No more time for excuses when it comes to climate-related reporting

CDSB's Managing Director, Mardi McBrien, speaks about the release of the Better Alignment Project report "Driving Alignment in Climate-related Reporting".

As the only TCFD-referenced reporting framework that focuses specifically on how companies can integrate climate change-related information into mainstream reports, the Climate Disclosure Standards Board (CDSB) occupies a unique place in the market and welcomes the support from the other members of the Corporate Reporting Dialogue (CRD) in achieving our mission.

CDSB’s mission, vision and brand is grounded in the principle of harmonisation. CDSB was set up in 2007 by a group of forward-thinking business and environmental NGOs that recognised a framework had to be put in place in the absence of international accounting standards taking climate-related financial matters into consideration. The objective was to provide interpretative guidance on reporting the financially material risks and opportunities presented by climate change and environmental resource degradation to capital markets. Such risks and opportunities are foreseeable and could influence the performance of a company, thus financially material and relevant to a director’s duty of care. As such, this information needed to be integrated into and reported via the mainstream financial report/10-K/integrated report. When we set about writing the original CDSB Framework, at the heart of our work was what Michael Izza, CEO of the ICAEW said so eloquently at the time “that we deliberately didn’t reinvent the wheel, but built on the reporting frameworks, standards and guidance in the market”. An alignment table  was also developed to demonstrate where report preparers could find useful information collected via frameworks, tools and methodologies they already use to make non-financial reporting in mainstream reports more efficient. 

Today, we see the release of the CRD’s report “Driving Alignment in Climate-related Reporting”. This presents the first-year outcomes of the Better Alignment Project, which focused on climate change reporting and alignment of CDP, the Climate Disclosure Standards Board (CDSB), the Global Reporting Initiative (GRI), the International Integrated Reporting Council (IIRC) and the Sustainability Accounting Standards Board (SASB) reporting standards and frameworks against the Task Force on Climate related Financial Disclosure (TCFD) recommendations. The report is good news for the 10,000+ companies already reporting to CDP and/or using GRI /SASB standards globally. There is strong alignment between the frameworks and, with your existing reporting practices, you already have a solid base of useful information and internal practices that can be used to support your climate-related reporting. The extensive indicator grid in the report also shows how datapoints can be reused and repurposed between the different reporting frameworks and standards, as well as the TCFD’s illustrative example metrics. The information exists - so you have no excuse to delay in implementing the TCFD recommendations and utilising the CDSB framework to incorporate climate change information into your mainstream report. 

I acknowledge that the findings of the report highlight a need for greater clarity on how the CRD participant’s frameworks and standards could be used in a complementary manner with the TCFD’s recommendations. 

To help further this, CDSB and SASB yesterday launched the TCFD Good Practice Handbook with examples from companies’ 2018 mainstream reports to demonstrate what effective reporting looks like, drawing on a number of sectors and geographies across the four core elements of the TCFD (risk management, governance, strategy and metrics and targets). The Handbook builds directly on the TCFD Implementation Guide launched earlier this year, which laid the groundwork for effective climate-related disclosures and provided mock examples. The recently launched climate disclosure e-learning courses on the TCFD Knowledge Hub were also built in collaboration with the industry and include a module dedicated to the corporate reporting landscape. 

For those of you who would prefer to gain in-person, hands on experience with climate disclosure, I’m pleased to tell you that the CDSB team are busier than ever running freely available training workshops, online e-learning courses and webinars. Our outreach activities are designed to support corporates wanting to take the TCFD recommendations from principles to practice to truly integrate decision-useful climate and, more broadly, ESG information into mainstream reports. CDSB is committed to working at the technical level with our CRD partners and others to harmonise practices to ensure that corporate reporting continues to fulfil its objectives and that the tools  available to support it are fit for purpose in the transition to a low carbon, climate-resilient economy.

My key take-away from the launch of the CRD report today, and the dominating message I am hearing from the podiums, stages and corridors of Climate Week NYC, is that we need everyone to take action now. The argument that there are too many reporting frameworks and not knowing where to find the information is no longer a justification for inaction. The report can support and enhance the efforts of companies that are already proudly reporting sustainability information via the leading frameworks and standards globally. The findings also help companies who are just starting out with disclosing in line with the TCFD recommendations. As we always say, the best way to get start is to just get started with what you have and improve from there – don’t let the perfect be the enemy of the good. CDSB and the TCFD Knowledge Hub are here to help – there is no more time for excuses. The decade of climate action starts today.