On 31st January 2022, the Climate Disclosure Standards Board (CDSB) was consolidated into the IFRS Foundation to support the work of the newly established International Sustainability Standards Board (ISSB). While this site and its resources remain relevant for preparers looking to improve sustainability disclosure until such time as the ISSB issues its IFRS Sustainability Disclosure Standards on such topics, no further work or guidance will be produced or published by CDSB. For further information please visit the IFRS website.

Japan and Korea companies trial CDSB’s Framework

Businesses in Japan and Korea are working on enhancing their investor relations with the help of CDSB’s Framework. CDSB has released two reports based on the Japanese and Korean experience and context of corporate non-financial reporting.

Over the last two years CDSB has run pilot programs to assist companies in conforming to mandatory reporting mechanisms in both Japan and Korea. The programs were initiated in order to develop climate change-related reporting for companies operating in Korea and Japan and to assist companies in working towards incorporating non-financial information into their mainstream financial reports. Companies that participated in these programs discussed the beneficial outcomes that non-financial reporting can afford their business as well as challenges faced when conforming to the reporting requirements in their country. The pilot programs included corporate working groups, roundtables with investors and engagement with country regulators.

“Participating in the CDSB Working Group, we could realize that the deep analysis of the climate change impact to our business in the process of identifying its risks and opportunities is necessary for the integration between the environment and business strategy.”

– TOTO Ltd.

“Through the trial basis use of the Climate Change Reporting Framework, it was a very worthwhile experience to participate in building the international Framework. In addition, some issues of preparing reports according to the Framework came in sight gradually. In-house, there was an effect of increasing the communication between the environment department and the IR department. Through the activities in the working group, it was very worthwhile to engage with investors, accountants, and auditing firms. We will continue to cooperate with CDSB to establish an effective disclosure system in society.”

– Kirin Holdings Company, Limited

Feedback from participating companies showed that it was a productive exercise and will enhance their reporting practices going forward. To assist in the implementation of CDSB’s Framework into the Japanese and Korean contexts, the Framework has now been translated into Japanese and Korean.

The reports “Corporate climate change reporting: Japan Focus” and “Korea Focus: Corporate Climate Change Reporting for a sustainable future” provide a disclosure toolkit for companies on non financial information, both in reporting to financial markets and in preparing for, and adhering to mandatory reporting in Korea and Japan. The programs presented in the report outline the start of CDSB’s ongoing dialogue with companies, investors, accounting bodies, stock exchanges and government departments and agencies in Japan and Korea as CDSB drives the trend to include climate change-related information into annual reports.

“By attending the CDSB workshop, we learned that there needs to be an assessment of how climate change affects our business, evaluation of our relevant strategies and assessment of therisks and opportunities to our company. The workshop has been a big help and a great guide in reaching the targets of LG’s green management. We tend to disclose strategy and targets - the results of the targets can then be used with the Framework.”

– LG Electronics

“By disclosing climate change-related information that is comparable to our peers’ in our financial report, we are encouraged to implement more effective plans to reduce our carbon emissions.”

– Hyundai Engineering & Construction

CDSB would like to thank the UK Government Foreign and Commonwealth Office for its kind financial support and CDP Japan and KoSIF in Korea for their leadership in the pilot program’s delivery.