,000+ entities disclosing to CDP in 2023 disclosed on nature-related issues beyond climate. 56% disclosed how much energy they used, and 31% disclosed having no energy consumption from renewable sources. Also, of 575 financial institutions that disclosed, half reported an estimated $9 trillion in their financial portfolios were linked to fossil fuels. (Dec 2023)

PR » EDIE »

Landscape Analysis: Measurement, Reporting and Verification (MRV) of Science-Based Targets (SBTi and EY) — Analyzes the current landscape of MRV of climate targets using a combination of surveys, interviews, literature review and data analysis. Three findings (Dec 2023):

There is currently a lack of clear guidance on how to address significant changes over the course of a target period (such as a merger or divestment), which can affect accuracy and comparability for a company’s progress.
Determining progress against targets is difficult both because of completeness and delays between action and impacts. Including additional metrics (e.g. R&D spend or capital expenditure) can function as early progress indicators.
Getting third-party assurance, while often not required, is increasingly common. Now, more frameworks and regulations are recommending or requiring third-party assurance.

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The coverage and quality of climate disclosures improved, according to the fifth EY Climate Risk Barometer, which assessed climate disclosures of 1,500 companies across 51 countries. Coverage grew from 84% to 90% from 2022 to 2023, while quality scores rose from 44% in 2022 to 50%. However, 47% of companies failed to provide a coherent transition plan, and just 26% are including quantitative impacts of climate-related risks in their financial statements. (Dec 2023)

PR » ESG TODAY »

3,162 companies disclosed plastic-related data for the first time through CDP, including information on the production, use, and disposal of plastic polymers, durable plastics, and plastic packaging (findings from which will be released in spring 2024). This was also accompanied by an open letter to governments endorsed by 48 financial institutions (with over $3.5 trillion in assets under management) calling for the inclusion of mandatory corporate disclosure in the Global Plastics Treaty. (Nov 2023)

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Reporting Matters 2023: Delivering Impact in a Time of Complexity (World Business Council for Sustainable Development (WBCSD)) — Finds significant strides have been made by WBCSD member companies in enhancing the quality, quantity, and accessibility of their sustainability reports. Notably, reports are becoming more comprehensive, user-friendly, and data-driven, showcasing a commitment to transparency and accountability. Key findings include (October 2023):

55% of reviewed reports disclose to some extent their approach to double materiality, while 42% engage their board or senior management in validating the outcomes of their materiality assessments.
There has been an increase of 26% of companies referencing the Taskforce for Climate-related Financial Disclosures (TCFD) and a doubling of companies referencing the Sustainability Accounting Standards Board (SASB), going from 28% to 56%, since 2020.
22% of member companies reference the Taskforce for Nature-related Financial Disclosures (TNFD).
94% of reviewed reports include external assurance.
68% of reviewed reports include disclosures on sustainability performance being linked to the remuneration of the highest governing body.

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Over 23,000 companies disclosed environmental data through CDP in 2023, including listed companies worth $67 trillion. This is a 24% increase in the number of companies disclosing over 2022. However, only 1% of companies reported on all three disclosure areas (climate change, water security, and deforestation). (October 2023)

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More companies are disclosing details on their net zero transition plans (59% of focus companies, up from 52% in 2022), however, most fail to quantify how these will contribute to their emissions reduction targets, according to the fourth round of the Climate Action 100+ Net Zero Company Benchmark assessments. 82% of focus companies have set long-term greenhouse gas reduction targets, and 87% have set medium-term targets, but only 37% and 33% of these respective targets cover material Scope 3 emissions. And while 30% of long-term targets align with a 1.5°C trajectory, only 13% of medium-term targets do. (October 2023)

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Task Force on Climate-related Financial Disclosures: 2023 Status Report (Task Force on Climate-Related Financial Disclosures (TCFD)) — The percentage of public companies disclosing TCFD-aligned information continues to grow, with 58% disclosing at least 5 of the 11 recommended disclosures in 2022 (up from 18% in 2020), according to this sixth and final status report by TCFD. Those disclosing all 11, however, continues to be just 4% and disclosure of climate-related financial information in financial filings (rather than sustainability and annual reports) remains limited. The percentage of companies reporting on climate-related risks or opportunities, board oversight, and climate-related targets increased significantly (by 26%, 25%, and 24%, respectively) between 2020 and 2022. And nearly 70% of the top 50 asset managers and 36% of the top 50 asset owners disclosed in line with at least five of the recommended disclosures.

PR » GREENBIZ »

What might disclosure rules reveal about corporate carbon damages? (Energy Policy Institute at the University of Chicago (EPIC)) — Globally, corporate carbon damages equal roughly 44% of firms’ operating profits and 3.1% of their revenues (using a social cost of carbon (SCC) of $190/ton as applied to Scope 1 emissions). Average damages from U.S. firms equal 18.5% of their profits and 2% of their revenues. However, there is substantial variation both across and within industries, and across countries. Four industries — utilities, materials, energy, and transportation — account for 89% of the total global corporate carbon damages. But even within industries the variation can be large (such as within diesel-powered rail transportation, which ranges from 31% of profits at the high end to 14.7% at the low end). The research finds that mandatory disclosure and peer benchmarking has the potential to reduce carbon emissions, as heavily polluting firms would be pressured to reduce emissions. The study found that if firms above median carbon damages reduced emissions to the median, this would reduce direct emissions by 70%. (Aug 2023)

Increased transparency is needed for corporate science-based targets to be effective (Nature Climate Change) — This analysis argues that increased transparency of underlying calculations of science-based emission reduction targets (SBTs) is necessary to assess “justice implications, evaluate the sufficiency of aggregate emission reductions and hold companies accountable for actions on their targets.” The article recommends increasing specificity of SBTs along three dimensions: 1) clarifying planned emissions trajectories from base years to target years; 2) setting sub-targets for short-lived and long-lived greenhouse gas emissions; and 3) specifying SBTs for Scope 1, 2, and 3 emissions individually. The article further recommends that the Science Based Targets initiative (SBTi) creates a platform for companies to disclose the method and company data underlying each approved SBT in a systematic and standardized way, and incentivize companies to disclose via this platform and sanction those who fail to do so. (Aug 2023)

Nature in Green Finance: Bridging the gap in environmental reporting (CDP) — Analyzes the current state of environmental reporting by financial institutions (FIs) with a focus on climate change, forests, and water security. The report, which is based on disclosure by 556 banks, insurers, and asset owners representing over $8 trillion in market capitalization, finds that “nature is consistently overlooked in financial decision-making by most financial institutions, despite stepping up climate considerations.” While 95% of FIs’ business strategies are now influenced by climate change, less than a third are influenced by forest issues or water security. Moreover, just 10% of FIs currently have the metrics to measure their portfolio impact for forests and water. And less than 30% of FIs are capitalizing on an estimated $5.35 trillion in opportunities for climate forest, and water combined (compared to reported risks of $1.2 trillion). (Aug 2023)

The majority of companies reporting through CDP are already partially prepared for the new mandatory European corporate reporting standards, according to CDP analysis. Over 18,000 companies (out of 18,700+ reporting to CDP) report on board-level oversight and 55% of companies (59% of European companies) have a process in place to assess climate risks and opportunities, a crucial step toward transparently disclosing climate and environmental information to stakeholders. 95% also report on actions related to climate change mitigation. (Aug 2023)

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Global Forests Report 2023 (CDP) — Reports that over 60% of companies disclosed some level of risk related to deforestation, but less than 10% have a strong public commitment to end deforestation by 2025. The report also finds that (July 2023):

The number of companies reporting their management of deforestation risk has risen 300% since 2017.
Around 90% of disclosing companies are not prepared for the transition to a deforestation-free future, despite existing & incoming regulation from the UK and EU.
On average companies face losses of $330m due to risk exposure, yet the cost of dealing with this risk is only $17.4 million.
Of the four sectors with the highest impacts on forests, the retail sector performs most poorly in putting deforestation commitments into practice.
North American firms are the most exposed to forest-related risks due to poor performance on addressing deforestation.

