Climate risk disclosure quality benchmarks: scoring TCFD, CDP, and CSRD reports

Of the 4,900+ companies that reported through CDP in 2024, only 24% scored an A or A-minus on climate disclosure quality, while a 2025 EY analysis of early CSRD filings found that fewer than 35% of EU large undertakings met all double materiality assessment requirements in their first reporting cycle. Meanwhile, TCFD-aligned disclosure adoption reached 79% among the world's 100 largest companies by revenue according to the FSB's final status report, yet independent assessments consistently show that completeness and analytical depth lag far behind stated alignment. The gap between disclosure quantity and disclosure quality has become the central challenge for investors, regulators, and reporting companies alike, making robust benchmarking frameworks essential for separating substantive climate risk reporting from performative compliance.

Why It Matters

Climate risk disclosure is no longer voluntary for most large companies. The EU's Corporate Sustainability Reporting Directive (CSRD) mandates detailed sustainability reporting from approximately 50,000 companies beginning with fiscal year 2024 reports. The International Sustainability Standards Board (ISSB) finalized IFRS S1 and S2 in June 2023, with adoption underway across more than 20 jurisdictions including the UK, Japan, Brazil, and Nigeria. California's SB 253 and SB 261 require climate disclosure from thousands of companies operating in the state starting in 2026.

This regulatory convergence creates an unprecedented volume of climate data flowing into capital markets. However, volume without quality produces noise rather than signal. A 2024 study by the Carbon Tracker Initiative found that 70% of oil and gas companies claiming TCFD alignment failed to incorporate Paris Agreement-consistent scenarios into their financial projections. Similarly, the Climate Action 100+ 2024 Net Zero Company Benchmark revealed that only 19% of focus companies had set medium-term emissions reduction targets covering their full value chain.

For investors managing trillions in climate-exposed assets, the ability to distinguish high-quality disclosures from superficial ones directly affects portfolio risk assessment, engagement strategy effectiveness, and capital allocation decisions. For reporting companies, understanding what constitutes best practice helps prioritize resources and avoid the reputational risk of greenwashing accusations. Benchmarking provides the analytical infrastructure to make these distinctions at scale.

Key Concepts

TCFD Framework and Scoring Dimensions

The Task Force on Climate-related Financial Disclosures, established by the Financial Stability Board in 2015, organized recommendations around four pillars: governance, strategy, risk management, and metrics and targets. Although the TCFD formally dissolved in October 2023 with monitoring responsibilities transferred to the ISSB, its framework remains foundational to virtually every major disclosure standard.

Quality scoring under TCFD typically evaluates completeness (how many recommended disclosures a company addresses), specificity (whether disclosures contain quantitative data or remain qualitative), forward-looking analysis (inclusion and rigor of climate scenario analysis), and integration (whether climate risks connect to financial planning and capital expenditure decisions). The FSB's 2023 status report found that while 58% of companies disclosed climate-related risks and opportunities, only 40% disclosed the financial impact of those risks.

CDP Scoring Methodology

CDP operates the world's largest environmental disclosure platform, processing questionnaires from over 23,000 companies, 1,100 cities, and 1,200 states and regions as of 2024. CDP's scoring system assigns letter grades from D-minus to A across four progressive levels: disclosure (transparency of reporting), awareness (understanding of environmental issues), management (actions taken to address issues), and leadership (best practices and verified outcomes).

In CDP's 2024 scoring cycle, 442 companies achieved an A rating on climate change, representing roughly 2% of respondents. The median score across all respondents was C, indicating basic awareness but limited management action. Sector-level variation is significant: financial services and consumer staples companies score materially higher on average than extractives and heavy industry.

CSRD and European Sustainability Reporting Standards

The CSRD represents the most prescriptive disclosure regime globally, requiring companies to report against the European Sustainability Reporting Standards (ESRS) developed by EFRAG. ESRS E1 (Climate Change) mandates disclosures on transition plans, Scope 1, 2, and 3 emissions, financial effects of climate risks, and internal carbon pricing mechanisms. Reports must receive limited assurance from an independent auditor, a requirement that escalates to reasonable assurance by 2028.

