The IFRS Foundation has published its 2024 progress report on corporate climate-related disclosures. The 2024 report looks at progress by companies globally in making climate-related disclosures, under both the TCFD framework and through early take-up of the IFRS Sustainability Disclosure Standards issued by the International Sustainability Standards Board. The report slices and dices the data in different ways, enabling companies to benchmark their climate-related disclosures against other companies globally and in their region and industry.
The report reflects progress made since the publication of the 2023 status report by the Financial Stability Board's Task Force on Climate-related Financial Disclosures. The 2023 report was the sixth and final status report by the FSB before it disbanded, following the issuance by the ISSB of its two inaugural Standards.
In this post, in addition to discussing global trends, we look specifically at climate reporting progress by U.S. companies. This is particularly relevant as a large number of U.S.-organized companies gear up for compliance with California's Climate‐Related Financial Risk Act. Under the Act, covered entities must, by January 1, 2026, publish their first climate-related financial risk report. That report must disclose climate-related financial risk in accordance with the TCFD framework or an equivalent reporting requirement, which includes the ISSB Standards.
The Act provides that, if a covered entity does not complete a report consistent with all required disclosures of the applicable framework or standard, it must provide the recommended disclosures to the best of its ability, provide a detailed explanation for any reporting gaps and describe the steps it will take to prepare complete disclosures.
The Climate‐Related Financial Risk Act is discussed in more detail in our earlier post here.
Global stats
Globally, the 2024 report took into account a sample of 3,814 public companies.
In fiscal 2023, 82% of the companies disclosed information in line with at least one of the 11 TCFD recommended disclosures, up from 73% in 2022. Forty-four percent of companies disclosed in line with at least five of the recommended disclosures, up from 38% in 2022. Approximately 2% to 3% of companies reported in line with all 11 TCFD recommended disclosures.
The average number of recommended disclosures made per company was 5.2 in 2023, up from 5.1 in 2022. Insurance (5.5) and energy (5.4) companies disclosed more information aligned with the TCFD recommendations than companies in other industries. Consumer goods companies had the lowest number of recommended disclosures, at 3.6.
Companies based in Europe had the highest reporting rates for the 11 recommended disclosures, with an average of 6.4. Companies with a market capitalization of at least $3.2 billion were more likely to disclose TCFD-aligned information than those with a market capitalization below that threshold.
In fiscal 2023, the most frequently disclosed recommended disclosure was about greenhouse gas emissions, made by 63% of the companies reviewed. In addition, more than 50% of the companies reported on climate-related metrics and targets. The percentage of companies reporting on governance, specifically, board oversight of climate-related disclosures, was also more than 50%. The least disclosed recommended disclosure for both 2022 and 2023 was the resilience of companies' strategies under different climate-related scenarios, with 11% of companies disclosing this information in 2023, compared to 9% in 2022. A small percentage of companies – 18% – discussed how the processes for identifying, assessing and managing climate-related risks are integrated into their overall risk management, up from 16% in fiscal year 2022. The largest increase in TCFD reporting was for companies reporting on their greenhouse gas emissions and climate-related metrics, at ten and eight percentage points, respectively.
The report indicates that many companies are making the transition from disclosures prepared using the TCFD recommendations to disclosures prepared using the ISSB Standards, which were issued in June 2023. According to the progress report, between October 2023 and March 2024, more than 1,000 companies referenced the ISSB in their reports.
The IFRS Foundation also surveyed asset managers and asset owners in connection with the report. The report indicates that those who responded to survey questions about the ISSB Standards (55 respondents) overwhelmingly want or expect portfolio companies to make the transition from disclosures prepared using the TCFD recommendations to disclosures prepared using ISSB Standards. These respondents cited the integration of the TCFD recommendations into ISSB Standards, the comparability of information provided in accordance with ISSB Standards and increasing jurisdictional adoption of ISSB Standards as the primary reasons in support of the transition.
North American and U.S. stats
A total of 1,111 North American companies reported in fiscal 2023. Most of these companies were headquartered in the United States (946). Therefore, the North American statistics in the report primarily reflect U.S. company practice.
The average number of TCFD-recommended disclosures by North America companies was 4.1. This was second place after European companies (at 6.4), although North American companies lagged significantly behind those in Europe.
Energy companies reported on average in line with 6.0 of the 11 recommended disclosures, which was the highest. Insurance companies were next, with an average of 4.7 of the 11 recommended disclosures. Technology and media companies (3.4), consumer goods companies (3.3) and banks (2.8) reported less climate-related information than companies in the other reviewed industries.
The highest rates of reporting by companies in the energy, insurance, transportation and agriculture, food and forest products industries were on board oversight of climate-related issues. In five of the eight reviewed industries, more than 50% of the companies reported on climate-related risks and opportunities. In six of the eight industries, close to or more than 50% of the reviewed companies reported on GHG emissions. For all eight industries, the lowest rates of reporting were on the resilience of strategy under different climate-related scenarios (8% overall). The comparison of reporting by companies in North America for fiscal 2022 and 2023 shows generally consistent levels of TCFD-aligned disclosures.
The fiscal 2023 North American average for each recommended TCFD disclosure is below:
| Governance | Board oversight |
59% |
| Management's role |
38% |
|
| Strategy | Risks and opportunities |
53% |
| Impacts of risks and opportunities on company |
31% |
|
| Resilience of strategy |
8% |
|
| Risk management | Risk identification and assessment process |
25% |
| Risk management processes |
29% |
|
| Integration into overall risk management |
20% |
|
| Metrics and targets | Climate-related metrics |
42% |
| GHG emissions |
52% |
|
| Climate-related targets |
49% |
In North America, 186 companies referenced the ISSB Standards. The majority of these companies – 107 – were Canadian. The remainder were in the United States. Of the 186 companies that referenced the ISSB in North America, 60% provided a general reference and 40% mentioned the ISSB in the context of their current or future alignment of reporting with the sustainability-related disclosure requirements in ISSB Standards. Well in excess of the majority of the U.S. companies that referenced the ISSB provided a general reference (77%).
To access the report
The 2024 report is available here. The report provides a more granular breakdown of North American data by industry and each individual recommended disclosure. It also provides this data for other regions.
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