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As part of CDP’s annual Non-Disclosure Campaign (NDC), 288 financial institutions with nearly $29 trillion in assets engaged with 1,607 of the world’s highest-impact companies to demand they disclose environmental data through CDP. Specifically, 72% of companies were asked to disclose on climate, 28% on water and 26% on forests. Last year’s campaign drove responses from 388 high-impact companies and found that companies were 2.3 times more likely to disclose when engaged by financial institutions. Since launching in 2017, the number of participating financial institutions in the campaign has more than quadrupled. (June 2023)

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The Annual Reporting Barometer 2023: Facing up to the CSRD (Workiva) — 94% of European companies are working to become compliant with the EU’s Corporate Sustainability Reporting Directive (CSRD) by 2024, according to a new survey of more than 500 finance leaders by Workiva. 59% of respondents aren’t even required to comply with CSRD and yet are still planning on doing so voluntarily. 77% surveyed reveal that ESG has a moderate influence over their annual reporting strategies. However, while CSRD requires integration of both financial and sustainability information into companies’ annual reports, only 10% surveyed are currently working to improve collaboration between finance and sustainability, and only 6% are focused on integrating finance, sustainability, and risk. (May 2023)

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The State of ESG & Sustainability Reporting (BARC) — Due to the variety of standards, many companies are going above and beyond the minimum regulatory requirements for ESG, according to this new survey. Of 265 companies surveyed, 39% used the European Sustainability Reporting Standards; 28% GRI Standards, 26% IFRS standards, and 12% UN SDGs. Other interesting findings:

56% in Europe, 72% in North America, and 43% in the rest of the world say the most important driver of ESG reporting is “improves our reputation with our customers;”
The biggest challenges for ESG reporting: 42% report lack of data quality; 36% too many different data sources; 32% lack of resources;

The report then explores seven recommendations for: addressing the lack of standardization; implementation; motivation for reporting; organization of ESG reporting; data challenges; ways to improve reporting; and technical implementation. (April 2023)

Show & Tell: An Analysis of Corporate Climate Messaging and its Financial Impacts Pilot (Lazard) — Finds that large-cap U.S. firms increased the frequency of all forms of climate communication from 2011-2020, particularly in emission-intensive sectors. Firms increasingly disclose Scope 1 emissions (174% increase) and have pledged to decarbonize operations (105% increase in CDP commitments). However, 72% of firms are behind on their decarbonization commitments and will need to reduce emissions at a more aggressive yearly rate in order to meet their pledged targets. The report found a significant negative relationship between Scope 1 emissions and price-to-earnings (P/E) ratios but also found that increased transparency from disclosure offsets 48% of the P/E valuation discount tied to emissions on average. (April 2023)

More than 10,000 companies outside of the European Union will likely be required to report under the EU’s new Corporate Sustainability Reporting Directive (CSRD), according to new estimates Refinitiv provided to The Wall Street Journal. This will require companies, including more than 3,200 U.S. companies, to make and independently verify numerous sustainability disclosures (82 in the current CSRD draft). (April 2023)

95% of FTSE 100 companies have not published sufficiently detailed decarbonization plans to meet their climate goals, finds a new EY report. This, despite commitments from 80% of FTSE firms to achieve net-zero emissions by 2050, and despite a UK government promise to require large, listed companies to lay out decarbonization plans in 2023. The EY report evaluated net-zero transition plans published by FTSE 100 businesses against the UK government’s Transition Plan Taskforce (TPT) Draft Disclosure Framework. Even the 5% of firms with credible plans have more work to do before their published plans can be considered fully TPT-aligned. (April 2023)

Scoping Out: Tracking Nature Across the Supply Chain (CDP) — Finds that only 41% of the 18,600+ companies that disclosed climate data to CDP reported on any of their supply chain emissions, even as these emissions amounted to 11.4 times their direct emissions. 7,700 companies disclosed on biodiversity data for the first time in 2022, however, nearly 70% of these did not assess the impact of their value chain on biodiversity. Almost 4,000 companies disclosed water security data in 2022, but just 23% of these engaged their suppliers on water-related issues. And of the 1,000+ companies that disclosed on forests, 69% engaged their direct suppliers. (March 2023)

CDP — 746 financial institutions with over $136 trillion in assets requested environmental disclosures from 15,000 companies as part of CDP’s annual environmental impact questionnaire. In addition to data on climate change, deforestation, water security, and biodiversity, the disclosure letters (to the boards of these companies) also requested disclosure on plastics for the first time. The total number of participating investors grew this year by nearly 10%. (March 2023)

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The State of Play: Sustainability Disclosure & Assurance (International Federation of Accountants (IFAC) and AICPA) — 95% of large companies report on ESG and 64% of companies now obtain assurance or verification over some of the information they provided in 2021 (increasing from 91% and 51%, respectively, in 2019), according to this third annual benchmarking study reviewing 1,350 companies. The study also found that 57% of assurance engagements were conducted by audit firms in 2021, down from 63% in 2019. For the first time, this year’s report also examined the extent to which companies provide forward-looking climate information, e.g. emissions targets and plans for achieving them. 67% of companies disclosed targets (with 87% of those providing information on their plans), compared with 97% at which companies reported historic GHG emissions. (March 2023)

49% of European companies report having a 1.5°C climate transition plan in place, but less than 5% disclose against most key indicators showing a credible plan exists, according to a new report by CDP and Oliver Wyman. While 90% have initiatives to cut emissions, only 26% assess how far spending or revenue aligns with targets, fewer than 40% are building climate concerns into supplier contacts, and 54% of companies link executive-level pay to climate. The report also found that up to 40% of all outstanding corporate loans to companies analyzed (75% of the European stock market) currently finance companies without clear targets or evidence of developing credible transition plans. (Feb 2023)

Are Companies Developing Credible Climate Transition Plans? (CDP) — While 22% of 18,600 companies disclosed they had developed 1.5°C-aligned climate transition plans, only 0.4% (81) disclosed against all 21 key indicators that denote a credible climate transition plan, according to a new report by CDP. This is less than the 135 that met this criteria the previous year (2021), due to CDP “raising the bar” on what constitutes a credible climate transition plan. In 2022, 13% of companies disclosed on between 14 and 20 key indicators, and over 60% disclosed on less than seven indicators. Companies in power generation and infrastructure industries were most likely to disclose on all key indicators, though numbers there were small as well (2.2% and 1.7% respectively). 6,520 organizations reported that they will develop a transition plan within two years. (Feb 2023)

2022 CDP Non-Disclosure Campaign: Results Report (CDP) — This campaign, started in 2017, mobilizes financial institutions to ask companies that have failed to respond to CDP’s questionnaires on climate change, forests, and water security to respond. This year 260 financial institutions from 30 countries participated, calling on 1,466 companies to disclose. 26% of companies responded—with companies 2.3 times more likely to respond across all three topics when directly engaged (and companies 3.2 times more likely to disclose when targeted specifically on forests). 90% of companies asked to disclose for the first time in 2021 responded again this year. Companies in high-emitting sectors such as transportation and power generation were 4.6 and 4.4 times more likely to disclose, respectively, after engagement from their shareholders. (Jan 2023)

In 2021, 37% of companies disclosing to CDP in EU27 and EFTA reported having a climate transition plan in place, but only 2% reported on all elements that make up a credible climate transition plan, according to new CDP data. The data also revealed that just 34% companies assess the impact of their value chains on biodiversity and only 17% assess both their upstream and downstream impacts. (Jan 2023)

Sustainability action report (Deloitte) — This 2022 survey of 300 accounting, finance, legal, and sustainability executives reveals progress on ESG disclosure and preparedness within companies, including (Dec 2022):

95% of company executives report preparing for more disclosure requirements, including 58% who state they are already making extensive preparations;
57% of executives report having implemented a cross-functional ESG working group tasked with driving strategic attention to ESG and another 42% are taking steps to do the same;
61% of executives report being prepared to disclose Scope 1 emissions and 76% are prepared to disclose Scope 2 emissions, up from 47% in 2021. Only 37% report preparedness to disclose Scope 3 emissions;
Data quality remains an issue, with 35% of executives listing this as their top data challenge, up from 25% in 2021. 25% cited access to data as their greatest challenge.

More companies are disclosing biodiversity data, according to new analysis by CDP. Of over 8,850 companies that received biodiversity-related questions, 87% responded, in this first-ever collection of biodiversity data by CDP. 31% of companies have made a commitment or endorsed biodiversity-related initiatives, with another 25% planning to do so within the next two years. However, 55% of companies failed to take action to progress their commitments in the past year. And 70% did not assess the impact of their value chain on biodiversity. (Dec 2022)

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The 2022 Corporate Climate Reporting Performance Report (EcoAct) — 48% of FTSE 100 businesses achieved Scope 1 and 2 emissions reductions in line with the 1.5°C target in 2022, compared to 72% in 2021, according to a new report by EcoAct. The report also found that 97% of FTSE 100 companies do not have long-term targets for Scope 1 and 2 emissions, and 96% do not for Scope 3. Net-zero commitments have also started to slow. In 2021, 66% of major firms (across six indices) committed to net-zero, up from 45% in 2020 and 20% in 2019. In 2022, the total grew to just 70%. (Oct 2022)