Early indications from the first wave of CSRD reporters (large EU public interest entities with >500 employees filing for fiscal year 2024) suggest significant implementation challenges. EFRAG's 2025 implementation guidance noted that double materiality assessments, the process of evaluating both how climate change affects the company and how the company affects the climate, represent the most complex element for preparers.

Sector-Specific KPI Benchmarks

KPI	Leading Practice	Average Performance	Lagging Performance
TCFD pillar completeness (11 recommended disclosures)	>90% addressed with quantitative data	55-70% addressed, mixed qualitative/quantitative	<40% addressed, mostly boilerplate
Scenario analysis depth	Multiple scenarios including 1.5C, quantified financial impact	Single scenario, qualitative discussion	No scenario analysis or vague references
Scope 3 coverage (% of relevant categories)	>80% of material categories quantified	40-60% of categories with partial methodology	<30% or Scope 3 not reported
CDP climate score	A or A-minus	B to B-minus	C or below
Third-party assurance scope	Scope 1, 2, and material Scope 3 assured	Scope 1 and 2 only	No assurance or self-verification
Target alignment with science-based pathways	SBTi-validated near-term and net-zero targets	Stated targets without SBTi validation	No quantified targets or ambiguous baselines
Internal carbon price disclosed	Yes, with application to capex decisions	Disclosed but not linked to decision-making	Not disclosed
Climate governance specificity	Named board member with climate expertise, quarterly review	General board oversight mentioned	No governance detail

Benchmark Methodology

Effective disclosure benchmarking requires a multi-dimensional scoring approach that moves beyond binary compliance checks. The most rigorous frameworks in use today share several common design principles.

Completeness scoring evaluates whether a company addresses each required or recommended disclosure element. For TCFD, this means assessing all 11 recommended disclosures across the four pillars. For CSRD/ESRS E1, it requires checking approximately 80 individual datapoints. Completeness alone, however, is insufficient. A company can technically address a disclosure element with vague narrative that conveys no decision-useful information.

Data specificity scoring distinguishes between qualitative statements ("we are exposed to transition risks"), semi-quantitative references ("significant financial impact"), and fully quantified disclosures ("transition risks could reduce EBITDA by 8-14% under a 1.5C scenario by 2035"). Research from the Grantham Research Institute at the London School of Economics found that specificity correlates strongly with investor utility, with quantified disclosures driving measurably different portfolio allocation decisions compared to narrative-only reporting.

Forward-looking rigor assesses scenario analysis quality across several dimensions: number and range of scenarios used, time horizons analyzed, granularity of sector and geography-specific assumptions, and whether financial impacts are quantified at the asset or portfolio level. The Network for Greening the Financial System (NGFS) provides reference scenarios that serve as a minimum baseline, but leading disclosers supplement these with proprietary analysis reflecting company-specific risk exposures.

Verification and assurance evaluates whether disclosed data has been independently verified. The CSRD's phased assurance requirements (limited assurance initially, reasonable assurance by 2028) set a regulatory floor, but leading companies already pursue reasonable assurance voluntarily. According to the IFAC's 2024 sustainability assurance study, 73% of the world's 250 largest companies obtained some form of sustainability assurance, up from 64% in 2022.

What Good Looks Like

Unilever

Unilever's climate transition action plan, published in 2024, exemplifies multi-framework integration. The company reports against TCFD, CDP (scoring A on climate in 2024), and has prepared for CSRD compliance. Its disclosure includes quantified financial impacts under three climate scenarios (1.5C, 2C, and 4C warming), with asset-level exposure mapping across more than 300 manufacturing sites. Unilever's Scope 3 reporting covers all 15 GHG Protocol categories, with independent limited assurance on Scope 1, 2, and key Scope 3 categories. The company's internal carbon price of EUR 100 per tonne is explicitly linked to capital expenditure approvals, demonstrating the integration of climate data into strategic decision-making.

