Progress on Corporate Climate-Related Disclosures – 2024 report available here.
The 2024 Progress on Corporate Climate-Related Disclosures Report tracks how companies are adapting to new sustainability reporting standards. It highlights the shift from Task Force on Climate-related Financial Disclosures (TCFD) recommendations to International Sustainability Standards Board (ISSB) Standards, which aim to create a more standardized and globally applicable framework for climate-related financial disclosures. The report, compiled by the IFRS Foundation, presents data from thousands of companies worldwide and evaluates how well businesses and regulators are integrating climate-related financial reporting into their decision-making.
Why Climate-Related Financial Disclosures Matter
Investors, regulators, and businesses are increasingly concerned about the financial risks posed by climate change. Extreme weather, shifting energy policies, and the transition to a low-carbon economy all affect companies’ financial stability. This is why climate-related disclosures are crucial—they provide transparency on how businesses assess and manage climate risks.
Previously, many companies followed the TCFD recommendations, which provided a structured approach to climate reporting. However, the ISSB has now introduced two new standards (IFRS S1 and IFRS S2) that build on the TCFD framework, ensuring more comprehensive and globally consistent disclosures. This report examines how companies are transitioning to these new standards and whether jurisdictions are implementing them into their regulatory frameworks.
1. The Shift from TCFD to ISSB Standards
TCFD’s Legacy and ISSB’s Role The Task Force on Climate-related Financial Disclosures (TCFD) was established to help companies assess, disclose, and manage climate risks. In 2023, the TCFD disbanded, as its work was integrated into the ISSB Standards (specifically IFRS S1 and IFRS S2). ISSB Standards are now the global benchmark for sustainability-related financial reporting, ensuring that climate disclosures align with investor expectations and financial decision-making.
2. Adoption of ISSB Standards
Over 30 jurisdictions (representing 57% of global GDP) are in the process of integrating ISSB Standards into their legal or regulatory frameworks.
More than 1,000 companies referenced ISSB Standards in their reporting between October 2023 and March 2024. The European Union (EU) and United States (SEC) have introduced their own disclosure regulations, which aim to align with ISSB frameworks.
As this report describes, companies continue to make progress in their climate-related disclosures and are preparing to make the transition from disclosures prepared using the TCFD recommendations to disclosures prepared using ISSB Standards.
Erkki Liikanen – Chair of the Trustees of the IFRS Foundation
This transition reflects a major global push toward making sustainability reporting as standard as financial reporting.
How Well Are Companies Adapting?
Current State of Climate-Related Disclosures
In 2023, 82% of companies disclosed information in line with at least one of the 11 TCFD recommendations.
However, only 2–3% of companies fully reported on all 11 recommendations, highlighting the gap between partial and comprehensive reporting.
The most common disclosures include greenhouse gas (GHG) emissions and climate-related risk metrics, while the least reported were scenario analysis (assessing how different climate futures might impact business strategy).
2. The Need for Better Climate Scenario Analysis
A key weak spot in current reporting is the lack of scenario analysis, where companies evaluate how different climate policies or temperature rises could impact their business. Many companies find scenario modeling complex and uncertain, making it one of the least disclosed elements of climate reporting.
3. Connecting Climate Data with Financial Statements
Many companies disclose sustainability information separately from their financial statements, making it harder for investors to integrate this data into financial decision-making.
ISSB Standards require companies to integrate climate disclosures directly into financial reports, but adoption remains slow. 4. Assurance and Data Quality
There is a growing demand for independent assurance (audit) of climate disclosures, similar to financial audits.
The quality of climate-related disclosures varies significantly, and many companies still lack robust reporting mechanisms. Why This Report Matters for Businesses and Policymakers This report provides a snapshot of how the corporate world is handling climate-related financial disclosures. Its findings highlight:
The shift from voluntary to mandatory sustainability reporting.
The importance of aligning global reporting standards to reduce regulatory confusion. The growing role of investors in pushing for high-quality climate disclosures. For businesses, this means that climate-related disclosures are no longer optional—they are becoming an integral part of financial decision-making. Companies that fail to adapt and align with ISSB Standards may face regulatory risks, investor pressure, and reputational damage. For policymakers, the challenge is to harmonize regulations while ensuring that climate disclosures remain decision-useful for investors and stakeholders. Final Thoughts: The Future of Climate Reporting Climate-related financial reporting is evolving rapidly. The integration of TCFD recommendations into ISSB Standards represents a major step toward global consistency. However, companies still face challenges in implementation, especially regarding scenario analysis, financial statement integration, and regulatory alignment. The widespread adoption of ISSB Standards will ultimately determine how effective climate disclosures are in shaping corporate behavior and investment decisions. As more jurisdictions make these disclosures mandatory, businesses must adapt quickly or risk falling behind. The next few years will be crucial in determining whether climate disclosures can truly drive the transition to a sustainable economy—or whether they will remain just another compliance exercise.
