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This research highlights whether the assessed climate reporting entities are adequately addressing climate risks and opportunities through their strategies, and whether the disclosed metrics and targets offer stakeholders a clear basis for decision-making.
We explore the core challenges faced by each financial service type as determined by their unique operational characteristics; including rights of access to climate data and the availability of service-specific climate-reporting guidelines.
Key strengths were in the range of information (qualitative or quantitative) leveraged from existing systems processes and translated into metrics for organisational vulnerability to climate risks, as well as in the consistent disclosure of emissions reductions targets for 2030 or earlier.
BBSs were statistically significantly more likely than insurers to disclose, where applicable, at least one value for their Scope 3 investment emissions.
Further, 75% insurers and 94% of BBSs disclosed climate-related targets. Of the CRDs disclosing a climate-related target, all included at least one target with an end date of 2030 or earlier, while 44% of insurers, and 69% of BBSs disclosed a net zero target.
Overall, given the recency of the regime, most CRDs represented a compliance stance. More mature CRDs were differentiated by the ability to leverage a diversity of climate data, which laid the foundations for quantitative risk assessments and setting robust, ambitious climate targets.
Ongoing scrutiny of the transparency, reliability, and completeness of CRDs will be increasingly important as the regulatory landscape evolves. The long-term success of the CRD regime will ultimately depend on whether transparency translates into accountability, informed decision-making, and tangible climate risk mitigation efforts.
Finally, we would like to thank MinterEllisonRuddWatts for their input into our report.
