In 2021, 503 companies (84%) listed on the STOXX Europe 600 index, representing a market capitalization of over US$11 trillion, responded to CDP’s climate change questionnaire. This analysis looks at the disclosing organizations’ alignment with the recommendations of the Task Force on Climate-related Financial Disclosure (TCFD) and the reported financial impacts of climate-related risks and opportunities.
Evaluating the TCFD alignment of companies listed on this European index is particularly relevant because in April 2021, the European Commission issued a proposed Corporate Sustainability Reporting Directive (CSRD). The CSRD will ensure that companies publicly disclose the climate-related risks and opportunities they face as well as the impact their business has on the environment. Company disclosures under the CSRD will need to be in line with the European Sustainability Reporting Standards (ESRS) which are being developed in alignment with existing standards and frameworks like the TCFD. Large companies are anticipated to be required to start reporting under the directive as early as 2024.