Net Zero and Beyond, South Pole’s 2022 Net Zero Report (South Pole) — Found that more companies are supporting their net zero commitments with science-based targets, but 1 in 4 of these do not publicize their efforts. This report, based on over 1,200 large companies with net zero targets across 12 countries and 15 sectors, raising concern over the emerging practice of “green-hushing,” where companies are reluctant to communicate their efforts out of fear of media scrutiny, NGO critique, and the threat of lawsuits. As South Pole’s CEO, Renat Heuberger, notes, “The speed at which we are overshooting our planetary boundaries is mindblowing. More than ever we need the companies making progress on sustainability to inspire their peers to make a start. This is impossible if progress is happening in silence.” (Oct 2022)

The World Business Council for Sustainable Development (WBCSD) published its tenth annual Reporting Matters report reviewing trends and achievements in its members’ reporting over the past decade. Overall scores have increased 30% since 2013, with a 700% increase in the number of companies scoring 70% or more since 2013. (Oct 2022)

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Sustainability reporting has grown steadily, with 79% of leading companies providing sustainability reports, according to a new reporting survey of 5,800 companies in 58 countries by KPMG. Key findings include (Oct 2022):

96% of the world’s top 250 companies (G250) provide some form of ESG reporting;
79% of the top 100 companies (N100) from each country provide reporting—up from 66% ten years ago;
71% of the N100 and 80% of the G250 have set carbon reduction targets, with 64% of G250 formally acknowledging that climate change is a risk to their business;
Fewer than half of the companies provided reporting on the social or the governance components of ESG;
Only a third of N100 companies have a dedicated member of their leadership team responsible for sustainability;
Less than 25% of N100 companies link sustainability to business leaders’ compensation.

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More than 18,700 companies worth $60.8 trillion disclosed data on climate change, deforestation, and water security in 2022 through CDP — an increase of 38% since 2021. However, more than 29,500 companies, worth at least $24.5 trillion, did not respond to disclosure requests in 2022. The manufacturing sector had the most disclosures at 7,490+, with services second at 4,400+ disclosures. (Oct 2022)

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2022 Global Finance Trends Survey Report (Protiviti) — This new report surveyed business leaders on a variety of issues, including improving ESG reporting, addressing inflation, transforming talent management, and redesigning supply chains for resilience. A few key ESG findings (Oct 2022):

96% of those surveyed stated that their companies (both private and public) are increasing the focus and frequency of their reporting related to ESG issues at least moderately;
85% of companies of those surveyed have a diversity, equity and inclusion program;
55% of publicly held companies, and 49% of privately held companies are investing in new technology to assist with measuring and reporting on ESG risks and issues;
66% of publicly held companies, and 78% of privately held companies are ready for potential new required ESG disclosures.

The G20’s Taskforce on Climate Related Financial Disclosures (TCFD) published its annual status report, finding that of 1,400 companies examined, they were applying an average of 4.2 of the taskforce’s 11 recommended disclosures in 2021, up from 3.6 in 2020. 43% of firms applied at least 5 and only 4% applied all 11. According to the report, investor demand appears to be driving the increase in reporting, as does recognizing that climate is material for their companies. (Oct 2022)

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EY Global Climate Risk Barometer (Ernst & Young Global Limited (EY)) — More businesses are starting to improve their disclosure on climate risks but are not yet taking much needed action to address these risks and respond to the needs of investors and customers, according to this new EY survey of 1,500 companies across 47 countries. 84% of companies provided some information in 2022, up from 70% in 2021. However, the average quality score still remains low, at 44%, up from 42% in 2021. Less than half of companies (49%) conducted scenario analysis. And just 29% of companies surveyed are referencing climate-related matters in their financial statements, with the majority of these qualitative rather than quantitative in nature. (Oct 2022)

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400 companies from the S&P 500, worth over US$28.2 trillion in market capitalization, disclosed data to CDP on their response to the climate crisis in 2021. Results show that 55% were 90-99% aligned with key recommendations from the Taskforce on Climate-related Financial Disclosures. 97% of responding companies claimed their boards now have oversight on climate risks. And 238 companies provided data on the potential financial value of opportunities and risks related to climate transition, with financial benefits of climate action ($4.8 trillion) valued at least 15 times higher than the cost of risks ($272-334 billion). (Sept 2022)

The State of Corporate Sustainability in 300 of the Largest US Companies
(Center for Impact at UCLA Anderson) — Compares corporate ESG disclosure trends against the World Economic Forum's (WEF) "Stakeholder Capitalism Metrics" framework. Of the 21 core ESG metrics proposed by WEF, the 300 US companies studied disclosed 49.6% of the metrics, ranging from a low of 14.8% to a high of 74.8%. Specific findings include (Aug 2022):

Of the four WEF metrics by pillar, 72.2% of firms disclosed on governance, 53.6% on prosperity, 43.8% on planet, and 28.8% on people.
Disclosure of GHG emissions was very high, with 81.2% of firms disclosing Scope 1, 78.2% disclosing Scope 2, and 61.2% disclosing Scope 3 emissions.
Only 43% of companies disclosed information in response to quantitative metrics, while 62% responded to qualitative metrics.
Just 9.7% of firms stated that their reports had been fully audited by a third-party. 41% had partial audits, and 49.3% had no third-party auditing.

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Ceres shared results from tracking 236 climate-related resolutions filed this year at North American companies, revealing that in 110 cases, companies were willing to “come to the table” with activist shareholders to negotiate climate-related commitments in exchange for withdrawing resolutions. These included agreements by electric utilities to set Scope 3 emissions reduction targets, by consumer goods companies to set science-based emissions targets, and several companies committing to report on their climate lobbying. A record number of climate resolutions were filed in 2022, however, they garnered a lower average vote of support than similar proposals in past years. Ceres theorizes the lower votes could be due to “more ambitious and directive” asks in the proposals, and the fact that some proposals were filed with companies that are “more resistant to engagement on climate” or with concentrated shareholder ownership that makes engagement more challenging. (Aug 2022)
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Climate Reporting in ASEAN: State of Corporate Practices (GRI, National Institute of Singapore Business School) — Analyzes 2020/2021 reporting from the top 100 companies (by market capitalization) in six of the ASEAN nations—Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam—with respect to climate disclosures. Of those 600 companies, 420 (70%) published sustainability reports that included climate-related disclosures (98 each from Malaysia and Singapore, 66 from the Philippines, 63 from Thailand, 55 from Indonesia, and 40 from Vietnam). The report analyzes the approach of those 420 companies within seven key areas: reporting, materiality, risks and opportunities, governance, strategy, targets, and performance. Insights include (July 2022):

Topics with the highest disclosure rate across the seven key areas: Material topicsrelated to climate change; Assigning climate-related responsibilities to a management level committee; Past metrics to allow for trend analysis
Topics with the lowest disclosure rate across the seven key areas: Medium-term time horizon regarding climate risk strategy; Use of climate-related scenario analysis to inform strategy; Compensation related to ESG performance
A significant majority of sampled companies (85%) use the GRI Standards, ranging from Singapore (99%) to Vietnam (65%); In the six markets, reporting using other frameworks is low: 19% use TCFD, 16% apply IIRC, and 14% use SASB.
Reporting on the Sustainable Development Goals is widespread by the companies in all six countries (76% in aggregate), with those from Thailand (95%) and Indonesia (93%) leading the way.

The Evolution of Sustainability Disclosure (SustainAbility Institute by ERM, Persefoni) —

Provides a comparative analysis of three major corporate disclosure framework proposals that were released for comment in March and April of 2022: 1) the U.S Securities and Exchange Commission's (SEC) Enhancement and Standardization of Climate-Related Disclosures for Investors; 2) the European Financial Reporting Advisory Group's (EFRAG) European Sustainability Reporting Standards (ESRS); and 3) the International Sustainability Standards Board's (ISSB) General Requirements for Disclosure of Sustainability-related Financial Information and Climate-related Disclosures, which can be used or adapted internationally. The ERM/Persefoni report contains a side-by-side comparison matrixshowing the particulars of each proposal across different content areas and provides a list of key insights, including (June 2022):

The three proposals reflect a significant convergence of guidance/requirementsthat's been sought by investors and other stakeholders to ensure that disclosures globally become more consistent and comparable. All three proposals draw heavily on the disclosure framework introduced by the Task Force on Climate-related Financial Disclosures (TCFD).
Companies should begin to evaluate their Scope 3 emissions to determine whether they are material or not and, if they are, to prepare to report them. As more companies report their Scope 1 and 2 emissions data, Scope 3 reporting will become easier and more reliable.
Third-party assurance is likely to become a requirement under the SEC and ESRS proposals.
It remains unclear whether jurisdictions under any of the three given frameworks will accept compliance with either of the others as a substitute. The ISSB has initiated a cross-jurisdictional working group to try to resolve the issue.
For all three frameworks, large companies should collect data beginning at least with their Fiscal Year 2023 and prepare to file by the following year.

The report's authors encourage all interested parties to participate in the comment process "to drive momentum towards a global baseline for climate- and sustainability-related disclosure requirements. Comment deadlines (all 2022): SEC—June 17; EFRAG—August 8; ISSB—July 29.

