Benefits of aligning with global climate disclosure standards

Climate Transition Planning 🌍 Climate transition planning is no longer a nice-to-have—it’s becoming a business necessity. With mounting regulatory requirements and investor expectations, companies must move beyond setting climate targets and demonstrate how they will achieve them through structured Climate Transition Plans (CTPs). CTPs are increasingly embedded in global regulations. The UK, Switzerland, Australia, Hong Kong, and Japan have mandated transition plan disclosures, and other regions are moving in the same direction. In the US, the SEC climate disclosure rule, although currently on hold, also includes transition planning for companies that have one. Many existing sustainability frameworks already incorporate CTP elements. The Task Force on Climate-related Financial Disclosures (TCFD) remains the foundational reference, influencing ISSB’s IFRS S2 standards, SEC climate disclosures, and country-specific regulations. The overlap between frameworks allows businesses to integrate CTPs into existing sustainability reports rather than treating them as standalone requirements. The UK’s Transition Plan Taskforce (TPT) and GFANZ provide structured guidance, while SBTi, CDP, and Climate Action 100+ offer tools to assess credibility and track progress. Beyond compliance, transition planning is a strategic advantage. Investors and financial institutions are embedding transition risk assessments into decision-making, and companies with robust, science-based transition plans are better positioned to access capital and strengthen partnerships. One of the biggest challenges remains financial planning. Only 5% of companies reporting to CDP in 2023 provided sufficient details on how they will fund their transition. Aligning sustainability strategies with CapEx, OpEx, and R&D budgets is essential to turn plans into real action. Businesses that act now will be ahead of regulatory shifts and well-positioned to mitigate transition risks. A strong climate transition plan isn’t just about reducing emissions—it’s about ensuring long-term resilience and competitiveness in a rapidly changing landscape. With regulations evolving across Europe, North America, and Asia-Pacific, the question isn’t whether companies should have a CTP, but rather how well-prepared they are to disclose and implement it. Source: @BSR #sustainability #sustainable #business #esg #climatechange #CTP #risks

What does ESG transparency mean for the future of business? Imagine: You're walking into a store, ready to make a purchase. You pick up two products, one with clear information about its environmental impact, how it's made, and whether it supports fair labor practices and one without. Which one would you choose? Now, Shift that decision-making to investors, customers, or even governments. They’re increasingly prioritizing companies that openly share their Environmental, Social, and Governance (ESG) efforts. Why? Because transparency builds trust, and trust drives long-term success. Here’s the challenge: ESG disclosures aren’t just nice-to-have anymore they’re becoming mandatory. Governments, regulatory bodies, and stock exchanges worldwide are implementing ESG compliance requirements. According to a recent report over 90% of global investors consider ESG factors when making decisions, and more than 75% of large companies now issue sustainability reports. These reports aren’t just data dumps; they’re stories. They tell us how a company is reducing carbon emissions, supporting its workforce, and making governance decisions that align with broader societal goals. Think of it as a window into how a business impacts the world and, just as importantly, how it manages the risks and opportunities tied to that impact. In my opinion, ESG transparency isn’t only about ticking boxes. It’s about accountability showing that businesses understand their role in shaping a sustainable future. Companies that approach ESG disclosures thoughtfully, with clear frameworks and genuine commitment, are more likely to win the trust of their stakeholders and thrive in an increasingly conscientious marketplace. For businesses navigating this complex landscape, it’s crucial to understand the most common ESG disclosure frameworks, like the Global Reporting Initiative (GRI) or the Sustainability Accounting Standards Board (SASB). These frameworks provide a structure, ensuring reports are not just thorough but also meaningful. The journey to ESG transparency might feel overwhelming at first, but it’s also an opportunity a chance to stand out by showcasing what you stand for. How does your organization approach transparency? Do you see it as a compliance exercise or a way to connect authentically with your audience?

🌍 Sustainability data is becoming infrastructure Sustainability data is no longer just about reporting, it’s becoming the backbone of how we price risk, allocate capital, and define value in the global economy. The pace of change in 2025 shows this shift is accelerating. 🔑 What’s driving it? EU CSRD/ESRS: Over 50,000 companies impacted; revisions underway but the core double materiality approach remains. ISSB S1 & S2: Rapid global adoption, setting a baseline for consistent, comparable reporting. California SB 253 & 261: Legal challenges failed; Scope 1–2 disclosures due 2026, Scope 3 by 2027. Australia: Mandatory climate reporting aligned with ISSB starting 2025. Brazil: CVM 193 brings IFRS-aligned disclosure, mandatory from 2026. India & China: BRSR Core and new CSDS standards push deeper into supply chains and carbon reporting. Nature & transition plans: The UK’s 2025 consultation on mandatory transition plans and the growing adoption of TNFD show that climate, nature, and resilience are converging. 🚨 Key challenges Assurance capacity, Scope 3 data quality, and policy uncertainty (like the paused SEC climate rule) remain hurdles. Yet global momentum is clear: transparency is being hardwired into financial systems. 🏢 Real estate signal: GRESB Reporting is raising the bar on verified energy, carbon, water, and waste data, pushing portfolios toward stronger governance and assurance. 💡 The takeaway: This isn’t just compliance. We’re witnessing the foundations of a smarter financial system that rewards resilience, transparency, and long-term value. Companies that prepare now with credible, standardized, assured data will be best positioned to thrive in the future. Let’s keep building! With rigor, ambition, and impact.