Shell

Shell provides one of the most detailed scenario analysis frameworks among energy majors. Its 2024 Annual Report and Energy Transition Strategy include three proprietary scenarios (Archipelagos, Islands, and Sky 2050) extending to 2050, with sector-specific demand curves and regional granularity. Shell achieved a CDP score of A-minus in 2024 and reports against all 11 TCFD recommended disclosures with quantitative backing. However, Shell also illustrates the limits of disclosure quality as a proxy for climate action: Climate Action 100+ assessments have noted persistent gaps between Shell's disclosed strategy and the pace of decarbonization needed for Paris alignment, highlighting that high-quality disclosure and high-quality transition planning are related but distinct.

Iberdrola

Spanish utility Iberdrola has consistently ranked among the top performers in disclosure benchmarking. The company achieved CDP's A rating in 2024 for the fifth consecutive year and was named a leader in the Climate Action 100+ Net Zero Company Benchmark. Iberdrola's reporting is notable for its granularity on physical risk exposure, quantifying climate impacts on hydroelectric generation, thermal efficiency, and grid infrastructure across its operating territories in Spain, the UK, the US, and Brazil. Its Science Based Targets initiative (SBTi) validated targets include both near-term (2030) and net-zero (2040) commitments, with annual progress tracking against detailed decarbonization pathways.

Common Measurement Pitfalls

Conflating alignment claims with actual completeness. Many companies state they are "aligned with TCFD" or "reporting in accordance with ESRS" while addressing only a subset of required disclosures. A 2024 KPMG survey of sustainability reporting found that 78% of the world's largest 250 companies referenced TCFD, but independent assessments consistently show median completeness rates below 60%.

Scope 3 estimation inconsistency. Scope 3 emissions typically represent 70-90% of a company's total carbon footprint but are the most difficult to measure accurately. Companies use different estimation methodologies, boundary definitions, and data sources, making cross-company comparisons unreliable. The GHG Protocol's ongoing Scope 3 standard revision, expected to publish updated guidance by late 2026, aims to address these inconsistencies.

Scenario analysis as compliance theater. Including a climate scenario section that merely describes IPCC or NGFS scenarios without connecting them to company-specific financial impacts adds length without substance. The most common failure mode is presenting scenarios in isolation from strategy and capital allocation discussions, treating scenario analysis as a standalone appendix rather than an integrated planning tool.

Assurance scope mismatch. Companies may tout "independently assured" sustainability data while limiting assurance scope to Scope 1 and 2 emissions, excluding the Scope 3 categories and forward-looking projections that matter most to investors. Reading the assurance statement's scope paragraph is essential for accurate quality assessment.

Year-over-year comparability gaps. Changes in methodology, boundary definitions, or reporting frameworks between years can create apparent improvements or regressions that reflect accounting changes rather than real performance shifts. Leading disclosers provide restatements and bridge tables when methodologies change.

Key Players

Standard-Setters and Regulators

• ISSB (IFRS Foundation) - Global baseline sustainability disclosure standards (IFRS S1, S2)
• EFRAG - Developer of European Sustainability Reporting Standards under CSRD
• U.S. Securities and Exchange Commission - Federal climate disclosure rulemaking for US public companies
• CDP - Operates the world's largest environmental disclosure platform

Data and Analytics Providers

• MSCI - ESG ratings and climate risk analytics covering 8,500+ issuers
• Sustainalytics (Morningstar) - ESG risk ratings and corporate governance assessments
• ISS ESG - Climate solutions and disclosure quality scoring
• Bloomberg - ESG data and TCFD-aligned climate risk tools

Assurance and Advisory

• Deloitte - Sustainability assurance and CSRD implementation services
• PwC - Climate risk advisory and ESG reporting assurance
• EY - Sustainability reporting readiness assessments and assurance
• KPMG - Global sustainability reporting research and advisory

Investor Coalitions and Benchmarking Initiatives

• Climate Action 100+ - Investor engagement initiative assessing 170+ high-emitting companies
• Transition Pathway Initiative (TPI) - Independent benchmarking of corporate climate performance
• Science Based Targets initiative (SBTi) - Validates corporate emissions reduction targets

