Skip to main content

High CO2-producing companies to face challenges with new climate-related disclosure requirements

          

 

Current corporate reporting by a majority of companies producing the highest levels of greenhouse gas emissions would not comply with proposed new requirements from the International Sustainability Standards Board (ISSB).

This is the key finding of research carried out by ACCA (the Association of Chartered Certified Accountants) and the Adam Smith Business School at Glasgow University, aiming to find out how prepared companies are for new climate-related reporting rules being developed by the International Sustainability Standards Board, formed last November.

The research analysed the most recent reports published by companies in the construction material and chemical industries which had the highest greenhouse gas emissions over the last three years, comparing current disclosures against the disclosure requirements of the proposed climate-related disclosure standard (IFRS S2, Climate-related Disclosures).

This analysis found that most companies fall short of the type and level of disclosure that the ISSB is proposing. Further, the research found that disclosures were often scattered and duplicated across different company sources, often with no cross-reference, and with little connection to financial information published in the financial statements.

Those companies (77% of the sample) that have adopted the Task Force on Climate-related Financial Disclosures (TCFD) Recommendations are significantly better prepared to comply with the proposed new disclosure requirements. However, even these companies will need to significantly increase their climate-related reporting to meet the new requirements of the proposed standard, which the ISSB aims to finalise by the end of this year.

ACCA and the Adam Smith Business School are urging the ISSB to ensure the disclosure requirements are clear and easily understandable, and that thorough guidance is provided.

Commenting on the research, ACCA’s head of Pakistan, Assad Hameed Khan says: ‘The colossal impact of recent floods in Pakistan is a reminder on the national climate action urgency. Thus, it is imperative for companies to adopt ESG focused (sustainable) practices and initiate substantive action related to climate change and strengthen reporting through robust climate-related disclosures. These measures can be a competitive advantage for companies, as well as, enhancing transparency and trust for investors, customers, employees and regulators.

Mike Suffield, director of policy and insights, ACCA, says: ‘Standard-setters and regulators should focus support and guidance on those companies that have not adopted the TCFD Recommendations, including smaller businesses. It may be appropriate to allow a period of voluntary adoption before making the ISSB standards mandatory.'

He also called on regulators to help users of this climate-related information by resolving the problem of the scattered location of disclosures, the lack of cross-referencing and duplication.

He added: ‘The ISSB also has an important role to play by providing greater clarity around location and cross-referencing in the standards, and by collaborating with the regulators to achieve a consistent approach.

‘This research is not about pointing fingers at businesses. It is about understanding where they are at in their climate disclosures and working out how to help them improve, this is vital work for all of us.’

Comments

Popular posts from this blog

Huawei and OPPO Sign Global Patent Cross-licensing Agreement

            Huawei and OPPO announced the signing of a global patent cross-licensing agreement, which covers cellular standard essential patents, including 5G. "After more than 20 years of continuous innovation, Huawei has developed multiple high-value patent portfolios in the global marketplace in domains like 5G, Wi-Fi, and audio/video codecs," said Alan Fan, Head of Huawei's Intellectual Property Department. "We are delighted to have reached a cross-licensing agreement with OPPO. The mutual recognition of intellectual property value between companies is a major step towards fostering a positive cycle of innovation and research in high-value standards: investing, receiving returns from investment, and then reinvesting. This will enable our industry to keep innovating and provide consumers with more competitive products and services." "We are very pleased to enter into patent cross-licensing agreement with Huawei. It clearly demonstrates that the two compa...

Peshawar Zalmi Releases "Zalmi Raalal" Official Anthem Powered by TCL

             TCL, Pakistan's No.1 LED TV Brand, in collaboration with Peshawar Zalmi, has released their most awaited anthem for PSL 8, " Zalmi Raalal ". Directed by the maestro Hassan Dawar himself, "Zalmi Raalal" is a star-studded, power-packed amalgamation of music, fashion, and sports, the three foremost passion points of Peshawar Zalmi. Produced by Naughty Boy, who has worked in the global music industry with the likes of Beyoncé, Wiz Khalifa, and Sam Smith, the music video features cricket's biggest superstars Darren Sammy and Babar Azam, as well as Pakistan's biggest celebrities Mahira Khan and Hamza Ali Abbasi. Peshawar Zalmi's official anthem for 2023, "Zalmi Raalal", is an ode to passion, a story entailing the beauty and power of the KP region and its people. The anthem has crossed one million views on all online platforms since its release, and the number is increasing fast.   The star-studded and narrative-centric anthem feature...

Economic confidence among finance professionals edges higher globally despite big fall in North America

                                            The latest ACCA (the Association of Chartered Certified Accountants) and IMA ®  (Institute of Management Accountants)  Global Economic Conditions Survey (GECS) suggests that confidence among accountants and finance professionals edged slightly higher in Q2 2024 and is just above its historical average.  For chief financial officers (CFOs), all the key global indicators rose, with sharp gains evident in the New Orders and Capital Expenditure indices.   There were some notable regional differences . Western Europe-based accountants reported another decent increase in confidence as the euro area and UK economies continue to stage recoveries. Even Asia Pacific saw a small rise off the back of a huge gain previously, and the New Orders Index increased strongly. The region is benefitting from improvements in the global economy...