Friday, 22 November 2024.
Today we will talk about problems in the transition plans by countries, industries and companies, specifically the report that IOSCO, the International Organization of Securities Commissions, published last November 13.
With the “finance COP”, COP 29 in Azerbaijan coming to an end, it is the last of this finance-focused 3 posts series based on recent reports from this international securities regulator.
Remember what we have already published:
About the IOSCO Report on Transition Plans:
“Capital market participants increasingly consider climate-related information to be material, particularly as it relates to the potential impact of climate change on portfolio entities or clients’ future prospects. The materiality of climate-related information is reflected in the adoption of mandatory climate disclosure requirements across multiple jurisdictions. For example, over 20 jurisdictions have decided to use or are taking steps to introduce the IFRS Sustainability Disclosure Standards, endorsed by IOSCO, in their legal or regulatory frameworks. These jurisdictions include the EU, UK, Japan and China, and account for around 40% of global market capitalization.”
The report highlights, however, several problems related to the disclosure of transition plans. These include:
the lack of a common definition for transition plans;
the lack of global transition plan-specific disclosure guidance, including for financial institutions;
information gaps in existing transition plan disclosures preventing investors from assessing progress on climate strategies;
even where the information exists, the lack of a framework or standard that accounts for sectoral and jurisdictional differences – i.e., a “one size fits all” approach does not work for assessment of transition plans;
the lack of assurance on the transition plan information and;
the uncertainty for entities around the disclosure of forward-looking information, e.g. concerns about liability risks.
Click at the image below for the 62 pages IOSCO Report on Transition Plans.
