Three major sustainability disclosure proposals were released in March and April 2022. They come at a pivotal time in corporate disclosure.

The Evolution of Sustainability Disclosure was developed in partnership with leading carbon management and accounting platform Persefoni. It profiles these three proposals, focusing on the components related to climate-related risk and opportunity disclosure and the use of TCFD guidance. Their alignment with TCFD and each other will be important in developing consistency across reporting requirements and has the potential to impact the overall quality of climate related data, ultimately resulting in improved insights and outcomes.

Key takeaways include:

  • The evolving guidance from the SEC, EFRAG, and IFRS builds on 20+ years of continuous improvement in the field: Engagements among global ESG, sustainability, and climate change experts and organizations continue to refine, focus, and improve the disclosure landscape for ESG-related information, especially quantifiable GHG data and climate change-related risks.
  • Companies should focus on the Task Force on Climate-Related Financial Disclosures (TCFD) framework to guide current reporting: TCFD provides a framework for companies to use to help them to evaluate their climate-related financial risks and opportunities that applies across industries, geographies, and types of organizations.
  • More companies will disclose emissions (Scope 1, 2, and 3): This will increase the amount of available data and facilitate reporting over time. As more companies report their Scope 1 and 2 emissions data, Scope 3 reporting will become easier and more reliable.
  • Commenting on the proposals: Each of the proposals is currently undergoing public consultation. The deadlines for submission of comments are as follows:
    • SEC: Comments are due June 17, 2022
    • ISSB: Comments are due July 29, 2022
    • EFRAG: Comments on ESRS are due by August 8, 2022

ERM and Persefoni encourage corporate issuers, investors, and other stakeholders to participate in the public consultation process for these proposals to help drive momentum towards a consistent global reporting baseline.

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