Sustainability reporting frameworks

Question 1

What is the task force on climate related disclosures

Answer 1

Aimed to improve reporting on climate-related risks and opportunities for investors and lenders

They issued the following recommendations:

Apply financial materiality to identify climate-related risks and opportunities and assess implications of risk/opportunities

Assess resilience of strategy to future climate outcomes

Report on GHG emissions in accordance of GHG protocol corporate standard.

Report under 4 headings of governance, strategy, risk management, metrics and targets.

Not mandatory

Question 2

IFRS Sustainability disclosure standards

Answer 2

Issued by ISSB- can’t enforce, up to governments in own jurisdiction.

The aims were to provide a comprehensive set of global sustainability disclosure standards that meets the needs of investors and produces consistent/comparable information.

IFRS 1 sustainability financial related info- Intended to satisfy info needs of investors.
Companies should disclose material information about risks and opportunities that could affect the business

Disclosure under 4 headings, governance, risk management, strategy, metrics and targets.

IFRS S2 climate related- Disclosure about material information about climate risks/opportunities that may affect the business.

Disclose impacts such as GHG emissions.

Report under same 4 headings

Question 3

European Union corporate sustainability reporting directive

Answer 3

It applies double materiality.

Requires disclosure of sustainability risks, opportunities and impacts making it useful for

investors needs and

Wider group of stakeholders.

Companies must also obtain assurance over disclosures.

EU also produced European sustainability reporting standards required to be followed to comply, covering environmental, social and governance issues

Question 4

Who is CSRD mandatory for

Answer 4

Companies listed on the EU stock exchange

All EU companies classified as large (more than 250 employees, revenue of 50 million and total assets of 25 million)

Non- Eu companies e.g UK that have annual revenue of more than 150 million in the EU, and have a large EU subsidiary or EU listed subsidiary.

Question 5

Global reporting initiative

Answer 5

Independent organisation helping companies communicate sustainability related impact.

Organisations can voluntarily apply

Uses impact materiality.

Question 6

Task force on nature related financial disclosures.

Answer 6

Global initiative that issues recommendations helping businesses report on nature-related dependencies, impacts, risks and opportunities using double materiality.

They set out a recommended minimum disclosure of reporting only nature-related risks and opportunities. (info most useful for investors)

Provide recommendations for how to report on nature impacts and dependencies