ThinkTWENTY20

A recent study by KPMG of ESG reporting by the 250 largest companies in the world (G250), provided some insight into their adherence with accepted criteria in their reporting. It used quality criteria based on “the insights of climate disclosure experts at KPMG firms, combined with key elements of the Task Force on Climate-related Financial Disclosures (TCFD) recommendations, other reporting frameworks and evolving best practice.”

The criteria and the percentage of companies following them are:

• - Reporting confirms that the company has assigned board responsibility for overseeing the company’s response to climate change 44% of the companies.
• - The Chair or CEO’s message in the annual financial or integrated report mentions climate change and/or climate-related risks 33% C 
• - Reporting clearly acknowledges climate change as a financial risk to the company 56% 
• - The annual financial or integrated report should contain a specific section on climate risk and/or the company publishes a stand-alone climate risk/TCFD report 31% 
• - Reporting covers both the physical and transitional risks the company faces from climate change and net zero transition 47% 
• - Reporting includes scenario analysis of climate-related risks 22%
• - Reporting includes risk analysis in line with a) two or more global warming 12% (a) 
• scenarios and b) with a clear timeline 17% (b) D 
• - Scenario analysis is aligned with recognized climate scenarios developed by reputable sources 19% 
• - Reporting states the company’s ambition to achieve net zero carbon emissions at or before 2050 OR explains another target 46% 
• - Reporting clearly describes the company’s strategy to achieve its carbon reduction targets 17% 
• - Reporting clearly communicates whether the company is on track to meet its carbon reduction targets 24% 
• - Reporting communicates that the company uses an internal carbon price or ‘shadow price’ 11%
• The report on the study can be found at https://assets.kpmg/content/dam/kpmg/xx/pdf/2020/11/towards-net-zero.pdf