New EFRAG European Lab report finds climate-related reporting is improving, but remains a challenge for companies and investors


Michèle Lacroix


European Lab findings highlight that companies are at an early stage of what may be a long journey to improve their climate-related financial disclosures.

As the adverse impact of climate change becomes apparent, multiple initiatives have emerged to foster sustainable finance, while regulators and policymakers put increasing pressure on companies to act. 

But we understand that companies have difficulty in navigating both the regulatory landscape and their adaptation to a low carbon world. Therefore, transparency will be key to showing how companies prepare to deal with the impact of climate change as well as how willing they are to consider their own impact on the environment. Even if the goal is clear, it is a long journey. The Task Force for Climate-related Financial Disclosures (TCFD) provided guidance on how to report on climate change in June 2017, and the European Commission has since clarified the non-financial reporting requirements through new non-binding guidelines that leverage the structure of the TCFD recommendations. 

However, none of these frameworks is mandatory, which therefore limits their effective implementation and enforcement. The information provided by companies varies in quality and content, with different levels of maturity, transparency and qualitative/quantitative analysis. We know that this also makes it harder for users of corporate reporting to assess the information disclosed.

To start to address this important issue, the Project Task Force on Climate-related Reporting (PTF-CRR) at the European Lab @ EFRAG (European Lab), analysed the climate-related reporting of approximately 150 companies to identify good reporting practices, taking into consideration the needs of users of corporate reports. 

This research has now culminated into our new report: How to Improve Climate-Related Reporting, which consists of a main report and two supplemental documents on general climate disclosures and scenario analysis reporting. The report reflects the collaborative efforts between European preparers, users and other stakeholders.

What we found
  • Reporting is more mature among large cap than in small and mid cap companies and among carbon intensive sectors than in other activities less impacted by potential transition risk.
  • Companies are generally good at reporting their climate-related policies, but less good at reporting how they monitor such policies and how those policies influence their strategy and over what time horizon. 
  • There is limited explanation on if and how companies’ business models and strategies are adaptive and resilient to climate risk, with companies often providing generic information applicable to all companies within a sector. 
  • There is limited description of companies’ board’s oversight over climate-related risks and opportunities, and their commitment to environmental transformation. In particular, reporting on climate-related opportunities is often absent. 
  • Metrics are generally reported, but are not always linked to targets and risks. There are also shortfalls with the extent to which companies provide quantitative impact of climate change risk on financial metrics.
  • Users are eager to have access to quantitative information that preparers are not always comfortable disclosing due to the uncertain nature of scenario analysis and the potential detrimental impacts on the company. 
Helping companies and investors find the way forward

Our report aims to contribute to companies navigating through the urgent need for stakeholders to respond to climate change and the associated challenges arising from climate-related reporting. Our intention is to provide a useful toolkit for all those interested in climate-related disclosures and it is our hope that this report will contribute to the clarity that both preparers and users need.

We would welcome any feedback on our findings from the CRUF network to help shape our ongoing work on climate-related reporting. Please get in touch with us at

Michèle Lacroix Chair, European Lab Project Task Force on Climate-related Reporting (PTF-CRR) is also a member of the Technical Expert Group on Sustainable Finance at the European Commission and member of the Climate and Sustainable Finance Commission at the Autorité des Marchés Financiers.

The European Lab launched in late 2018 to stimulate innovation in the field of corporate reporting in Europe by identifying and sharing good practices. The European Lab aims to facilitate dialogue between reporting companies, users and other relevant stakeholders and its deliverables have no authoritative or normative status.  You can learn more about the European Lab here.

Disclaimer: The views expressed in the blog are those of the author and do not necessarily represent the views of CRUF participants.


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