Nowadays, users of the financial statements want to see more on the financial implications of climate-related impacts on companies. In response to this, more and more businesses are including climate-related information in their financial disclosures, but are still failing to provide sufficient clarity for investors. Jon Williams, sustainability & climate change partner at PwC, believes this is due to the lack of data availability of scenario analysis and the need for standardised metrics and targets.
The last status report from the Task Force on Climate-related Financial Disclosures (TCFD) has shown that in the last 2 years nearly 800 organisations have adopted the TCFD recommendations. Analysis shows 91% have decided to ‘fully’ or ‘partially’ implement the TCFD recommendations, with 67% stating their companies plan to complete implementation within three years. Three quarters (76%) of users stated that they are already using climate-related financial disclosures in their decision-making process.
While the taskforce described the disclosure review and survey as ‘encouraging’, it said it has concerns that not enough companies were disclosing decision-useful climate-related financial information, with more clarity needed.