Climate Disclosure Enters the Mainstream: What sets stronger companies apart?
Climate disclosure has changed dramatically over the last few years. What began as a largely voluntary exercise is becoming part of mainstream corporate reporting, driven by increasing investor expectations and a rapidly evolving regulatory landscape. With CDP aligning its climate questionnaire closer to IFRS S2 and many jurisdictions moving towards ISSB-based reporting requirements, organisations are increasingly finding that a single disclosure can support multiple reporting obligations.
The Shift?
However, its not all about new reporting frameworks. Expectations are also changing.
Increasingly, organisations are expected to demonstrate not only that they have climate policies, targets and governance arrangements in place, but also how climate-related considerations influence real business decisions.
Working on CDP scoring over several reporting cycles, one observation has stood out to me.
Many organisations have made significant progress in establishing governance structures and reporting processes, but producing a disclosure that presents a coherent, decision-useful picture of climate management remains far more challenging.
CDP's first IFRS S2-aligned questionnaire illustrates this well. Around 85% of responding organisations fully answered the governance-related questions, making it the strongest-performing area. By contrast, only 25% provided complete responses to the climate metrics questions, suggesting that translating governance into robust, quantitative reporting continues to be a challenge.
In my experience, stronger disclosures are rarely distinguished by more polished language or more ambitious commitments. They tend to stand out because governance, risk management, emissions data, strategy and performance all reinforce one another. The disclosure tells a consistent story, making it easier to understand not only what the organisation is doing, but why.
Three areas, in particular, consistently distinguish more mature disclosures.
Governance should demonstrate decision-making, not just structure
Most organisations now describe board oversight of climate-related issues.
That's no longer unusual. CDP's 2024 reporting cycle showed governance to be the area with the highest level of completed responses, reflecting how widely climate governance has become embedded across organisations.
The challenge is that governance is often described as an organisational structure rather than as a decision-making process.
It's relatively straightforward to explain that the board reviews climate risks annually or that a sustainability committee meets every quarter. Those descriptions explain who is involved, but they say much less about what actually changes because of those discussions.
The most convincing disclosures go a step further. They explain whether climate considerations have influenced investment priorities, informed capital allocation, reshaped procurement decisions or altered the assessment of strategic risks. Rather than presenting governance as a standalone reporting requirement, they demonstrate how climate considerations are integrated into the organisation's existing decision-making processes.
One pattern I've noticed while scoring disclosures is that stronger responses rarely treat climate as a separate management system. Instead, climate-related risks and opportunities appear alongside other strategic and operational considerations—in enterprise risk management, investment decisions, procurement processes and business planning. That doesn't necessarily mean organisations have more sophisticated governance structures; often, they simply explain more clearly how existing governance arrangements operate in practice.
Consistency also matters. If governance sections describe climate as influencing investment decisions, that influence should be reflected elsewhere in the disclosure through transition planning, capital expenditure, risk management or emissions reduction activities. When different sections appear disconnected, the overall disclosure becomes less convincing, even if each individual answer is technically complete.
Ultimately, effective governance is less about demonstrating where responsibility sits on an organisational chart and more about showing that climate considerations are routinely incorporated into business decisions alongside financial, operational and commercial factors.
Climate metrics are about confidence, not just numbers
Climate-related metrics remain one of the most challenging parts of disclosure. While governance achieved high completion rates in CDP's 2024 questionnaire, only 25% of organisations fully answered the climate metrics questions.
That difference isn't surprising. Producing robust emissions data often requires contributions from finance, operations, procurement, facilities, supply chain teams and external suppliers. Collecting the data is only part of the challenge; organisations also need confidence in its quality and consistency.
One recurring difference I see between stronger and weaker disclosures isn't necessarily the precision of the numbers themselves, but the transparency around how those numbers have been produced.
The stronger disclosures explain organisational boundaries, calculation methodologies, assumptions and known limitations. They distinguish between supplier-specific information and estimated data, and they are open about where uncertainty remains. That transparency generally gives greater confidence than presenting emissions figures with an unrealistic appearance of certainty.
Equally important, the metrics don't exist in isolation. The disclosure explains why emissions changed, how reduction initiatives contributed to those changes, and what the results mean for future plans. The numbers become part of a broader business narrative rather than an isolated reporting exercise.
Scenario analysis should inform decisions, not simply satisfy disclosure requirements
Scenario analysis remains an area where many organisations continue to develop their reporting. CDP's 2024 data showed that around half of responding organisations answered at least half of the questions aligned with IFRS S2 on climate scenario analysis.
In my experience, the most useful disclosures are not those that describe the scenarios in the greatest detail, but those that explain how the analysis has influenced decision-making.
For example, has it changed investment priorities? Has it highlighted supply chain vulnerabilities? Has it informed adaptation planning or capital allocation? Those practical outcomes are often more informative than lengthy descriptions of modelling assumptions alone.
Scenario analysis is most valuable when it supports better strategic decisions rather than existing solely to meet reporting expectations.
As climate reporting continues to converge around common international standards, organisations are under growing pressure to produce disclosures that are not only complete but also credible and decision-useful.
My experience scoring CDP responses has reinforced one simple lesson: organisations rarely strengthen their disclosures simply by writing better answers. They strengthen them by ensuring that governance, strategy, risk management, metrics and performance all tell the same story.
When those elements are aligned, climate disclosure becomes much more than a reporting exercise. It becomes a clearer reflection of how climate considerations are genuinely influencing the way an organisation plans, invests and operates.
