New research reveals only a third of leadership statements address climate change



Share

Less than half of FTSE 100 Chairmen or Chief Executives address climate change in the leadership statements of their latest annual report, despite the systemic impacts of climate change looming on the horizon. Black Sun’s upcoming TCFD research report shows a significant increase in companies referencing the TCFD but gaps remain between commitments and relevant and meaningful disclosures.

Our second TCFD research report in Black Sun’s Horizon Series finds that 67% of FTSE 100 companies reference the Task Force on Climate-related Financial Disclosures (TCFD) in their reporting, although an increase from 39% last year, still few companies are meeting all 11 disclosure recommendations.

This is against the backdrop of TCFD supporters passing the 1,000 mark, Larry Fink’s announcement that Blackrock will push companies to make TCFD aligned disclosures, the FRC’s upcoming review of climate disclosures, the Investment Association calling for listed firms to report on climate risks and FCA’s proposal to require premium listed companies disclose on a comply or explain basis from 1 January 2021.

Although companies will be affected differently by climate-related challenges, what will remain the same is the high level of expectation from investors and other stakeholders around the reporting of climate-related issues

According to Sallie Pilot, Director of Insight and Engagement at Black Sun, “We are facing tremendous challenges – socially, environmentally and economically, and amidst a terrible situation we need to use it as an opportunity to drive change. As Mark Carney recently commented ‘we have a situation with climate change which will involve every country in the world and from which we can’t self-isolate.’ Climate-related reporting is important for helping companies prepare for the future, specifically in assessing their long-term viability and integrating climate-related issues into their decision-making processes.

One of the key goals of the TCFD is to elevate climate-related issues to board level, and although it focuses on climate, we believe that approaching disclosure in line with recommendations should be extended to other material sustainability-related issues. This will help companies differentiate themselves in the eyes of investors and wider stakeholders and manage their business for resilience.”

Other findings from the report include:

  • Challenges remain in embedding into strategy – 46% (from 32%) of FTSE 100 companies disclose climate issues among principal risks, but only 7% discuss the resilience of their strategy.

  • Greater integration into risk required - 48% (from 26%) disclose board oversight of climate-related risks and opportunities, while only 26% discuss how climate risks are integrated into overall risk management.

  • Significant increase in companies setting ambitious targets to reduce emissions, with 46% of companies setting net zero or science based targets (from 25%) but few discuss how prepared they are for a zero carbon economy.

  • Only 29% report on both climate-related risks and opportunities as per the TCFD recommendations – and then additionally 17% report on risks only.

The research report outlines the status of the TCFD reporting around the five thematic areas – Leadership, Governance, Strategy, Risk Management and Performance Metrics and Targets – drilling down further to the 11 recommendations. 

Request a copy here


About Black Sun

Black Sun is a global group of strategic advisors, consultants and stakeholder engagement specialists. We help global brands transform their stakeholder relations, fuel innovation, and drive more sustainable business practices.

We partner with visionary companies to define and communicate their purpose, strategy, performance and culture and to bring to life their value creation story. Our services and solutions directly address the business-critical concerns of today;  best-practice disclosure and reporting; effective communication of their long-term sustainability story; building trust and deepening engagement through digital communications.

 

Want to learn more about how we can help spark positive engagement?






Get in touch

Our use of cookies

We use necessary cookies to make our site work. We’d also like to set optional analytics cookies to help us improve it. We won’t set optional cookies unless you enable them. Using this tool will set a cookie on your device to remember your preferences.

For more detailed information about the cookies we use, see our Cookie policy


Analytics cookies

We’d like to set Google Analytics cookies to help us to improve our website by collecting and reporting information on how you use it. The cookies collect information in a way that does not directly identify anyone.

For more detailed information about the cookies we use, see our Cookie policy

: