The Evolution of Sustainability Disclosure
Expert Publications
White Paper

The Evolution of Sustainability Disclosure

The urgency of the climate crisis and lack of common reporting requirements has led to a proliferation of standards in response to investor demand for more climate-related financial information from companies. This has resulted in an “alphabet soup” of standards that can be difficult to navigate, with both investors and issuers calling for convergence and harmonization of reporting standards. The simultaneous development of the proposals by the SEC, EFRAG, and ISSB reflects a convergence of certain key reporting frameworks.

The SEC, EFRAG, and IFRS occupy significantly different positions in the global regulatory landscape. This joint white paper with ERM and Persefoni explores these different proposals and how their adoption can increase alignment and improve the quality of climate-related disclosures.

The report reveals several key takeaways, including:

  • The evolving guidance from the organizations builds on 20+ years of continuous improvement in the field: Ongoing and evolving engagements among the global collection of ESG, sustainability, and climate change experts continue to refine, focus and improve the overall disclosure landscape for ESG related information, especially quantifiable GHG data and climate change related risks.
  • Companies should focus on the Task Force on Climate-Related Financial Disclosures (TCFD) framework to help them to evaluate their climate-related financial risks and opportunities, and guide current reporting: The TCFD provides a framework for companies to use to help them to evaluate their climate-related financial risks and opportunities that applies across industries, geographies, and types of organizations.
  • More companies will disclose emissions (Scopes 1, 2, and 3): This will increase the amount of available data and facilitate reporting over time. In particular, as more companies report their Scopes 1 and 2 emissions data, Scope 3 reporting will become easier and more reliable.
  • Commenting on the proposals: Companies, investors, and other interested parties are strongly encouraged to share their comments with the SEC, EFRAG, and ISSB on the current exposure drafts. Commenters might consider the findings in this report as they comment on the proposals and beyond to drive momentum towards a global baseline for climate- and sustainability-related disclosure requirements. The deadlines for submission of comments are:
  • SEC: Comments are due June 17, 2022
  • ISSB: Comments are due July 29, 2022
  • EFRAG: Comments on ESRS are due by August 8, 2022

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