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Best Practices in Corporate Climate Disclosure

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Best Practices in Corporate Climate Disclosure

Across the globe, companies have acknowledged that action is needed to combat climate change, and many are recording and disclosing their carbon emissions. While the number of companies reporting emissions continues to increase, actions are not aggressive enough to slow climate change. Trucost research shows that although the carbon reduction targets set by top global companies in 2016 seem quite large (1.0 GtCO2e), they actually account for only 16 percent of the reduction needed by 2100 to keep the global temperate rise below 2 degrees Celsius, as specified in the Paris Agreement. This is the widely accepted limitation of temperature growth to avoid significant, even potentially catastrophic, changes to the planet.

Trucost reviewed how 2,500 of the world’s largest companies are reporting on their carbon emissions and managing the climate-related risks that may have financially material implications. Using the analogy of a mountain climb, Trucost considered where companies are on their climate risk management journey by placing them in one of four categories: on the couch; gear packed; at base camp, and, for those who have made significant strides, near summit. Results are summarized below, illustrating the corporate climate journey around three climate-related risks: supply chain risk management, carbon pricing risk management, and climate-related financial disclosure in line with the Task Force on Climate-related Financial Disclosures (TCFD).1

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