𝐄𝐒𝐆𝐢𝐧𝟑: 𝐆𝐮𝐢𝐝𝐚𝐧𝐜𝐞 𝐭𝐨 𝐞𝐧𝐡𝐚𝐧𝐜𝐞 𝐜𝐞𝐫𝐭𝐚𝐢𝐧𝐭𝐲 𝐢𝐧 𝐦𝐚𝐭𝐞𝐫𝐢𝐚𝐥 𝐬𝐮𝐬𝐭𝐚𝐢𝐧𝐚𝐛𝐢𝐥𝐢𝐭𝐲 𝐝𝐢𝐬𝐜𝐥𝐨𝐬𝐮𝐫𝐞 While some uncertainty may exist in the direction of climate-related disclosure regulation in the US, one certainty is that disclosure of material climate-related info 𝒊𝒔 𝒓𝒆𝒒𝒖𝒊𝒓𝒆𝒅 (reminder: 2010 SEC Interpretive Guidance on Disclosure Related to Business or Legal Developments Regarding Climate Change https://lnkd.in/eWfCErvn ) As companies navigate complex global sustainability standards & regs, while enhancing organizational resilience & market positioning amidst emerging risks, #ISSB standards can be a strategic tool to deepen understanding of sus-related risks & opps on an entity's prospects – its cash flows, access to finance, & cost of capital. The recently released ISSB materiality guidance (https://lnkd.in/eWYpb3TF) underscores the importance of disclosing financially material climate-related risks. >30 jurisdictions are moving to adopt ISSB, recognizing the importance of certainty, standardization & reliability in sustainability disclosure – which provide transparency into evolving risks & opps to business – as critical to trust & confidence in markets. This guidance can strengthen existing materiality assessment practices & serve as a risk protection tool, increasing senior mgmt & board confidence that all material risks & opps are considered in strategy, operations, & market disclosures. Investors emphasize the need for timely, decision-useful & material sustainability disclosure b/c “..orgs that effectively anticipate & manage material sustainability-related factors & other long-term strategic issues are more likely to endure, & create greater value over the long term, than those that do not.” Key themes: 📌𝐃𝐞𝐟𝐢𝐧𝐢𝐧𝐠 𝐦𝐚𝐭𝐞𝐫𝐢𝐚𝐥 𝐢𝐧𝐟𝐨: "Information is material if omitting, misstating or obscuring that information could reasonably be expected to influence decisions of primary users..." (p. 4) 💡𝐒𝐮𝐬𝐭𝐚𝐢𝐧𝐚𝐛𝐢𝐥𝐢𝐭𝐲-𝐫𝐞𝐥𝐚𝐭𝐞𝐝 𝐫𝐢𝐬𝐤𝐬 & 𝐨𝐩𝐩𝐬: "The effects on an entity’s cash flows, access to finance & cost of capital are assessed over the short, medium & long term to evaluate the potential implications of sustainability-related risks & opportunities for an entity." (p.28) 🏁𝐈𝐝𝐞𝐧𝐭𝐢𝐟𝐲𝐢𝐧𝐠 & 𝐝𝐢𝐬𝐜𝐥𝐨𝐬𝐢𝐧𝐠 𝐦𝐚𝐭𝐞𝐫𝐢𝐚𝐥 𝐢𝐧𝐟𝐨 & 𝐢𝐧𝐭𝐞𝐫𝐚𝐜𝐭𝐢𝐨𝐧 𝐰/ 𝐨𝐭𝐡𝐞𝐫 𝐬𝐭𝐝𝐬/𝐫𝐞𝐠𝐬: The guidance outlines a 4-step process for identifying & disclosing material info & acknowledges: “…local laws & regulations might specify requirements that affect what information an entity provides in its sustainability-related financial disclosures..." (p.61) The time to act is now, & the ISSB's materiality guidance provides a clear roadmap for doing so.  🔎For more info on materiality: https://lnkd.in/erRGkUPZ #deloitteesgnow

Yesterday, the U.S. Securities and Exchange Commission (SEC) published its Final Rule, “The Enhancement and Standardization of Climate-Related Disclosures.” We welcome the Final Rule's provision of a framework for climate-related financial disclosures closely tied to financial statements. This information, encompassing governance, strategy, risk management, targets, and GHG emission data, empowers investors to allocate capital effectively, safeguarding against the build up of climate-related systemic financial risks and promoting transparency and comparability in global markets. It is encouraging to see the U.S. join peer regulators around the world, making climate-related financial disclosures mandatory to support greater transparency and accountability across markets and jurisdictions. WBCSD – World Business Council for Sustainable Development supports the global harmonization of climate-related financial disclosures to drive transparency, accountability, and performance in markets worldwide. A globally consistent approach to climate-related financial disclosures is needed to provide investors with consistent, comparable, and decision-useful risk disclosures. This will also reduce companies' compliance costs and complexity. We commend the SEC for adopting this ruling, which will contribute to a global baseline of climate risk disclosure, help maintain U.S. leadership, and keep U.S. companies competitive in global markets.  However, since a company’s supply chain can account for as much as 90% of its indirect greenhouse gas emissions, we are disappointed that Scope 3 emissions disclosure is not in the final rule. We also regret that the ruling does not require companies to use internationally comparable climate scenario frameworks to inform their management of climate risk. We look forward to future developments of the SEC’s rulings on climate-related disclosures to support greater alignment with California’s climate disclosure laws, and with global frameworks such as the International Sustainability Standards Board (ISSB) S2 Standard for Climate-Related Financial Disclosures, the European Union Corporate Sustainability Reporting Directive (CSRD) reporting framework set out in the European Sustainability Reporting Standards (ESRS), and the disclosures aligned with the widely-accepted Taskforce on Climate-Related Financial Disclosures (TCFD).