Climate reporting in a changing regulatory landscape

For financial institutions and corporations, reporting on climate-related risks and opportunities has either become a legal requirement or, at the very least, expected best practice.

With businesses expanding globally, supply chains spanning continents, and investors eyeing opportunities on an international scale, consistency in climate reporting is paramount. Global reporting frameworks make comparing climate disclosures easier for investors, regulators and other stakeholders.

What is climate reporting, and why does it matter?

Climate reporting focuses on two sides of the same coin: 1) understanding the company’s impact on the climate, and 2) the consequences of climate change on the company itself.

Understanding this relationship is critical for businesses to navigate sustainability challenges. It also presents an avenue for companies to proactively identify strategies to mitigate risks and leverage opportunities associated with transitioning to Net Zero.

Climate reporting increases transparency on the consequences a business faces due to its climate-related risks. It encourages corporate climate action as businesses assess their operations’ climate and financial impact while driving investment towards more climate-resilient businesses.

Robust climate reporting covers emissions reporting, climate risk assessments, target setting, and the disclosure of climate mitigation strategies. If done correctly, it presents an opportunity for companies and financial institutions to gain competitive advantages, such as:

  • Improve the resilience of their business models and strategies.
  • Identify opportunities to futureproof their business by taking more targeted climate action.
  • Capitalise on opportunities that the transition to a cleaner, more sustainable Net Zero future presents.
  • Ensure companies take responsibility for their impact on the climate.

What are the key frameworks, regulations and standards?

One of the most recognised climate reporting methodologies is the Task Force on Climate-Related Financial Disclosures (TCFD) framework. It was created to provide a standard methodology on how companies can assess climate-related risks and opportunities. TCFD forms the basis of other well-known disclosure standards and regulations, including CDP, EU regulation, and the recently launched sustainability-related disclosure standards by the ISSB.

In 2023, the ISSB, which is part of the International Financial Reporting Standards (IFRS) Foundation, published its inaugural standards on sustainability-related disclosures: IFRS 1 and 2. The standards aim to create a global baseline for sustainability reporting and will allow organisations to report on these matters in a transparent and comparable way. The ISSB standard has been constructed by drawing upon existing frameworks, including the TCFD recommendations. The ISSB standards will come into effect on 1 January 2024. It is then up to countries to decide whether to adopt these standards.

The Transition Plan Taskforce (TPT) has launched its Disclosure Framework and Implementation Guidance. These will steer companies toward creating and communicating their Net Zero transition plans. This framework seeks to equip businesses with the knowledge needed to disclose their transition plans.





The TCFD forms the basis of climate risk related areas of other disclosure frameworks and other regulations. 

A global overview 

Though reporting climate-related risks and opportunities has to-date been voluntary in most jurisdictions, this is changing. Droughts, floods, hurricanes, and the wider effects of climate change are unfolding in front of us. It makes business riskier than ever. At the same time, investors and customers are beginning to monitor a business's influence on the climate, putting growing pressure on businesses to act. To help businesses and financial institutions navigate this space, here is a snapshot of the current regulatory landscape and upcoming changes across countries.  

The new standards by the ISSB will soon come into play and are expected to be adopted by many jurisdictions across the world. This means that companies and financial institutions will likely have to report in line with those requirements. 




Best practices and steps organisations can take

Though it may appear complex, understanding the risks and reporting on climate-related issues should not be a mere tick box exercise. On the contrary, a deep understanding of your organisation’s risks and opportunities can become a competitive advantage. Below are some actions organisations can take to help meet their reporting requirements and go beyond simple compliance:

  • Inform yourself of the regulatory landscape and its applicability to the markets in which you operate. 
  • Assess who must be involved in data collection processes to ensure internal alignment. This could be done by integrating your compliance and sustainability teams.  
  • Treat climate reporting as an ongoing process. Regularly review and update your disclosures and strategies based on evolving climate-related developments.
  • Identify your key stakeholders. This could be government, but will also likely include investors, international suppliers or customers.
  • Undertake a comprehensive mapping exercise. This ensures you know the climate risks and opportunities your business faces and where they are concentrated. It also outlines how different climate scenarios could play out for your business in practice.
  • Highlight the strategic significance and financial implications of climate change to your business, including senior management.
  • Explore potential collaborations with other businesses, industry associations and governmental bodies to address risks collectively. 


How we can help

In today’s world, organisations operate internationally. Recognising this, we have climate risk and reporting experts across Latin America, Europe, Africa and Asia. This means we can give you a close overview of the reporting requirements across the regions in which you operate.

Climate reporting is part of a wider journey on climate action. Understanding your risks and opportunities is a good starting point for planning your transition. Building upon our expertise in reducing emissions, we can help you gain the insights to plan your transition. As part of this, we model different climate scenarios and sustainability initiatives to determine financial sensitivities, dependencies and potential new revenue streams. 

From this, we can help you set carbon reduction targets to minimise your climate impact and assess how changes in business models, such as a recommerce model, can help address your climate risks.   

Contact us

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