IFRS Report Highlights Leaders and Laggards in Climate Transparency

New Report Reveals Progress and Shortcomings in Corporate Climate Disclosures Worldwide

IFRS Foundation report highlights climate disclosure progress across industries

• IFRS Foundation evaluates global climate-related financial disclosures.

• Findings reveal regional and sector differences in reporting.

• Identifies top performers and areas needing improvement in climate transparency.

The IFRS Foundation recently published a report assessing the current state of corporate climate-related disclosures worldwide. This report provides a detailed analysis of how companies in various regions and sectors are progressing in their transparency regarding climate risks, opportunities, and impact mitigation strategies. Using a diverse global sample, the report benchmarks the level of disclosure against established standards, offering insights into trends and gaps across industries.

These findings are significant as climate-related disclosures enable investors and stakeholders to gauge a company’s resilience to climate-related challenges. Enhanced transparency provides a foundation for informed investment decisions and helps align corporate actions with global climate goals. Effective disclosures also support regulatory efforts in addressing climate impacts, as standardized reporting allows for clearer assessment and accountability in corporate climate actions.

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Technical Focus

The IFRS Foundation's report assesses adherence to its two climate-related disclosure standards, IFRS S1 and IFRS S2, developed to harmonize global reporting practices. IFRS S1 sets out requirements for general sustainability disclosures, while IFRS S2 specifically focuses on climate-related financial metrics, such as risk exposure and greenhouse gas emissions. Together, these standards aim to provide a consistent framework, ensuring comparability and clarity for investors assessing companies’ climate strategies.

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The report notes substantial climate disclosure advancements in sectors such as energy and manufacturing, where companies have started aligning closely with IFRS standards. However, industries like retail and consumer goods show slower adoption. The report also finds that Europe and North America lead in climate disclosure practices, whereas other regions are encouraged to strengthen their climate reporting to meet global benchmarks.

Emmanuel Faber, Chair of the IFRS Foundation, emphasized the importance of reliable climate-related disclosures, stating, “Comprehensive climate disclosure is critical to managing the financial risks of climate change and supporting a resilient, sustainable economy.” Faber encouraged further global alignment on climate reporting standards to close gaps and enhance comparability.

Through this report, the IFRS Foundation aims to inspire broader adoption of its climate disclosure standards, emphasizing that transparent reporting benefits investors and supports regulatory efforts. By building on these insights, companies worldwide can improve their climate disclosures and contribute to more sustainable financial practices and responsible climate action.