How to ensure consistent corporate reporting on climate change

The UK's requirement for listed companies to report against the TCFD framework has in part contributed to the rapid rise in commitments from businesses to tackle climate change. But the lack of common rules governing what information companies should disclose around climate change is creating confusion. This is why collaboration between regulators and standard setters is critical.

Without comparability, investors will not be able to distinguish in an informed way between the climate actions and risks of different companies and may struggle to direct their capital in line with finding the transition.

The time left to respond to climate change is short. The risk is that instead of cooperating to create a common baseline, regulators and standard setters inadvertently diverge. This risk goes to the heart of the climate transition. A common foundation shared between sustainability reporting standards globally is vitally important because it will be key to understanding how companies are responding to climate change in a consistent way, where investors can allocate capital, and understanding whether the world is on track to meet its climate targets.

In this paper we explain how global alignment and consistency in reporting standards can help build trust in the climate transition; in what areas the three main bodies risk going in separate directions; and, why collaboration between them is critical to achieving that consistency.