JUST Capital, a research and ratings nonprofit that evaluates corporate and investor performance against public priorities, has released its 2022 Corporate Racial Equity Tracker. The Tracker provides an accounting of commitments and actions by the 100 largest U.S. employers across six specific dimensions of racial equity: anti-discrimination policies, pay equity, diversity data, education and training, community investments, and response to mass incarceration. Key findings include (June 2022):

Workforce and board diversity disclosures increased overall, and the number of companies that disclosed conducting pay equity analyses went up 33% over last year.
Overall, companies continue to lag when it comes to disclosing the results of their pay equity analyses, racial and ethnic diversity targets, and details on anti-harassment training.
Few companies disclose commitments to advancing racial equity in the communities they most impact, like spending on local suppliers and having re-entry or second chance policies.

JUST Capital identified CEF members JPMorgan Chase, Microsoft, and Wells Fargo among the top performers, based on having released at least 15 of the 23 types of disclosures in the study. (June 2022)

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How Finance Professionals are Helping to Advance ESG Reporting (Ernst & Young (EY) / Financial Education & Research Foundation (FERF)) — Examines the involvement of financial professionals in ESG reporting, the robustness of formalized ESG policies and procedures, the most common ESG metrics reported, and the timing and manner in which ESG data is collected. The analysis is based on survey responses from 72 chief accounting officers (CAOs) and controllers from large US companies and interviews with financial executives from eight public companies. The researchers found that (May 2022):

60% indicated that members of the companies’ finance teams are either highly or moderately involved with ESG reporting efforts (although only 7% of CAOs and 3% of CFOs “own” the ESG reporting process).
37% said their organization is considering implementing formalized ESG processes owned by the finance function, while 8% already have such a system.
Just 8% said they have a relatively complete set of procedures in place to drive consistent application of ESG data across the organization.
60% use a patchwork of software applications to contain their ESG information and 55% house their ESG data in spreadsheets.
64% expect their finance team to spend much more time and resources to address ESG data collection and governance in the next 12 months.

Costs and Benefits of Climate-Related Disclosure Activities by Corporate Issuers and Institutional Investors (The SustainAbility Institute by ERM) — Presents survey results from corporate issuers and institutional investors to determine how much US organizations spend on climate-related disclosure activities. The findings are intended to inform discussions related to proposed SEC rules on climate-related disclosures and provide a comparison to the SEC’s cost estimates included in its draft rules. Key findings include (May 2022):

Average corporate issuers spend $533,000 annually on climate-related disclosure (SEC estimate $530,000), with the largest portion of spending going to GHG analysis and/or disclosures ($237,000 average annual cost).
Issuer average annual cost rises to $677,000 when survey categories not covered by the proposed SEC rule are included.
Institutional investors spend an average of $1,372,000 annually to collect, analyze, and report climate data to inform their investment decisions.
Institutional investors spend the most on external ESG ratings, data providers, and consultants ($487,000 average annual cost) and in-house, outside counsel, and proxy solicitor analysis of shareholder voting for ballot items related to gathering climate risk management information ($405,000 average annual cost).

The Carbon Bankroll: The Climate Impact and Untapped Power of Corporate Cash(Climate Safe Lending Network / The Outdoor Policy Outfit / BandFWD) — Reveals that companies’ investments and cash positions in banks are an overlooked and significant source of emissions, sometimes exceeding traditional Scope 1, 2, and 3 emissions combined. The first-of-its-kind report tracked publicly available data from 10 major corporations. Accounting for emissions from their cash and investments increased their total reported emissions by anywhere from 11% to 5,512%, undermining their sustainability efforts. Just one-third of the largest publicly traded financial institutions have set reliable 2030 goals, and the 60 largest commercial and investment banks invested $742 billion in the fossil fuel industry in 2021. The good news, according to the report, is that the data “also reveals one of the most powerful levers companies possess to realize their climate ambitions: using their clout as major cash managers and investors as a catalyst for climate progress.” The authors urge companies to (May 2022):

Select financial institutions and products that are environmentally sustainable and socially equitable from the existing landscape.
Engage their existing finance providers in their financial supply chain on climate and sustainability, making clear requests and incentivizing good practice.
Innovate new products, mechanisms, incentive schemes, data insights, behavioral drivers, etc., that enable companies to accelerate the decarbonization of their financial supply chains.
Advocate for climate-aligned financial regulation and policy that will increasingly drive the financial system toward progressive sustainable products and services.

Reuters surveyed 20 large tech and financial companies to find out whether (and, if so, how) they are tracking and incorporating remote employees’ carbon footprint in their corporate environmental impact reporting. The findings “underscore that remote work is not a simple solution to cutting corporate emissions,” according to the news agency. Increased use of heating fuel and electricity in the service of home offices can cancel out much of the benefit from reduced commuting emission, and corporate office space remains heated and lighted regardless of whether it is fully or partially occupied. In the absence of a standard methodology to quantify the net carbon footprint of remote or hybrid work, different companies are measuring and mitigating it in different ways, if at all. (May 2022)

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ESG Executive Survey: Preparing for High-Quality Disclosures (Deloitte) — Surveys over 300 senior leaders at US public companies on how their companies are meeting the growing demand for high-quality ESG disclosures, including current preparedness, plans, and challenges. Key findings include (March 2022):

57% of senior executives said data availability and data quality are their greatest challenges with respect to ESG data for disclosure.
21% of companies have an ESG council or working group to drive ESG action, and 57% are actively working to establish one.
92% of executives say their organization needs to invest in more technology to address the disclosure demand.
3 in 4 executives plan to obtain assurance for ESG disclosures in the next reporting cycle.

Now For Nature: The Decade of Delivery (CDP, in partnership with Oliver Wyman) — Examines the data related to climate, forests, and water security that 1,228 European companies disclosed to CDP in 2021 and identifies priorities for action. Eighty-five percent more companies have approved science-based targets than in 2020, but only 16% of companies have 1.5°C-aligned targets. Only 5% of companies disclosing on all three topics have a “robust” emissions target, a target to reduce water withdrawals, and a “best-practice forests commitment” that includes zero deforestation. (March 2022)

The EcoVadis network has grown 50% since the start of 2021 to over 750 “requesting organizations” (e.g., investors, procurement teams) and over 90,000 of their suppliers and trading partners. EcoVadis IQ customers grew 370%, and the network’s Improvement Magnitude (total scope of companies’ EcoVadis score improvement) nearly tripled. (March 2022)

2021 Climate Transition Plan Disclosure: Are Companies Being Transparent in Their Transition? (CDP) — Analyzes the data related to climate transition plans that over 13,000 companies disclosed to CDP in 2021, including industry and geographic trends. It finds that only a third of companies are developing climate transition plans, and only 1% of companies disclosed against all 24 indicators “associated with a credible plan.” The financial services, power, and fossil fuel sectors have the highest rates of plan disclosure, while transportation and apparel have the worst rates. (March 2022)

As of September 2021, 55% of Russell 1000 companies had disclosed some type of racial and ethnic workforce data (up from 32% in January 2021) and the number of companies disclosing an EEO-1 Report or Intersectional Data—“the gold standard”—had more than doubled to 11% (up from September 2020), according to JUST Capital. 20% publicly reported “highly generalized” Overall People of Color Data. (Feb 2022)

Sustainability Disclosure Practices in the Russell 3000, S&P 500, and S&P MidCap 400: 2022 Edition (The Conference Board, Heidrick & Struggles, ESGAUGE) — Analyzes US publicly traded companies’ climate disclosure and performance data in key areas: climate, water, biodiversity, use of external assurance, and gender diversity. It recommends ways for companies to “take a fresh look” at their disclosures and “provide greater information.” Key findings:

Larger US firms disclose their GHG emissions at 2.5 times the rate of smaller US firms and obtain external assurance for their sustainability information at 6 times the rate.
Across all three indexes, fewer than 12% of companies disclose the amount of water taken from water-stressed areas and fewer than 15% have biodiversity policies.
Three times as many shareholder proposals on board and workplace diversity were voted on last year (2020 baseline).

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CDP ‘Non-Disclosure Campaign’: 2021 Results (CDP) — Measures how capital market engagement impacts corporate environmental disclosure across three topics: climate change, forests, and water security. Key findings (Jan 2022):

56% more financial institutions signed up for the campaign than in 2020, and they engaged 29% more companies (a record 1,317 companies) for disclosures.
Companies were 2.3 times more likely to disclose to CDP across all three topics after being targeted by participating financial institutions, including 3.1 times more likely for forest-related disclosures.
The number of companies targeted for more disclosures was up by 67% year-on-year for water security, by one-fifth for climate, and by double for forests.
Companies in the transport, hospitality, and biotech sectors continue to not respond to disclosure requests.

