Forthcoming regime on climate-related disclosures ventures into uncharted territory for industries emitting high levels of greenhouse gas.

Current corporate reporting by most companies producing the highest levels of greenhouse gas emissions would not comply with proposed new requirements from the International Sustainability Standards Board (ISSB).

Members of the Observatory published the key finding of research, carried out by the University of Glasgow Adam Smith Business School and ACCA (the Association of Chartered Certified Accountants). Their work focused on finding out how prepared companies are for new climate-related reporting rules being developed by the International Sustainability Standards Board (ISSB).The research analysed the most recent reports published by companies in the construction material and chemical industries with the highest greenhouse gas emissions over the last three years. It compared current disclosures against the disclosure requirements of the proposed climate-related disclosure standard (IFRS S2, Climate-related Disclosures).


This analysis found that most companies fall short of the type and level of disclosure that the ISSB is proposing. Further, the research found that disclosures were often scattered and duplicated across different company sources, often with no cross-reference, and with little connection to financial information published in the financial statements.

Those companies (77% of the sample) that have adopted the Task Force on Climate-related Financial Disclosures (TCFD) Recommendations are significantly better prepared to comply with the proposed new disclosure requirements. However, even these companies will need to significantly increase their climate-related reporting to meet the new requirements of the proposed standard, which the ISSB aims to finalise by the end of 2022.

ACCA and the Adam Smith Business School are urging the ISSB to ensure the disclosure requirements are clear and easily understandable, and that thorough guidance is provided.

Professor Yannis Tsalavoutas, from University of Glasgow Adam Smith Business School said: “Seeing how companies are set to cope with potentially forthcoming climate-related disclosures is a crucial topic and one which will be of major importance in the next few years. The Adam Smith Business School is leading the way in this field.

We were pleased to work with ACCA on this ground-breaking research and look forward to continue to work together to see how companies’ reporting practices develop in this area.”

Susan Love, Strategic Engagement Lead for ACCA in Scotland, says: ‘Months after Glasgow hosted the COP26 discussions, ACCA has been delighted to work with the prestigious Scottish institution that is the Adam Smith Business School to inform the debate about new global climate reporting rules. The research suggests that standard-setters and regulators will need to focus support and guidance on those companies that have not adopted the TCFD Recommendations, including smaller businesses. It may be appropriate to allow a period of voluntary adoption before making the ISSB standards mandatory.”

ACCA also called on regulators to help users of this climate-related information by resolving the problem of the scattered location of disclosures, the lack of cross-referencing and duplication.

Susan added: “The ISSB also has an important role to play by providing greater clarity around location and cross-referencing in the standards, and by collaborating with the regulators to achieve a consistent approach.

“This research is not about pointing fingers at businesses. Rather, it is about understanding where they are at in their climate disclosures and working out how to help them improve in order to deliver meaningful climate action.”


Further information: Ioannis.Tsalavoutas@glasgow.ac.uk 

First published: 2 September 2022

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