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- 19 out of 24 FSB member jurisdictions have climate-related disclosure regulations or guidelines in place, influenced by the ISSB.
- 17 jurisdictions have set or proposed disclosure requirements aligned with ISSB Standards and TCFD recommendations.
- The report urges continued support for SMEs and emerging markets facing challenges in adopting ISSB standards.
The Financial Stability Board (FSB) has released its 2024 progress report on climate-related financial disclosures, underscoring the strides made by global jurisdictions in implementing International Sustainability Standards Board (ISSB) disclosure standards. This report draws insights from a survey involving FSB member jurisdictions and input from key standard-setting bodies and international organizations.
Current Progress:
The report highlights that 19 of the 24 FSB member jurisdictions now have regulations, strategic roadmaps, or guidelines tailored for climate-related disclosures. Additionally, 17 jurisdictions have introduced or are working towards disclosure requirements aligned with ISSB standards and the Task Force on Climate-related Disclosures (TCFD) recommendations.
82% of global companies disclosed information aligned with at least one TCFD recommendation, but only a fraction (under 3%) met all 11 recommendations. This shortfall suggests that vital information on climate-related governance, strategy, risk management, and metrics remains undisclosed, hindering investors’ ability to evaluate climate risks and opportunities.
Emmanuel Faber, Chair of ISSB, noted:
“This progress report underscores the significant and encouraging progress in disclosure of climate-related information. But further action is needed to address the fact investors are still not receiving the information they need to assess and price appropriately climate and other sustainability-related risks and opportunities.”
Related Article: Canada To Set Mandatory Climate Disclosure Criteria for Large Private Companies
Supporting Implementation:
Global efforts now focus on supporting jurisdictions as they adopt and integrate the ISSB standards released in 2023. The FSB notes that various organizations, including the ISSB, are actively working to provide capacity-building initiatives and implementation support, particularly for small- and medium-sized enterprises (SMEs) and companies in emerging market and developing economies (EMDEs).
Faber emphasized: “The introduction of sustainability-related disclosure requirements into regulatory frameworks through the adoption or other use of ISSB Standards, building on the strong foundations laid through the TCFD recommendations and progressing towards a more comprehensive and assurable set of requirements, is of vital importance for the healthy functioning of capital markets around the world.”
Challenges and Assurance Efforts:
The report calls for more targeted work to ease the adoption of these standards by SMEs and EMDEs, acknowledging unique hurdles faced by these groups. Furthermore, several jurisdictions are making strides to incorporate assurance requirements aimed at enhancing the reliability and value of climate-related disclosures.
A summary within the report also references the findings from the International Financial Reporting Standards (IFRS) Foundation’s Progress Report on Corporate Climate-related Disclosures.
The IFRS Foundation’s conclusion is clear: “Companies’ progress in disclosing climate-related financial information using the TCFD recommendations or the ISSB Standards is encouraging, but more progress is necessary.”
This coordinated push reflects significant advances in aligning sustainability disclosure frameworks and integrating financial and prudential reporting requirements globally.