Today, the Corporate Reporting Dialogue launched the first report from its Better Alignment Project, which brought together major global standard-setters and framework providers to assess their alignment on the Task Force on Climate-related Financial Disclosures (TCFD) recommendations.
These frameworks already cross the boundaries between non-financial and financial reporting on an individual level – and through this collaboration, participants discovered the alignment of their frameworks both against the TCFD recommendations as well as between frameworks is much higher than anticipated.
The technical mapping shows strong alignment between the participants’ frameworks – including CDP, the Climate Disclosure Standards Board, the Global Reporting Initiative (GRI), the International Integrated Reporting Council and the Sustainability Accounting Standards Board (SASB) - and the TCFD recommendations. Specifically:
- The TCFD’s seven Principles for Effective Disclosures are harmonious and complementary with those of the participants’ frameworks and standards, with the mapping showing no sources of conflict.
- The participants are strongly aligned with the TCFD’s 11 recommended disclosures, each of which is comprehensively covered by the frameworks and standards.
- Overall, 80% of the TCFD's 50 metrics are fully or reasonably covered by CDP, GRI and SASB indicators.
- There are high levels of alignment between CDP, GRI and SASB for the TCFD’s illustrative example metrics, with 70% of the TCFD’s 50 metrics showing no substantive difference between the participants’ indicators. For the remaining 15 indicators, substantive differences are limited.
The high levels of alignment shown demonstrates to me, as chair of the Corporate Reporting Dialogue, that we have to get better at engaging and sharing insights with stakeholders who we know are confused.
Earlier this year, through an online survey and a series of global roundtables held in 11 countries, we consulted around 250 stakeholders, including businesses and investors, on how to support effective disclosures.
The stakeholders reaffirmed an urgent call from the market to unravel and solve inconsistencies in metrics for climate change reporting. Further consultation findings included confusion over the frameworks’ differing definitions of materiality and calls to better articulate the relationships, interconnections and alignment between the reporting frameworks.
Addressing market confusion
The market consultation sent a clear message to the participants of the Corporate Reporting Dialogue: we need to better communicate and illustrate the interconnection and harmony of the frameworks and standards, to help report preparers and investors navigate the reporting landscape.
The aim of this report is to begin to answer this call by providing a practical guide to help stakeholders understand and implement the TCFD recommendations when using the participants’ globally applicable frameworks and standards.
Accelerating Climate Action
A 2018 report by the Intergovernmental Panel on Climate Change found we have until 2030 – just 11 more years – to avert climate change.
The run-up to 2020 is a crucial period for delivering sufficient climate action to limit global warming to 1.5°C, as countries move to expand their climate commitments.
To help meet this global challenge, the World Economic Forum's 2019 Sustainable Development Impact summit has made Accelerating Climate Action one of four focus areas.
Following the UN Secretary-General’s Climate Action Summit this month, this meeting will bring together stakeholders to cap global warming at 1.5°C through innovative partnerships and smart technologies. The action areas include heavy industries and transport, energy innovation, nature-based climate solutions, restoring ocean health and the role cities, among others.
I encourage companies and investors to provide additional feedback to the Corporate Reporting Dialogue regarding the level of clarity it offers to the market for reporting effectively on the risks and opportunities presented by climate change.
It is essential we continue our dialogue with the global marketplace if we are to create the clear and comparable reporting guidelines needed to support a systemic shift towards a sustainable global financial system.
The participants of the Corporate Reporting Dialogue remain committed to ensuring the corporate reporting landscape is easily navigable, responds to the needs of report preparers and users and conducive to efficient and effective corporate reporting. We believe today’s report is a positive step forward, and we look forward to furthering this work with you in the future.
What is the World Economic Forum’s Sustainable Development Impact summit?
It’s an annual meeting featuring top examples of public-private cooperation and Fourth Industrial Revolution technologies being used to develop the sustainable development agenda.
It runs alongside the United Nations General Assembly, which this year features a one-day climate summit. This is timely given rising public fears – and citizen action – over weather conditions, pollution, ocean health and dwindling wildlife. It also reflects the understanding of the growing business case for action.
The UN’s Strategic Development Goals and the Paris Agreement provide the architecture for resolving many of these challenges. But to achieve this, we need to change the patterns of production, operation and consumption.
The World Economic Forum’s work is key, with the summit offering the opportunity to debate, discuss and engage on these issues at a global policy level.