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EC expert group issues report on disclosure of climate-related information

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10 Jan 2019

The Technical Expert Group on Sustainable Finance set up by the European Commission (EC) has published its first report on companies' disclosure of climate-related information. It contains recommendations that will allow the EC to update its non-binding guidelines on non-financial reporting with specific reference to climate-related information, in line with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) established by the Financial Stability Board.

The report marks another step in the implementation of the EC's action plan on sustainable finance published in March 2018 and follows up on the EC's legislative proposal on the disclosure of climate-related information presented in May 2018.

The report contains proposals for disclosing not just how climate change might influence the performance of a company, but also the impact of the company itself on climate change.

The guidance proposed in the report intends to assist companies in developing high quality climate-related disclosures that comply with the Non-Financial Reporting Directive and address the recommendations of the TCFD. Specific disclosures and guidance are described under each element of the Non-Financial Reporting Directive requirements, including metrics for all in-scope companies, for non-financial companies, and for banks and insurance companies. In doing so, the report distinguishes between three types of disclosure:

  • Type 1 disclosures – those that companies should disclose (high expectation that all reporting companies disclose them)
  • Type 2 disclosures – those that companies should consider disclosing (expected of companies with significant exposure to climate-related risks and opportunities)
  • Type 3 disclosures – those that companies may consider disclosing (additional or innovative disclosures that provide more enhanced information)

The EC will take the report into consideration when it updates the non-binding guidelines on non-financial disclosure that accompany the Non-Financial Reporting Directive.

Stakeholders are invited to provide with written comments on the report by 1 February 2019.

Please click to access the Report on Climate-related Disclosures on the EC website.

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