Global climate reporting is evolving fast. The proposed Securities and Exchange Commission (SEC) rules to standardize climate-related disclosures for investors in the U.S. and the EU Taxonomy for sustainable activities build on the foundations laid by the international Financial Stability Board (FSB)’s Task Force on Climate-related Financial Disclosures (TCFD). Alongside this, international climate reporting standards continue to advance with the formation of the International Standards Sustainability Board (ISSB) towards the end of 2021, itself part of the Corporate Sustainability Reporting Directive (CSRD), an EU environmental, social and governance (ESG) standard passed late in 2022 to make corporate sustainability reporting more widespread, consistent and standardized.
Given the breadth of climate disclosure regimes, if you’re striving to comply and meet the expectations of shareholders and investors unpicking your climate reporting priorities is not always straightforward. This can be particularly true if you’re thinking beyond compliance and using climate reporting as a catalyst for strategic change.
We’ve analysed the three key climate reporting frameworks: TCFD, the SEC climate proposal and the EU Taxonomy, in addition to ISSB and the related CSRD, to create a comparative table.
WTW’s Climate Reporting Comparative Table is designed to help you quickly identify the main reporting criteria, crossovers between climate reporting regimes and their key departures, while also indicating where one framework refines or evolves the principles established by another. The table also compares where the different climate reporting requirements apply, to which institutions and to what extent the climate disclosure rules in question are voluntary or mandatory, amongst other comparative criteria.
The headline implications from our climate reporting comparative exercise include:
Bear in mind that climate regulation is a fast-moving area. We have created and shared this information on the basis of it being our understanding of what was correct at the time of writing. This includes where we have responded with a ‘Likely’ assessment of any of the comparative criteria.
While it’s possible that in the near future we could see ISSB or another framework take greater prominence as global climate reporting standards mature, as Harvard Law School Forum on Corporate Governance points out in its 2022 paper on navigating the broader ESG landscape, TCFD is one of the most broadly used sustainability reporting frameworks, endorsed by more than 2,600 organizations worldwide. TCFD, the paper argues, provides a point of continuity with voluntary reporting and wider international ESG reporting frameworks, indicating that even if TCFD’s dominance fades, its DNA is likely to be coded into any subsequent set of global requirements.
Regardless of future change in climate reporting, the overall message is clear: you will need to act decisively and urgently on climate both to comply with the growing body of regulation and to meet the expectations of investors, customers and other stakeholders.
If you’re in any doubt about your climate reporting obligations, or want to know the latest updates as climate compliance regimes evolve, do get in touch.
To access WTW’s Climate Reporting Comparative Table, please fill in the short form on this page.
Lisa leads WTW’s Enterprise and Transition Risk Consulting practice for North America and has 15 years of experience in risk and insurance. Over the course of her career, she has led large strategic consulting engagements and pioneered the development of WTW web apps including Global Peril Diagnostic, a natural catastrophe and terrorism model, and Collateral Quantified, an actuarial reserving and negotiation tool. Lisa helps organizations navigate, quantify, and make efficient investments to control their strategic and enterprise risks. She is part of WTW’s Global Climate Strategy Task Force and takes a leading role shaping WTW’s Risk & Broking large account strategy.