List of Corporate Disclosure Research & Trends, 2021-2019 (PDF)

ESG Ratings and Rankings Research & Trends

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ESG and Global Investor Returns Study (Kroll) — Analyzes the historical returns of more than 13,000 publicly traded companies and their ESG ratings to determine the correlation. The study looked at companies in four geographic regions, 12 countries/markets, and 11 industries. It found that companies with better ESG ratings had annual returns 50% higher than those with lower ratings over the 2013−2021 period. (Sept 2023)

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90% of ESG practitioners agree that in the next two years having a strong ESG reporting program will give their organization a competitive advantage, according to this survey of over 900 ESG professionals by Workiva. 71% of respondents said three or more internal teams are involved in their company’s ESG reporting process and 74% say they expect their organizations will be required to comply with two or more global regulations. 97% agree that access to technology and data will play an essential role in making decisions to advance their ESG strategies in the future. However, while 87% of executives say their organizations have dedicated staff to oversee ESG reporting, only 68% of managers agree. And while 62% of executives strongly agree their company applies the same diligence to ESG reporting as it does to financial reporting, just 32% of managers do. (Aug 2023)

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Morningstar Sustainalytics launched its Low Carbon Transition Ratings to help investors identify and manage transition risks, respond to regulatory requirements and build climate investment strategies. The ratings provide “a forward-looking science-based assessment” of a company’s alignment with a net-zero pathway in line with a 1.5°C target, evaluating companies’ strategies and actions towards meeting net-zero commitments. The ratings currently cover about 4,000 of the largest public companies, and Morningstar Sustainalytics plans to expand this to over 12,500 by 2024. (April 2023)

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Rate the Raters 2023: ESG Ratings at a Crossroads (The SustainAbility Institute by ERM) — Finds that, while demand is surging, raters face rising concerns from corporates and investors around data accuracy and the overall quality and usefulness of ESG ratings, based on survey responses from 104 corporate and 33 investor respondents. Findings include (April 2023):

More than half of companies reported engaging with at least six ESG ratings providers;
Investor demand is the primary driver of engagement with ESG raters, with 57% of companies citing it as their top motivation;
43% of investor respondents ranked requirements by their firms to integrate ESG ratings and data into their investment practices as a top reason for using ESG ratings providers (compared with just 12% in 2018/19);
29% of corporates have low to very low trust that ESG ratings accurately reflect ESG performance, and 52% have only moderate trust; 38% of investors, on the other hand, report high to very high trust, and 59% report moderate trust;
Around half of both corporate and investor respondents see “greater consistency and comparability across ratings methodologies” and “improved quality and disclosure of methodology” as key issues for ESG raters to fix in order to maintain trust.

Sustainability reporting by the largest U.S. public companies reached an all-time high in 2021, according to a new G&A Institute report. Of Russell 1000 companies, 81% published sustainability reports in 2021, up from 70% in 2020. The larger half of the index reached 96% reporting, up from 92%, and the smaller half reached 68%, up substantially from 49% in 2020, reflecting that sustainability reporting is increasingly being adopted as a best practice in mid-cap companies. (Nov 2022)

99% of investors utilize companies’ ESG disclosures as part of their investment decision-making, including 74% of investors who conducted a rigorous evaluation of nonfinancial disclosures — up from 32% in 2018 — according to the EY Global Corporate Reporting and Institutional Investor Survey. However, 73% of investors said that companies have failed to create enhanced reporting, and 76% said “companies are highly selective in what information they provide to investors, raising concerns about greenwashing.” 88% of investors also responded that companies only provide “limited decision-useful ESG disclosures” unless forced to by regulatory requirements. (Nov 2022)

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ESG Book (Global alliance of companies, financial stakeholders, and standards organizations) — A new digital platform to make ESG data accessible, comparable, and transparent for all stakeholders. The free, public platform was developed according to the Ten Principles of the UN Global Compact, provides framework-neutral information in real-time, and allows users to keep ownership of their data. (Dec 2021)

Environmental, Social and Governance (ESG) Ratings and Data Products Providers (IOSCO) — Breaks down the implications of ESG rating providers’ and data providers’ activities to help IOSCO members establish frameworks for mitigating risks from these activities. Proposes recommendations to mitigate risks and address challenges faced by companies subject to ESG ratings and data products, as well as users of ESG rating and data providers’ products and services. (Aug 2021)

S&P Global publicly released 400 additional ESG data points on company’s scores, offering investors deeper insight into companies' environmental dimensions (biodiversity commitments, direct and indirect CO2 emissions, waste/hazardous disposal, energy consumption, water usage) social dimensions (safety policies, human rights commitments, code of ethics, independent auditing), and governance dimensions (anti-crime, corruption & bribery, board governance and executive compensation, ownership, diversity, materiality disclosures, risk and supply chain management, and tax strategy and reporting). (February 2021)

“OECD Business and Finance Outlook 2020” (OECD, October 2020) finds that investors do not have the “relevant, comparable, and verifiable ESG data they need to properly conduct due diligence, manage risks, measure outcomes, and align investments with sustainable, long-term value.” The report calls for increased collaboration toward a common set of global principles and guidelines that provide investors with the ESG data they need to properly assess companies’ performance on ESG-related investment goals.
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“Rate the Raters 2020” (SustainAbility, March 2020) offers insight into how investors are using corporate ESG data to inform their decision-making and which ratings investors find most useful when gathering ESG data. Key findings included the following:

The ratings most favored by investors were MSCI and Sustainalytics, primarily because of their broad coverage. CDP and ISS were also frequently mentioned for quality and usefulness.
Nearly all investors interviewed described sophisticated approaches to ESG analysis, where ratings inform rather than drive investment decision-making. Several have developed their own KPIs, tools, processes, and scores to fully evaluate corporate ESG performance.
The top four most useful sources of corporate ESG information were: corporate ESG ratings, direct engagement with companies, corporate sustainability reports, and in-house research.

"The Devil is in the Details: The Divergence in ESG Data and Implications for Sustainable Investing" - Concludes there is "less risk among companies that scored higher on ESG metrics" but urges investors interested in sustainable data "to educate themselves on the vast amount of data available, the varying methodologies and nuanced processes used by ratings agencies, as well as on the best way of embedding these considerations within the investment process." (QS Investors, Sep 2019)

CEF Private Meeting Notes: Not-for-attribution CEF member discussions on ESG Disclosure and Ratings & Rankings (Do not cite or circulate - June 2019 Leadership Retreat)

“The Blind Spot in Corporate Sustainability Rankings: Climate Policy Leadership” (Environmental Defense Fund, 2019) examines eight popular sustainability rankings to assess whether companies’ policy engagement activities were considered in the methodologies. The report finds that only one—InfluenceMap’s Climate Policy Engagement A-List—recognizes companies for lobbying or other activities in favor of public policies that protect the climate. The report also finds that only two rankings—InfuenceMap’s Climate Policy Engagement A-List and Corporate Knights Global 100—penalize or disqualify companies for lobbying or activities against public policies to protect the climate.

“Insights from the Reporting Exchange: Corporate Governance and Harmonization” (WBCSD and Climate Disclosure Standards Board, March 2018) examines corporate governance requirements across 60 countries to identify opportunities for further alignment in sustainability reporting. The report finds that the strongest aligned subject areas within the examined corporate governance codes were risk management and internal control, corporate leadership and remuneration, and dialogue with shareholders. However, the most inconsistently applied subject areas were those associated with accountability.

Regulatory Landscape

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Most G20 members still have few or no policies on nature-related corporate disclosure, according to new research by CDP. This is in spite of the commitment made at the UN Biodiversity Conference (COP15) by 19 of the 20 members to require companies and financial institutions to disclose their risks, dependencies and impacts on biodiversity by 2030. CDP found that only Brazil, the EU, and Indonesia have implemented or are in the process of implementing any biodiversity-related disclosure requirements. (Sept 2023)

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ESG regulations have increased 155% in the past decade, according to ESG Book analysis of more than 2,400 ESG regulations in more than 80 jurisdictions. 1,255 ESG policy interventions have been introduced worldwide since 2011, compared to 493 between 2001 and 2010. (June 2023)

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ESG Regulations and Reporting Standards Tracker (Sustainable Fitch) — This Excel database tracks significant global ESG regulatory developments, focused on sustainable taxonomies, ESG and climate disclosure regulations, and ESG fund requirements. It also tracks the most followed reporting frameworks and standards and aims to provide a concise summary and guidance on the new and upcoming regulatory issues that could affect issuers and investors in those ESG areas. The database is updated quarterly. (June 2023)

Additional regulation tracking sites

ESG Regulatory Tracker (S&P Global)
ESG Regulatory Hub (ESG Book)

