ESG round-up: TCFD among top 10 corporate reporting issues, says UK FRC

The UK Financial Reporting Council (FRC) has flagged that TCFD and climate-related narrative reporting had moved into its top 10 reporting-related issues raised with companies for 2023/24. In its annual review of corporate reporting, the FRC said that climate-related issues had doubled to 4 percent of cases opened. Key issues included companies that did not produce a TCFD report despite being in scope of mandatory reporting rules or provided unclear disclosures. The FRC said it had challenged companies “over the level of prominence given to green initiatives in the strategic report with relatively little discussion of core activities that generated the majority of the company’s carbon emissions”.

The Science Based Targets Network (SBTN) has published a report detailing the outcomes of a pilot it conducted earlier this year with 17 corporates. Conducted from May 2023 to June 2024, the programme tasked the firms – which included Holcim, Kering, GSK and Nestlé – with preparing and submitting freshwater and land targets for validation in alignment with SBTN’s 2023 versions of the methods. According to the report, 10 of the companies passed validation of one or more freshwater targets, while seven passed validation of all required land targets. SBTN said companies intending to publicly disclose their approved targets have until 10 January, 2025 to do so.

Nearly 30 percent of New Zealand stewardship code signatories have increased their resourcing, with nearly half saying they expect to boost their stewardship capacities in the next year. Around 50 percent of respondents to a signatory survey said that insufficient stewardship resourcing and capability were barriers to the growth of stewardship in the region. The code – which was launched two years ago and has 20 signatories – has also seen 65 percent of signatories strengthen their company engagement process, and more than half of signatories reinforce their internal stewardship policies. The most common barriers to reporting stewardship activities were too many competing reporting requirements, too much time to complete reports, and data quality problems.

The Australian Sustainable Finance Institute (ASFI) has published its fourth assessment of the implementation of the country’s sustainable finance roadmap, which was released in 2020. The score for this year across all 37 roadmap recommendations was a 2.8 out of 5.0 average, a slight increase from 2023. Areas of strong progress included the government’s commitment to sustainable finance through projects including the taxonomy, mandatory climate-related financial disclosures, and the issuance of Australia’s first sovereign green bond.

The report said that the country’s financial (ASIC), banking (APRA) and competition (ACCC) regulators could be further encouraged to support sustainability outcomes by embedding their focus on greenwashing and systemic climate risk into their mandates. Areas of limited progress included the extent to which environmental and social externalities are valued and embedded by financial institutions. ASFI also flagged the lack of progress on an industry-wide stewardship code.