Action Checklist

• Map your current disclosure against all 11 TCFD recommended disclosures and ESRS E1 datapoints to identify completeness gaps
• Conduct a double materiality assessment that evaluates both financial impacts on the company and the company's impacts on climate, documenting methodology and stakeholder engagement
• Develop or refine climate scenario analysis using at least two scenarios (including 1.5C) with quantified financial impacts at the business unit or asset level
• Expand Scope 3 reporting to cover all material categories, documenting estimation methodologies and data quality limitations transparently
• Establish an internal carbon price linked to capital expenditure and procurement decisions, disclosing the price level and application scope
• Engage an independent assurance provider for Scope 1 and 2 emissions at minimum, with a roadmap to extend assurance to material Scope 3 categories
• Benchmark your disclosure quality annually against sector peers using CDP scores, Climate Action 100+ assessments, or Transition Pathway Initiative ratings
• Create a cross-functional disclosure governance team with clear board-level accountability, named responsible individuals, and quarterly review cycles

FAQ

Q: How do TCFD, CDP, and CSRD relate to each other? A: These frameworks are increasingly convergent. TCFD's four pillars (governance, strategy, risk management, metrics and targets) are embedded in both ISSB standards (which absorbed TCFD monitoring in 2023) and CSRD/ESRS requirements. CDP has aligned its questionnaire with TCFD and ISSB. Companies reporting under CSRD will largely satisfy TCFD and CDP requirements as well, though CDP's scoring methodology adds a performance evaluation layer that pure compliance frameworks do not.

Q: What percentage of companies achieve high-quality climate disclosures? A: Consistently, research shows that approximately 20-25% of large-cap companies produce disclosures rated as comprehensive and decision-useful. CDP's 2024 cycle awarded A grades to roughly 2% of respondents, while KPMG's analysis suggests fewer than 35% of early CSRD filers met full compliance requirements. Quality varies significantly by sector, geography, and company size.

Q: Is third-party assurance required for climate disclosures? A: Under CSRD, limited assurance is required starting with fiscal year 2024 reports, escalating to reasonable assurance by 2028. ISSB standards encourage but do not mandate assurance. In practice, 73% of the world's 250 largest companies already obtain some sustainability assurance voluntarily. The trend toward mandatory assurance is accelerating globally.

Q: How should investors use disclosure quality benchmarks? A: Disclosure quality serves as both a direct signal and a proxy indicator. High-quality disclosure directly enables better risk assessment by providing actionable data. It also serves as a proxy for management quality, since companies that invest in rigorous climate reporting tend to have stronger governance and more credible transition plans. However, investors should avoid equating disclosure quality with climate performance, as a company can produce excellent reports while maintaining a carbon-intensive business model.

Sources

• Financial Stability Board. (2023). "2023 TCFD Status Report." https://www.fsb.org/2023/10/2023-tcfd-status-report/
• CDP. (2024). "CDP Scoring Introduction 2024." https://www.cdp.net/en/scores/scoring-intro
• KPMG. (2024). "Survey of Sustainability Reporting 2024." https://kpmg.com/xx/en/our-insights/esg/survey-of-sustainability-reporting.html
• Climate Action 100+. (2024). "2024 Net Zero Company Benchmark." https://www.climateaction100.org/net-zero-company-benchmark/
• EFRAG. (2025). "ESRS Implementation Guidance: Double Materiality Assessment." https://www.efrag.org/en/projects/esrs-implementation-guidance
• Carbon Tracker Initiative. (2024). "Flying Blind: The Glaring Absence of Climate Risks in Financial Reporting." https://carbontracker.org/reports/flying-blind-2024/
• IFAC. (2024). "The State of Play in Sustainability Assurance." https://www.ifac.org/knowledge-gateway/contributing-global-economy/publications/state-play-sustainability-assurance
• Grantham Research Institute, LSE. (2024). "Climate Disclosure and Investment Decision-Making." https://www.lse.ac.uk/granthaminstitute/