FSB Reports Progress on Climate-Related Financial Disclosure
these standards across the globe, as well as in establishing international assurance and ethics standards to enhance the reliability of climate- and other sustainability-related disclosures."
these standards across the globe, as well as in establishing international assurance and ethics standards to enhance the reliability of climate- and other sustainability-related disclosures."
The Financial Stability Board ("FSB") reported that major strides have been made in developing globally consistent standards for "Climate-related financial disclosures."
In its 2024 Progress Report titled Achieving Consistent and Comparable Climate-related Disclosure, the FSB outlined (i) achievements in standardizing disclosures, (ii) obstacles for adoption in different jurisdictions and (iii) initiatives to improve implementation, particularly in emerging markets. The FSB recognized the 2023 disclosure standards published by the International Sustainability Standards Board ("ISSB") as a "milestone achievement" which will "enable disclosures by companies around the world to be made on a common basis."
In the Report, the FSB addressed regulatory challenges to ensuring the reliability and comparability of climate-related disclosures and called on jurisdictions to address differences in local regulatory frameworks. The FSB said it is focusing on digital interoperability among various disclosure frameworks, enhanced reliability via assurance standards and alignment of transition plans.
The FSB highlighted the following:
- Global Adoption and Alignment. Approximately 75 percent of FSB jurisdictions have implemented or proposed climate-related disclosure requirements, often referencing ISSB standards or the FSB's Task Force on Climate-related Financial Disclosures ("TCFD") recommendations.
- Standardization for Financial Institutions. The Basel Committee's finalized Pillar 3 climate disclosure framework is set to improve consistency and comparability among internationally active banks.
- Small and Emerging Market Enterprises. Small and medium-sized enterprises and companies in emerging markets face unique challenges, including data availability, costs and regulatory clarity.
- Transition Planning. The International Financial Reporting Standards ("IFRS") Foundation plans to leverage materials from the UK Transition Plan Taskforce to support global disclosure of companies' transition strategies. The FSB said that the IFRS Foundation will monitor global progress on climate disclosures.
The FSB cautioned, however, that while TCFD-aligned disclosures are increasing, comprehensive disclosure across governance, strategy and risk metrics remains limited.