Square pegs in round holes – Storebrand Asset Management

Why corporate carbon emissions disclosure standards are not working as intended for investors.

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... Employing a perfectly good tool in a way that it was never intended to be used can be frustrating. It is a familiar feeling for investors in climate transition solutions, particularly those who are applying the new International Sustainability Standards Board (ISSB) sustainability disclosure standards, International Financial Reporting Standards (IFRS) S1 and IFRS S2. Recently, the ISSB launched its first-ever sustainability disclosure standards, IFRS S1 and IFRS S2, aiming to improve trust and confidence in company disclosures about sustainability to inform investment decisions.

However, climate datasets currently require keen scrutiny by investors. Climate risk is an evolving concept and the regulatory environment for companies and investors is changing rapidly. The data and regulations regarding corporate climate risk disclosures must also evolve and improve on this baseline, in order to avoid unintended consequences and remain useful and relevant.

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