February 27, 2020
CDSB and CDP release handbook to meet challenges of environmental and climate reporting across the EU

The EU Green Deal aims to increase environmental and climate disclosure; the Climate Disclosure Standards Board (CDSB) and CDP have released an environmental reporting handbook to help companies make sure their disclosure is in line with the Non-Financial Reporting Directive (the Directive).

The Directive requires approximately 6,000 companies across Europe to disclose information regarding policies, risks, and outcomes with regard to environmental and social matters in their management report. However, to date, environmental reporting has not been good enough, both in terms of its quality and quantity. Particularly, investors have cited challenges around the comparability and reliability of information, as well as difficulties in finding non-financial information even when it has been reported. 

The EU Environmental Reporting Handbook was launched recently, and it helps companies to learn from their peers, as well as to better understand how to report in line with the Directive. Examples from companies across EU member states including Anheuser-Busch InBev, Royal DSM, and Société Générale prove how they effectively disclose information which corresponds to the Directive’s five content categories on environmental matters.

Helpfully, the Handbook maps each category to the corresponding requirements of the CDSB Framework, the TCFD recommendations, and the relevant questions in the CDP climate change questionnaire to further facilitate disclosure. 

The release of the EU Environmental Reporting Handbook comes at a time when non-financial reporting is continuing to gain eminence across the world.

The top five risks in the WEF Global Risks Report were environmental for the first time ever in 2020. At the same time, results from CDP show that companies on the climate change A List have outperformed their peers on the stock market by 5.5% per annum (according to STOXX). This indicates a clear connection between transparency and financial success.

Furthermore, the European Commission has announced that it plans to review the Directive in 2020 in order to improve disclosure by companies on both climate and environmental information. Reporting requirements are tightening, and guidance such as the EU Environmental Reporting Handbook is essential in supporting companies as they endevour to improve their disclosures.

“To achieve the estimated €260 billion of additional annual investment needed to meet the current 2030 climate and energy targets, a massive mobilisation of not just public but also private sector capital is required. Clear, consistent and comparable disclosure will play a key role in this allocation of capital to ensure that investors are fully informed about the sustainability of their investment practices

“The Handbook offers companies guidance on how to effectively approach disclosure including what can be learned from the experience of their peers. We have identified their efforts as good practice; however, we are still far from best practice. We look forward to working with the European Commission to strengthen the existing Directive with the objective of bringing environmental disclosure into the heart of financial decision-making.”

Mardi McBrien, Managing Director, CDSB.

“The EU has confirmed that they will review the Directive in 2020 as part of the EU Green Deal. This Handbook offers companies an opportunity to get ahead of the curve and improve their reporting practices in advance of any update to the Directive and more stringent non-financial reporting practices. Companies that already report information on environmental and climate change through CDP and the CDSB Framework are already one step ahead.”

Mirjam Wolfrum, Director, Policy Engagement, CDP Europe

The EU Environmental Reporting Handbook is supported by the LIFE Programme of the European Union.

You can download The EU Environmental Reporting Handbook here: www.cdsb.net/nfrhandbook2020

Source: CDSB