A new EY report has found that while Irish companies are disclosing climate risks, they aren’t translating that into meaningful action.
While businesses in Ireland and around the world are starting to do better in disclosing their climate risks, they are also failing to act on decarbonisation and live up to their commitments.
This is according to a new EY report published today (11 October). It found a steep increase in the number of companies providing disclosures on climate impacts – with Ireland ranked highly globally in terms of quality of reporting.
Now in its fourth year, EY’s Global Climate Risk Barometer examined the efforts of more than 1,500 business in 47 countries. This is based on 11 recommendations set by the Task Force on Climate-Related Financial Disclosures (TCFD) to improve reporting of climate-related financial data.
Firms that were examined in the report achieved an average score of 84pc in relation to the level of information they disclose compared to the recommendations – up from 70pc last year.
The UK emerged as the country with the highest quality and coverage in terms of disclosures, while Ireland, South Korea and many European countries also ranked highly. In Ireland, businesses have seen a steep rise in coverage from 62pc to 88pc.
“We’re witnessing a sea change in the regulatory landscape around sustainability and climate risk, with new regulatory bodies and proposed standards, as well as examples of individual countries introducing their own rules,” said Lorraine McCann of EY Ireland.
“So, it’s not a surprise that companies around the world are improving their disclosure.”
McCann, who is the director of climate change and sustainability services at EY Ireland, said that while the TCFD recommendations are having an impact from a disclosure perspective, the quality of information is “still not where it needs to be”.
Many companies may be focused on ticking a box, she added, rather than addressing critical questions about the impact of the climate crisis.
In Ireland, disclosure quality has fallen from 59pc to 51pc. The average score in this category globally is 44pc, leading McCann to call out companies setting ambitious targets but not following up with a clear action plan.
“Many firms are not disclosing enough detail on their climate risks; and they aren’t translating reporting into meaningful action to tackle the problem. This is where we need to see much more progress. If disclosure is to make an impact on decarbonisation, it can’t be half baked,” she said.
“We’re also seeing a growing trend for ‘greenwishing’ where companies set hugely ambitious climate targets, with little or no clear plan to achieve them. That might help companies in the short term, but without realistic targets they’ll be on a hiding to nothing.”
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