March 15, 2022

Breaking Down the Climate Disclosure Ecosystem

In recent years, the mounting urgency of climate change has called for a clear understanding of businesses’ impact on our planet’s warming. Corporate disclosure on climate goals and impacts has been increasingly crucial in painting this picture. Businesses have responded to the call for transparency – with more than 13,000 companies, worth over 64% of global public company market capitalization, currently disclosing data on climate change, water security and deforestation through the CDP.1

However, climate disclosures and carbon accounting are relatively new concepts for many private companies. As pressure grows from ESG and climate regulators, stakeholders, and investors, companies have been increasingly disclosing climate data in line with their financial disclosures. Software providers have developed platforms to streamline and standardize the process. Supported by a set of key frameworks, this infrastructure helps companies understand how and what to measure and disclose while ensuring accuracy and transparency for data users. 

Novata and partner Persefoni, the leading provider of carbon accounting solutions for organizations and financial institutions, recently launched a white paper, “Making Sense of Climate Disclosure,” to help companies on their reporting journey. The paper highlights the key players in the sustainability reporting ecosystem, outlines key frameworks to align with, and provides details on the software tools needed to disclose climate data. 

Key takeaways from the white paper include:

  1. Pressure from regulators, stakeholders, and investors is growing for companies to disclose ESG and climate-related data.
  2. The challenge is climate disclosures and carbon accounting are relatively new concepts for most companies, and there are gaps in understanding the most effective way to get started.
  3. There is not only urgency to begin reporting, but also to become sophisticated quickly, with growing demands for more extensive, accurate, and transparent climate data.
  4. Novata and Persefoni are each uniquely positioned to assist their shared customer base within the financial markets.
  5. Those who can adapt will improve the sustainability of their company and have a competitive edge.

The risks and opportunities climate change brings to financial markets are becoming increasingly apparent. There is growing pressure for companies to execute extensive and transparent climate disclosures, providing more granular and accurate data in line with the relevant standards and frameworks. Those that can adapt will improve the sustainability of their companies, whereas laggards increase their chances of regulatory sanctions, reputational damage, and exposure to climate risk.

To view the Novata & Persefoni white paper, please see here.

To learn more about the Novata & Persefoni partnership, please see here.

1: CDP (2021), CDP reports record number of disclosures and unveils new strategy to help further tackle climate and ecological emergency.