Sustainable Finance in Europe: Regulatory State of Play (Association for Financial Markets in Europe (AFME)) — Provides a practical roadmap to the main sustainable finance-related regulatory developments within the European Union, the United Kingdom and Switzerland, including the direct and indirect impacts on banks, businesses, and capital markets. It also includes a timeline highlighting a number of key milestones to assist firms with their planning. First published in November 2021, the guide has now been updated to reflect the developments that have occurred since then. (March 2023)

Climate Transition Plans

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Transition Plan Resources (Transition Plan Taskforce (TPT)) — TPT released its final set of resources to help companies build robust and credible transition plans. Resources include its Disclosure Framework for transition plans; implementation guidance; case studies; sector summary guidance for 30 sectors; and sector-specific guidance for Asset Owners, Asset Managers, Banks, Electric Utilities & Power Generators, Food & Beverage, Metals & Mining, and Oil & Gas. (April 2024)

PR » EDIE »

Transition Plan Template (Exponential Roadmap Initiative) — This free-to-use transition plan template (in Word Doc format) helps companies operationalize climate strategy, step-by-step. It is in line with evolving regulation (U.S. and EU) and guidance from 12 different organizations. Also included is a “Detailed mapping of elements different organizations require in a transition plan,” categorized by initiative. (Jan 2024)

TPT Disclosure Framework (Transition Plan Taskforce (TPT)) — This finalized framework, from the UK-based Transition Plan Taskforce, helps corporations set out a credible and robust climate transition plan as part of annual reporting on forward business strategy. Specifically, the framework consists of five components: Disclosing Strategic Ambition; Implementation Strategy; Engagement Strategy; Metric & Targets; and Governance. The TPT Framework is designed to be consistent with, and build on, the final Climate-Related Disclosures standard (IFRS S2) issued by the International Sustainability Standards Board (ISSB) and also draws on the work of the Glasgow Financial Alliance for Net Zero (GFANZ). (October 2023)

BLOOMBERG » EDIE »

CDP Technical Note: Reporting on Climate Transition Plans, V2. (February 2023)

Expectations for Real-economy Transition Plans (GFANZ) Press release (September 2022)

Glasgow Financial Alliance for Net Zero (GFANZ) — Published a draft Net zero Transition Plan (NZTP), a common framework for financial institutions to disclose plans to increase financing in alignment with the clean energy transition and 1.5C temperature rise. The NZTP is intended to make those plans consistent and comparable for evaluation by stakeholders, ultimately driving capital to companies with the most robust and credible plans and accelerating the overall transition. GFANZ has identified four essential approaches for financial institutions to support the real-economy transition to net-zero emissions (June 2022):

Finance the development and scaling of net-zero technologies or services to replace high-emitting sources.
Increase support for companies that are already aligned to a 1.5C scenario.
Enable high and low-emitting real-economy companies to align business activity consistent with a 1.5 degrees C pathway for their sector.
Accelerate managed phaseout of high-emitting assets.

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CSRD Transposition Tracker (Ropes & Gray) — Describes Corporate Sustainability Reporting Directive (CSRD) developments across 27 EU member states and Norway, Iceland, and Liechtenstein. The Tracker includes information and developments as of 31 January 2024. (March 2024)

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EFRAG ESRS Q&A Platform: collects and answer technical questions that remain unresolved after thorough analysis by stakeholders to support the implementation of European Sustainability Reporting Standards (ESRS).

EFRAG estimates for auditing costs (PDF). See p. 43-44.

CDP-ESRS mapping (PDF). Based on 2023 CDP questionnaire.

Corporate Sustainability Reporting Directive Playbook (Reuters Events Sustainable Business)

A running list of ESG Controller Job Descriptions (PDFs). Please consider sharing ESG Controller JDs with Amy O'Meara.

Salesforce announced generative AI enhancements to its Net Zero Cloud platform to make ESG reporting easier for companies. This includes tools that will help: 1) generate sustainability reporting responses working from previous disclosures and uploaded information; 2) automate CSRD reports; and 3) assess the most material topics to their company. (Sept 2023) MORE » MORE 2 »

ESG & Sustainability Reporting Best Practices & Guidance

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Investor trust in sustainability data: An opportunity for corporate leaders (Deloitte and The Fletcher School at Tufts University) — Investigates how companies can enhance investor trust in their sustainability disclosures, surveying over 1,000 investors in North America, Europe, and Asia. It finds that 83% of surveyed investors incorporate sustainability information, and 79% have sustainability policies in place (compared to 20% five years ago). However, investors struggle with unclear corporate sustainability strategies, incomparable data, and lack of measurable outcomes from corporate reports. The report offers four actions to help earn investor trust: 1) Strengthen sustainability governance capabilities through greater coordination across the C-suite; 2) Invest in sustainability measurement; 3) Corroborate sustainability disclosures with third-party assurance; and 4) Proactively engage with investors to share the company’s sustainability actions, fostering transparency and accountability. (April 2024)

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Navigating the Sustainability Journey: The Impact of Mandatory Reporting on Travel & Tourism (World Travel & Tourism Council (WTTC) and Oliver Wyman) — Guides travel and tourism companies through sustainability frameworks, compliance timelines, and readiness assessments to help facilitate sustainability compliance. The report maps out sector-level and company-level opportunities and common challenges, and analyzes three major sustainability disclosure frameworks: (U.S., EU, and International Financial Reporting Standards (IFRS)). The report also includes a Sustainability Readiness Roadmap diagnostic tool. (March 2024)

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Accountability for Nature: Comparison of Nature-related Assessment and Disclosure Frameworks and Standards (United Nations Environment Programme World Conservation Monitoring Centre (UNEP-WCMC) and UNEP Finance Initiative (UNEP FI)) — Provides comparative research on seven leading standards, frameworks and systems for assessment and disclosure on nature-related issues. (Standards include CDP disclosure system, European Sustainability Reporting Standards (ESRS); Global Reporting Initiative (GRI) Standards; International Sustainability Standards Board (ISSB) Standards; Natural Capital Protocol; Science Based Targets Network (SBTN) target setting guidance; and Taskforce on Nature-related Financial Disclosures (TNFD) framework.) The report gives an overview of key methodological and conceptual trends, highlighting similarities and divergences related to their differing purposes. It offers 11 key findings on topics such as coverage of sectors, value chains, nature-related impacts, and targets; and finds that the reviewed approaches are demonstrating an increasing level of alignment in key concepts and methodological approaches. (Feb 2024)

Assessing nature-related risks and opportunities: case studies from Global Canopy’s 2023 TNFD piloting programme (Global Canopy) — These case studies, featuring six companies, detail a program run by Global Canopy to pilot the Taskforce on Nature-related Financial Disclosures (TNFD). They showcase each company’s experience with piloting the TNFD’s LEAP (Locate, Evaluate, Assess, Prepare) voluntary assessment approach, providing other organizations considering adopting TNFD recommendations practical examples and insights. Case studies include three investment managers, two infrastructure developers, and a grocery retailer. (Feb 2024)

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Accelerating Biodiversity and Ecosystem Reporting (Planet and Microsoft) — Helps navigate new sustainability reporting demands around nature-related impacts and dependencies, providing a step-by-step walk through reporting, from scoping to assessing and reporting. The guide surveys tools and data sources and reviews many of the available options. It also reviews concrete examples from industry and the scientific literature demonstrating how recent advances in Earth observation, artificial intelligence, and ecosystem science can help deliver up-to-date and actionable insights for biodiversity and ecosystem metrics. (Jan 2024)

Implementation Guidance for the International Sustainability Standards Board (ISSB) Standards and the European Sustainability Reporting Standards (ESRS) (WBCSD CFO Network) — Aims to help Chief Financial Officers (CFOs) prepare to implement the new sustainability reporting requirements to inform strategic decision-making on corporate sustainability performance and respond to requests from investors, banks and regulators. The Guidance provides analysis of the ISSB (International Financial Reporting Standards) and ESRS standards, and highlights priority issues for finance professionals identified through WBCSD’s CFO Network. The guidance analyzes IFRS and ESRS standards side-by-side, facilitating comparison, and provides links to additional tools and resources. It also provides extra consideration and suggestions for companies preparing to report against the U.S. Securities and Exchange Commission (SEC) climate disclosure rule (awaiting release). (Aug 2023)

Smart Freight Centre (SFC) Exchange Network — Published a Proof of Concept (PoC) Evaluation Report, a first step in establishing the SFC Exchange Network to promote data sharing between transport value chain actors and increase carbon transparency. The report assessed three key criteria: the feasibility of technical implementation, peer-to-peer data exchange, and willingness to share data. It also explored options for future governance and assurance frameworks. The results show the need for future efforts in the industry and the PoC “provided a momentum and promising results to continue towards a full build.” CEF members Amazon and Dow are participants and contributors, and CEF member McKinsey is a knowledge partner. (Aug 2023)

