CDP has declared its intention to harmonise its sustainability reporting practices with the ISSB’s novel climate disclosure norms starting from 2024.
This initiative, aimed at simplifying the reporting process for enterprises and advocating wider reporting on crucial environmental matters, marks a pivotal phase in the universal approach to climate risk assessment and disclosure.
CDP, known for steering a comprehensive global environmental disclosure mechanism, plays a crucial role in assisting investors and varied stakeholders in evaluating and monitoring companies’ environmental stewardship. This encompasses vital sectors such as climate change, deforestation, and water security. Annually, CDP appraises corporations and releases scores that are subsequently utilised by information service providers like Bloomberg and MSCI to influence investment research and decisions.
The ISSB, introduced at the COP26 climate summit in 2021, has an ambitious agenda to forge IFRS Sustainability Disclosure Standards, satisfying the growing appetite for a globally coherent disclosure methodology among investors, corporations, and regulatory bodies. This move is anticipated to profoundly impact forthcoming disclosure protocols worldwide.
ISSB Chair Emmanuel Faber acknowledged the development, stating, “CDP’s work towards alignment with the IFRS S2 is incredibly welcome and timely, as it will further ease the reporting burden for thousands of companies, moving us one step closer to a common language for disclosures, while improving the consistency of climate-related information for investors and accelerating their access to this data.”
Furthermore, CDP disclosed its strategy to incorporate more sustainability reporting standards in its framework. This includes adapting its surveys to encompass the upcoming Taskforce on Nature-related Financial Disclosures (TNFD) guidelines and other significant global sustainability disclosure criteria.
The announcement coincides with a report from CDP that highlights an unprecedented number of companies proactively disclosing essential environmental data. In 2023 alone, over 23,000 companies engaged with CDP, an uptick of 24% from the previous year, representing a combined market capitalisation of $67 trillion.
Echoing the importance of this trend, CDP Chief Executive Officer Sherry Madera remarked, “With over 23,000 businesses disclosing through CDP this year, it is clear that sustainability – and the data that underpins it – is not a ‘nice to have’, but an essential part of long-term success in the business community that is showing no sign of slowing down – nor should it.”
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