- Investor Watch -

Climate-related risks not disclosed by Europe’s largest listed companies

Published May 22, 2020

The majority of Europe’s top 50 largest listed companies do not adequately report on risks such as climate change, according to research.  

The Climate Disclosure Standard Board’s (CBSD) latest analysis of environmental disclosure by Europe’s major companies found that 78% do not adequately report on their principal risks despite this being a core requirement of the EU’s Non-Financial Reporting Directive. 

The CDSB’s ‘Falling short?’ report analyses the 2019 environmental and climate-related disclosures of Europe’s top 50 largest listed companies, with a combined market capitalisation of US$4.3 trillion. 

Jeremy Nicholson, Alfa Energy’s Corporate Affairs Officer said: “Energy-intensive industries have been disclosing for some time for various legal reasons, but it’s clear all major business will have to be more transparent about exposure to climate costs and risks if investors are going to have confidence in them.” 

While 90% of companies did disclose at least one principal risk relating to climate or environment, only 54% considered both transition and physical risks. Just 6% defined the short, medium and long-term time horizons over which the risks would impact the organisation. 

As little as one-third of companies adequately addressed the environmental and climate-related risks and opportunities faced by their business. Over half of business model disclosures were light touch in nature and did not fully articulate the strategic integration or implications of these risks and opportunities into the company’s core business. 

Furthermore, 42% of companies omitted material environmental or climate-related information for their sector, such as principal risks which other companies in the industry had reported to be material.  

Tags Climate Change Climate Disclosure Standard Board Jeremy Nicholson