GHG Reporting Guide for Accountants and Financial Professionals (We Mean Business Coalition (WMBC) and International Federation of Accountants (IFAC)) — This two part guidance helps accountants and finance professionals deliver robust greenhouse gas (GHG) reporting. The first part (8 Steps to Enhance GHG Reporting) provides finance and accounting professionals with a detailed 8-step roadmap to engage with others across their business to prepare for GHG emissions reporting requirements aligned to financial reporting processes. The second part (Greenhouse Gas Reporting Building Blocks for Accountants) provides accountants with technical guidance to collect and enhance the quality of data related to Scopes 1, 2, and 3 emissions at individual entity and group levels. It also includes several tips for improving the reporting process and a list of additional resources. (June 2023)

Corporate Sustainability Reporting Directive Playbook (Reuters Events Sustainable Business) — This white paper covers how businesses can stay ahead of the curve as the sector enters a new era of sustainability reporting. The report discusses how to best develop a company’s report to benefit one’s business, its purpose, and its stakeholders; key elements of major standard-setting initiatives worldwide; the value of third-party assurance; the impact of making reports more machine-readable with digital tagging; and ensuring compliance across global jurisdictions. The paper also includes a series of questions to help review the current state of one’s reporting. (May 2023)

Enabling Corporate Plastics Disclosure (World Business Council for Sustainable Development (WBCSD) — This white paper aims to 1) clarify the metrics companies should use for plastic pollution accounting purposes, with a focus on the measurement of plastic leakage and circularity and 2) embed these metrics into a comprehensive corporate accountability system that could help companies comply with the future Global Plastics Agreement currently being negotiated by UN member states. The system consists of four stages: set an ambition, translate the target into a company action plan, establish accurate accounting metrics, and disclose the metrics externally. The paper also encourages the Agreement to embed the corporate accountability system directly to both strengthen the credibility of commitments and reduce reporting burdens on companies. (May 2023)

The Business Benefits of Third-Party Verification of Environmental Data (CDP) — After making the business case for verification of environmental data (such as Scope 3 emissions and water- and forests-related data), this step-by-step guide lays out the practical aspects of verification. These include: timing; calculating emissions inventories; choosing verification bodies; level of assurance; verification standard; accreditation; and deliverables. The report also explores common verification myths and ends with several brief case studies. (May 2023)

Battery Passport Content Guidance (Battery Pass) — Provides a detailed perspective on the battery passport content reporting requirements as per the EU Battery Regulation and beyond. This is the first publicly available comprehensive aggregation and interpretation allowing companies and other battery value chain players to prepare for the Battery Passport implementation. There is also additional guidance on Carbon Footprint Rules, which provides accounting rules to calculate company-specific carbon footprints of the battery Distribution and End-of-life and Recycling life cycle stages, as well as a Battery Passport Data Longlist, which includes all data attributes required and suggested for the battery passport alongside definitions and further relevant data dimensions. (April 2023)

Achieving Effective Internal Control over Sustainability Reporting (ICSR) (The Committee of Sponsoring Organizations of the Treadway Commission (COSO)) — This study and supplemental guidance helps companies achieve a system of internal control over sustainability reporting (ICSR) using the COSO Internal Control—Integrated Framework (ICIF), and applies ICIF’s 17 principles to the ICSR. The new framework creates five action points: committing to integrity by stating the organization’s purpose; determining objectives; identifying and assessing risks and opportunities; identifying control activities; and evaluating effectiveness. A key takeaway is aligning external reporting with internal benefits (i.e. business intelligence to support internal decision making and management of performance and impacts). This study expands on an early 2017 COSO study applying the ICIF to sustainability reporting. (April 2023)

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Environmental, Social, and Governance (ESG) Framework (The International Federation of Pharmaceutical Wholesalers (IFPW)) — IFPW launched an ESG framework and toolkit to serve as a resource for pharmaceutical wholesalers and distributors. The framework is intended to create global alignment and consistency across the pharmaceutical sector regarding how to effectively communicate and report on the impact of ESG initiatives to advance the supply chain. Guidance includes: addressing carbon emissions, energy use, and climate change; environmental stewardship through waste management, packaging design, and regulatory compliance; protecting access to medicine and advancing global equity; human capital management through diversity, equity, and inclusion initiatives; and ethics compliance and human rights throughout the supply chain. The framework leverages insights from a wide range of healthcare organizations, including CEF member McKesson. (Feb 2023)

End-to-End GHG Reporting of Logistics Operations — This new guidance, released by Smart Freight Centre and WBCSD, in partnership with over 30 companies, advances the quantification and sharing of logistics emissions and supports the logistics industry as they move toward net-zero. The guidance is designed to enable companies to better understand and track their logistics emissions on a granular operational level and to quantify the footprint of end-to-end logistics emissions, from supplier to final customer. It builds upon and complements two existing frameworks, the Smart Freight Centre’s Global Logistics Emissions Council Framework 2.0 (for logistics emissions) and WBCSD’s Pathfinder Framework (for product life cycle emissions). Participating CEF members include Amazon, Dow, Siemens, and Unilever. (Jan 2023)

Authentic Sustainability Assessment: A User Manual for the Sustainable Development Performance Indicators (UNRISD) — Offers new methodologies and indicators to address the blind spots of conventional sustainability metrics and reporting models of economic entities, including reporting overload and the design of frameworks only for for-profit entities, not those “in the social or solidarity economy.” The report includes a two-tiered framework made up of 61 indicators for measuring and assessing sustainability at the organizational level. (Nov 2022)

A new report offers proposed accounting and reporting guidelines for sustainable aviation fuels (SAF) and SAF certificates. These guidelines, produced jointly by the World Economic Forum’s Clean Skies for Tomorrow Coalition, RMI, and PwC Netherlands, offer detailed step-by-step instructions including recommended accounting calculation methods and reporting procedures for SAF suppliers, airlines, corporate travelers, private aircraft owners and operators, and freight operators, in the absence of formal global standards. (Oct 2022)

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The Good Food Institute (GFI) and the FAIRR Initiative investor network (FAIRR) launched two new reporting frameworks for alternative meat, seafood, eggs, and dairy companies to reveal their climate, biodiversity, nutrition, and other ESG impacts—the first framework for specialized companies, the second for diversified companies. These first-of-their-kind frameworks will provide comprehensive standards to assess and disclose ESG data of these companies, including enabling better assessment of alternative meat’s environmental impacts relative to meat. 38 companies and investors and 14 NGOs and ESG standard-setters provided input in the frameworks’ development. (Sept 2022)

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RMI’s Climate Intelligence Program has released guidance for steel companies to report and reduce the greenhouse gas impact of their products. Specific strategies to reduce impacts include: increasing recycled content of their products; deploying low-emissions ore processing technologies; and using zero-emissions electricity. The guidance was developed through a collaboration between RMI and the World Business Council for Sustainable Development (WBCSD). (Sept 2022)

List of ESG & Sustainability Reporting Best Practices & Guidance, 2021-2019 (PDF)

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French President Emmanuel Macron and the UN Secretary-General’s Special Envoy on Climate Ambition and Solutions Michael Bloomberg unveiled the Net-Zero Data Public Utility (NZDPU), the world’s first global, centralized database for private sector climate-related data. The NZDPU will be freely accessible and will provide information on corporate Scope 1, 2 and 3 emissions, reduction targets, and any transition-related data. A public consultation is open through 1 March 2024 for stakeholders to provide feedback on the development of the platform. (Dec 2023)

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EcoVadis Product Carbon Footprint (PCF) Data Exchange (EcoVadis) — EcoVadis incorporated this into its Carbon Action Module to unlock PCF tracking across its network of suppliers. This new feature aims to overcome a key barrier in corporate carbon reduction strategies, enabling emissions reporting for products and services purchased across the supply chain. The PCF Data Exchange follows the global standard for product-level emissions accounting and exchange as defined by the Partnership for Carbon Transparency (PACT), enabling a shift from industry averages to actual emissions data and thus increasing accuracy.

