Climate Data Gaps: Are Corporates Prepared for Incoming Regulation?

Below is an excerpt from ISS Corporate Solutions’ recently released article “Climate Data Gaps: Are Corporates Prepared for Incoming Regulation?” The full article is available on the ISS Corporate Solutions (ICS) online library.

While climate change has been a growing concern for corporates and investors over the past decade, most companies are still unprepared to implement the robust requirements of disclosure frameworks and develop enterprise risk management approaches to integrate complex climate-related considerations.

The next few years will likely see reporting of varying quality. It will not be unusual for companies to regularly reassess their risk models and climate strategy. There is already an inherent volatility in corporate climate data and this transitional period will further emphasize the caution necessary when making decisions based on corporates’ climate disclosures.

Key Takeaways:

• Climate risk disclosure has increased in the past years, yet most corporates are unprepared to integrate complex climate-related considerations in their strategy and disclosures.
• Incoming regulation will require companies to quickly gain an understanding of their risk exposure and develop robust disclosures. This will present a challenge, as currently, most companies’ rarely go beyond reporting Scope 1 & 2 emissions.
• There is a competitive advantage in experience and the sooner corporates start to develop the infrastructure and know-how needed to support a strong climate strategy the better prepared they will be as expectations grow.