Climate Change Disclosures in CSR Frameworks

What if sustainability reporting became as clear and consistent as financial statements? In 2021, the International Sustainability Standards Board (ISSB) set out to do just that. Responding to growing demands for globally recognized standards, the ISSB didn’t reinvent the wheel. Instead, It is built on the work of established frameworks like SASB (Sustainability Accounting Standards Board) and TCFD (Task Force on Climate-related Financial Disclosures). This effort culminated in the release of IFRS S1 and IFRS S2 in June 2023. These standards address general sustainability risks and climate-specific risks, making it easier for investors to assess a company's resilience in a changing world. Here’s why this matters: -Investors are paying attention. A recent PwC survey revealed that 83% of investors consider ESG risks essential in their decision-making. But inconsistent reporting has made it challenging to compare companies. -Sustainability is industry-specific. The ISSB integrates SASB's 77 industry-specific standards, bridging the gap between general guidelines and sector-focused realities. As someone deeply involved in sustainability and accounting, I see this as a significant step forward. For years, companies have struggled to align sustainability and financial reporting. The ISSB standards simplify this process, ensuring that sustainability data is as reliable and comparable as financial statements. Adopting these standards now, even on a voluntary basis, positions companies ahead of the curve. It’s an opportunity to show stakeholders investors, regulators, and customers—that you’re serious about transparency and long-term value. In my experience, transparency is the foundation of trust. When sustainability data is as clear as financial data, everyone benefits companies can focus on meaningful action, and investors gain the clarity they need to make informed decisions. What’s your take? Have you seen these standards in action, or are you exploring ways to integrate them into your reporting? Let’s discuss this in the comments.

#𝗘𝗦𝗚𝗶𝗻𝗧𝗵𝗿𝗲𝗲: 𝗜𝘁’𝘀 𝗴𝗼 𝘁𝗶𝗺𝗲!  𝙃𝙤𝙩 𝙤𝙛𝙛 𝙩𝙝𝙚 𝙥𝙧𝙚𝙨𝙨! Deloitte’s comprehensive Heads Up https://lnkd.in/ewk2x8_d provides a deep dive analysis of the final SEC Climate Disclosure Rule. Check out this practical tool that helps unpack the requirements and nuances of the final rule, including practical examples. A few areas of further emphasis to highlight connectedness considerations across multiple areas of the final rule: 𝟭. 𝗦𝘁𝗿𝗮𝘁𝗲𝗴𝘆: More than 90% of the S&P 500 disclosed matters related to climate change or GHG emissions in the risk factors section of their most recent annual report. However, much more specific disclosure will be required under the final rule, including specific disclosures by type of climate risk (physical and transition). For material climate-related risks, required disclosures about the impact (actual or potential) of the risk to “strategy, business model, and outlook” include specific information on how they affect strategy, targets/goals, resources, etc. For LAFs, #DCPs related to these disclosures will need to be in place and tested by 1/1/25.  𝟮. 𝗖𝗹𝗶𝗺𝗮𝘁𝗲 𝗥𝗶𝘀𝗸 𝗠𝗮𝗻𝗮𝗴𝗲𝗺𝗲𝗻𝘁: A registrant is required to disclose its 𝗽𝗿𝗼𝗰𝗲𝘀𝘀𝗲𝘀 for “identifying, assessing and managing” material climate-related risks, including evaluating whether the risk has been incurred/likely to be incurred, response to the risk including whether it will address the material risk and whether the process is integrated into #ERM. Orgs should consider existing processes in place for purposes of #TCFD or #CDP disclosures, which are both designed to meet info needs of investors. Again, for LAFs, #DCPs related to these disclosures (including the process by which the materiality determination was made) will need to be in place and tested by 1/1/25. 𝟯. 𝗧𝗮𝗿𝗴𝗲𝘁𝘀 𝗮𝗻𝗱 𝗚𝗼𝗮𝗹𝘀: A registrant must disclose info on their publicly announced or 𝙞𝙣𝙩𝙚𝙧𝙣𝙖𝙡 climate-related targets or goals, if material. Required disclosures then include; scope of activities (e.g., Scopes 1,2,3 GHG emissions), how measured, time horizon, baseline, update on progress, etc. This is where disclosure of GHG emissions could be required well ahead of phase-in implementation dates for Scopes 1 & 2 GHG emissions, for example. Again, for LAFs, this means #DCPs related to these disclosures (potentially including Scopes 1,2,3 GHG emissions) will need to be in place and tested by 1/1/25. Additionally, the final rule requires disclosures about any voluntary assurance obtained (before required) if the GHG emissions disclosures are included in the SEC filing. The time to accelerate preparedness is now, #assurancereadiness can be an important tool. Please note the implementation considerations included in the Heads Up! #deloitteesgnow

After months of anticipation from the corporations mandated to disclose through California’s Climate Corporate Data Accountability Act (SB 253) and Climate-Related Financial Risk Act (SB 261), as well as the investors and consumers of this information, we have to get comfortable operating strategically in a dynamic landscape. In this ESG Today article I summarize the current status of the laws, following CARB's May public workshop. The takeaway is clear: deadlines are firm, reporting requirements are coming, and companies must prepare now. 🗓️The Clock is Ticking: Despite ongoing development of prescriptive reporting rules expected by year-end, core reporting requirements begin in 2026 for FY2025 data. Companies should already be deep in the stakeholder collaboration, data collection, and analysis required to meet reporting requirements. ✅"Good Faith Effort" Requires Concrete Action: While CARB is not enforcing compliance penalties for SB 253 in 2026, this allowance is only for companies that demonstrate good faith efforts to meet reporting requirements.  This means scope 1 & 2 emissions inventories must obtain limited assurance. 📈Beyond Compliance, It's Strategic Imperative: This isn't just about ticking boxes.  Market demand for climate disclosure is high, with investors increasingly incorporating climate considerations into their risk assessments and capital allocation decisions. Similar business advantages exist for companies to de-risk and decarbonize supply chains.  So what should companies do over the next 6 months ahead of reporting deadlines? Make "No-Regret" Decisions Today: The smartest move is to focus on foundational work that aligns with current requirements and global best practices. This includes: 📊Building audit-ready, GHG Protocol-aligned emissions inventories  🔐Preparing for assurance from day one with transparent documentation  💻Investing in robust data systems that can adapt ⚖️Incorporate climate into core governance, risk and resilience infrastructure The market is already demanding this level of transparency. California isn't backing down, and organizations that lead with proactive preparation will be the ones to thrive in this dynamic landscape. What proactive steps has your organization taken to navigate these non-negotiable deadlines? Let me know in the comments! 👇 https://lnkd.in/ekGhT_kq Workiva #climatedisclosure #climaterisk #GHGemissions