CDP announced a partnership to provide access to core climate data from hundreds of high-impact companies to the Net-Zero Data Public Utility (NZDPU) to help improve transparency of climate transition-related data. A proof of concept launch of the NZDPU is scheduled to take place at the COP28 climate summit in December, and will provide an initial set of companies’ Scope 1, 2, and 3 emissions and emissions reduction targets. (Sept 2023)

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SASB Report Builder (for Net Zero Cloud) (Salesforce) — This new feature enables users of Net Zero Cloud to automate the disclosure of ESG data in alignment with the International Financial Reporting Standards (IFRS) Foundation’s SASB Standards. The SASB Report Builder prioritizes ESG topics in accordance with the SASB’s industry-based standards, helping organizations to better measure, manage, and disclose ESG data for their specific industry. It can generate ESG reports across 14 industries in four sectors: consumer goods, financials, services, and technology & communications. (July 2023)

Nature & Biodiversity Risk (S&P Global Sustainable1) — This new dataset assesses nature-related impacts and dependencies across a company's direct operations, and can be applied at the asset, company, and portfolio level. The dataset, covering 17,000 companies and 1.6 million assets, will support companies, investors, and entities as they seek to understand, manage, and mitigate exposure of corporates and portfolios to nature related risks and impacts. It provides a number of new nature-related risk metrics including a dependency score (measuring level of reliance on 21 different ecosystem services) and an ecosystem footprint measure (measuring direct operational impact on nature and biodiversity), enabling greater understanding of a company or asset's dependency and impact on nature. The dataset, which is aligned with the LEAP risk and opportunity assessment approach (as recommended by the TNFD) can be leveraged by market participants to understand their nature-related risks and for more transparent alignment with TNFD recommendations. (May 2023)

Corporate ESG Dashboard (ESG Book) — Helps companies to manage, evaluate, and enhance sustainability performance and reporting. The tool enables users to analyze and optimize corporate ESG performance, drill down into ESG scores to underlying source data, and benchmark performance against industry peers. It also includes a policy and regulation database that allows companies to navigate reporting requirements and to disclose, validate, and update ESG data directly to stakeholders in real-time. (April 2023)

TCFD Reporting Solution (Intercontinental Exchange (ICE)) — This new service from ICE helps asset managers and other financial institutions comply with Task Force for Climate-Related Financial Disclosures (TCFD) requirements. The solution leverages a company’s climate transition data and analytics, corporate entity data, and green bond data, to provide the information needed for the metrics and targets reporting required in the TCFD framework. (Nov 2022)

A group of alternative asset managers launched the ESG Integrated Disclosure Project (ESG IDP) template, a new tool for providing a standard format for ESG disclosures for both private companies and credit investors. Along with enhanced transparency and consistency, this template offers private companies a baseline from which to develop their ESG reporting capacity, and offers investors an increased ability to identify industry-specific ESG risks. The template was created by ESG IDP, an industry initiative bringing together leading lenders in the private and syndicated credit markets to improve transparency and accountability. (Nov 2022)

Employee Carbon Management Solution (WeSpire) — A new suite of tools developed in conjunction with Cox Enterprises and South Pole to help companies measure, lower, and report on employee carbon emissions at home as well as the office. The suite offers “prescribed steps” so employees can “make continual, progressive carbon emission reductions over time through curated actions, based in behavioral science, rather than immediately go to offsetting.” South Pole’s carbon-offsetting capability is also embedded in the solution. (Jan 2022)
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Project Carbonview (Bayer, Bushel, Amazon Web Services) — A first-of-its-kind solution to help US farmers report on, analyze, and mitigate the environmental impact of their end-to-end supply chain carbon footprint. The solution will be piloted with ethanol producers (corn farmers) during the 2022 season, with plans to expand to other crops and other regions. (Dec 2021)

Temperature Alignment Data (Moody’s ESG Solutions) — A new solution that assesses how 4,400 global companies’ emission-reduction targets align with global temperature benchmarks as well as the companies’ progress toward their targets. Banks and asset managers can quantify and monitor targets within their portfolios, and companies can measure their targets “against peer targets and market expectations.” 42% of companies have emission-reduction targets, but only 3% of the targets are aligned with 1.5°C of global warming. (Dec 2021)

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Microsoft Cloud for Sustainability (Microsoft) — A new packaged SaaS solution to help organizations automate their carbon accounting and emissions management. In particular, the solution “connects to data sources, accelerates data integration and reporting, provides accurate carbon accounting, measures performance against goals, and enables intelligent insights to drive more effective action on sustainability.” Plans are in place for the solution to support water and waste in the future. (Nov 2021)
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Hybrid Workplace Carbon Calculator (Watershed) — A free interactive tool that helps companies estimate the climate effects of remote work policies. Users may compare a forecasted scenario against a baseline using various inputs modeled around 5 regions—San Francisco, New York City, Houston, London, and Toronto. (March 2021)

EY and Enablon unveiled a new cloud-based ESG management and reporting solution to help organizations manage, track and report ESG data and strategies in one centralized tool. The solution aligns with common standards and frameworks, including SASB, TCFD, and the UN SDGs. (March 2021)

“Complementary Use and Linkage of the GRI Standards and B Lab’s B Impact Assessment” (GRI and B Lab) summarizes how the GRI Standards and the B Impact Assessment, a tool to help companies measure and manage their impact on their stakeholders, may be used to complement one another. (March 2021)

Financial market data provider Refinitiv announced its ESG scores of over 10,000 companies are now free to the public, including through voice-activated smart speakers (e.g. “What is the score for…?”). Refinitiv claims that companies are “now better able to see and provide additional data to inform their ESG scores.” (February 2021)

Nasdaq unveiled a new platform designed to help companies streamline the process of gathering and sending ESG-related data to ratings agencies and other stakeholders. The sustainability reporting frameworks supported by the platform include GRI, ISS, MSCI, RobecoSAM, SASB, Sustainalytics, TCFD, and more. (Jan 2020)

Efforts to Harmonize ESG Reporting, Ratings & Rankings

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The Advanced and Indirect Mitigation Platform (AIM) — The new AIM Platform, convened by Gold Standard, Neoteric Energy and Climate, and the Center for Climate and Energy Solutions (C2ES), will serve as a hub for identifying and removing barriers to value chain mitigation and coordinating collective mitigation action in hard to abate sectors. In its first initiative, AIM will bring together experts and practitioners to develop credible approaches for accounting, reporting, and claiming the results of efforts that reduce emissions within a company’s value chain (such as reducing difficult to measure Scope 3 emissions). AIM is now issuing an open call to experts from civil society, standard-setting bodies, and the private sector to apply to participate in sectoral and cross-cutting working groups. To apply or to join AIM’s informational webinar on March 9, 11am-12pm EST, visit here. (Feb 2023)

New Secretariat to Address Connected Device Emissions — Global climate consultancy, the Carbon Trust, and technology companies Amazon, Meta, Microsoft, Samsung and Sky, are developing the industry’s first specification for measuring, accounting for, and decarbonizing the emissions associated with connected devices while being used by customers. Connected devices, which include phones and laptops, used a total of 500 Terawatt hours in 2020. The group aims to produce an accurate baseline for reporting energy efficiency improvements and establish rules for matching electricity consumption with renewable energy generation, as well as applying technology to optimize energy use of connected devices by consumers. (Sept 2022)

A group of 65 companies, investors and professional accountants endorsed a joint statement “calling for stronger alignment of regulatory and standard-setting efforts around sustainability disclosure.” The statement encourages the International Sustainability Standards Board (ISSB), the US Securities and Exchange Commission (SEC), and the European Financial Reporting Advisory Group (EFRAG) to keep working closely together but to better align current draft standards and initiatives that “are not technically compatible in terms of concepts, terminologies, and metrics.” The statement was developed jointly by the World Business Council of Sustainable Development (WBCSD), the Principles for Responsible Investment (PRI), and the International Federation of Accountants (IFAC). CEF member signatories included ADM and Hewlett Packard Enterprise. (Sept 2022)

Partnership for Carbon Transparency (PACT) — WBCSD-hosted PACT released its first data attribute specifications and exchange protocol to enable seamless exchange of carbon emissions data across different reporting solutions. This will allow companies to quickly and reliably account for Scope 3 emissions across their value chains, where system incompatibility had been a barrier in the past. The release follows a successful pilot, integrating data from different technology systems by CircularTree, IBM, SAP, and CEF member Siemens across a laundry detergent value chain. PACT's integration solution is a cornerstone of its larger Pathfinder Network, a decentralized infrastructure for sharing product-level carbon emissions data across value chains and industries, slated for publication in early 2023. (June 2022)

Finance the development and scaling of net-zero technologies or services to replace high-emitting sources.
Increase support for companies that are already aligned to a 1.5C scenario.
Enable high and low-emitting real-economy companies to align business activity consistent with a 1.5 degrees C pathway for their sector.
Accelerate managed phaseout of high-emitting assets.

Partnership for Carbon Transparency (PACT) — WBCSD announced it had achieved a major milestone in developing the Pathfinder Network (launched at COP26), a decentralized network infrastructure for sharing product-level carbon emissions data across value chains and industries: the first successful data exchange across different technology systems by CircularTree, IBM, SAP, and CEF member Siemens. PACT next plans to add new tech components, including from CEF members Amazon and Microsoft. It expects the Pathfinder Network to be available for use by the end of the year. (April 2022)

List of Efforts to Harmonize ESG Reporting, Ratings & Rankings, 2021-2019 (PDF)

How can we help? Please reach out to us!

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