Less than half of companies produce climate-related disclosures that include decision-useful information, according to a Manifest Climate report.
The climate risk-planning solution collected data from public filings of more than 3,000 companies in 65 countries and looks at how closely it aligns to the recommendations of the TCFD.
The report finds that despite more companies producing climate-related disclosures, most companies are yet to include decision-useful information, with only 66 percent of surveyed companies disclosing some TCFD-aligned information.
Notably, TCFD-aligned disclosure varied depending on sectors when looking at alignment with at least one TCFD recommendation. In this instance, the report shows that 96 percent of utilities’ disclosures recorded between 2018 and 2021 include TCFD alignment with at least one recommendation.
Changes in sectors
Manifest Climate also reports that 72 percent of banks’ disclosures, 16 percent of pharmaceuticals companies’ disclosures and 29 percent of mining companies’ disclosures feature TCFD alignment with at least one recommendation.
Meanwhile, during the 2018–2021 time frame, 43 percent of companies produced disclosures that feature at least one of the TCFD Strategy recommendations, yet only 12 percent include information aligned with the TCFD Governance recommendations.
However, none of the organizations met all the necessary requirements for disclosures to be decision-useful across the TCFD recommendations while decision-useful information on metrics and targets was present in 41 percent of financial services organizations’ disclosures.
‘Climate risk disclosure is now an expected part of every company’s financial statement so it’s vital IR professionals are prepared to meet the growing investor appetite for this information,’ says Laura Zizzo, chief executive and co-founder of Manifest Climate.
‘The Disclosure Benchmark Review can be used by IR teams to get a snapshot of which industries are most aligned to TCFD disclosure and also to understand how to make disclosure decision-useful for investors.’
‘The Disclosure Benchmark Review is created from the Manifest Climate SaaS platform which provides this type of data in real time, allowing IR teams to benchmark performance against others, learn from best practice, and access advice on the latest developments in climate disclosure,’ Zizzo adds.