CDSB has reviewed the 2019 environmental and climate-related disclosures of Europe’s 50 largest listed companies, with a combined market capitalisation of US$4.3 trillion, under the EU Non-Financial Reporting Directive (NFRD, also referred to as ‘the Directive’). The purpose of this report is to inform policymakers of the changes needed to improve environmental disclosures under the Directive, and to ensure it meets its purpose of increasing the relevance, consistency and comparability of company reporting. It also aims to support corporate report preparers in enhancing their disclosures under the Directive by identifying good practice case studies and tips, drawn from the findings of CDSB’s review.

Supported by the LIFE Programme of the European Union, the review consisted of a question set developed by CDSB to assess the strengths and weaknesses of companies’ disclosures. This was based on consideration of the core ‘content categories’ of the NFRD (i.e. business model, policies and due diligence, outcomes, principal risks and key performance indicators), and reviewing progress in implementing the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). Mainstream reports (i.e. annual report and accounts) were reviewed, alongside information disclosed elsewhere where it was clearly referenced from the mainstream disclosure.

The review finds that whilst the majority of the top 50 companies are providing disclosures aligned with the NFRD’s core content categories, disclosures continue to lack the quality, consistency and comparability intended by the Directive. It concludes with recommendations for corporate report preparers, and policymakers and regulators.

Read more: https://www.cdsb.net/falling-short