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MUMBAI : Mumbai: Despite ongoing progress, companies are still struggling to come to grips with climate risk disclosures, according to EY Global Climate Risk Barometer report released on Sunday.

According to the report, companies based in India presented 28% on quality disclosure and 49% coverage. Only 3% of global companies reviewed meet the highest levels of quality and the average quality score is 42%. In contrast, only half of the companies examined around the world (50%) make all recommended disclosures, and therefore have full coverage; and on average, coverage is 70%.

Only 3% of global companies reviewed meet the highest levels of quality and the average quality score is 42%, said the report.

The report added that the number of Indian companies responding to disclosure platforms such as carbon disclosure project (CDP) is increasing. 2020 was the first-year Indian companies featured on the CDP A List. In November 2020, 24 Indian companies signed a pledge to work with the government toward achieving the 2015 UN Paris Climate Change Conference (Paris Agreement) goals, as part of the India CEO Forum on Climate Change. In the coming year, greater TCFD reporting is expected driven by pressure from financiers, investors and customers.

“The pandemic has spurred the importance of climate change and the gravity of climate crisis which go beyond an organization’s own footprint, requiring more complex data management, analysis and forecasting. Indian organizations are making progress on climate risk disclosures, and Securities and Exchange Board of India's (Sebi’s) business responsibility and sustainability reporting (BRSR) norms designed to be mandatory from FY23 onwards will further help investors identify firms’ business sustainability risks," Chaitanya Kalia, partner and national leader, climate change and sustainability services (CCaSS), EY India, said.

Sectors, around the world, with the most significant exposure to transition risk generally scored higher for their disclosures. These include banks, energy, manufacturing, telecommunications and technology, and transportation.

Although the results show year-on-year improvements in reporting, the research suggests most companies lack the internal capability to understand and act on their current and future exposure to climate risks and opportunities.

Responding to climate change risks and opportunities is likely to include business model changes, portfolio rebalancing, and investment in new capabilities. To shape their transition path, organizations should take a broader view of their value chain, their industry and their opportunities in a decarbonized economy," the report said.

The EY Global Climate Risk Disclosure Barometer provides a global snapshot of the increasing corporate focus on climate risks and opportunities as pressure from all stakeholders moves them up the boardroom and executive agenda. The research draws on public disclosures of companies on the uptake of the Task Force on Climate-related Financial Disclosures (TCFD) across highly impacted sectors. The disclosures of more than 1,100 companies across 42 jurisdictions were included in the assessment, broadening the size and geographical scope of the sample from the 2019 research.

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