Deep Dive: Corporate Climate Disclosures — A Buyer's Guide: How to Evaluate Solutions

The corporate climate disclosure landscape has entered a period of profound complexity. The European Union's Corporate Sustainability Reporting Directive (CSRD) launched mandatory reporting in 2025 with stringent Scope 3 requirements and double materiality assessments. Meanwhile, the U.S. Securities and Exchange Commission's climate disclosure rules have been effectively abandoned following March 2025 developments, creating a transatlantic divergence in regulatory expectations. California's SB 253 adds another layer, mandating Scope 3 disclosure for companies with over $1 billion in revenue starting 2027.

For corporate sustainability teams, procurement officers, and technology decision-makers, this fragmented regulatory environment creates urgent need for disclosure solutions that can adapt to multiple frameworks while controlling implementation costs. Understanding how to evaluate these solutions requires clarity on both the regulatory requirements and the technology capabilities available to meet them.

Why Climate Disclosure Requirements Are Fragmenting

The global ambition for harmonized climate disclosure, championed through the Task Force on Climate-related Financial Disclosures (TCFD) and advanced by the International Sustainability Standards Board (ISSB S2), is colliding with regional political realities. The result is a patchwork of requirements that multinational companies must navigate simultaneously.

European Union: The Stringent Standard

The EU CSRD represents the world's most comprehensive mandatory climate disclosure regime. Wave 1 companies, primarily large public-interest entities, began reporting in 2025 on 2024 fiscal year data. The European Sustainability Reporting Standards (ESRS) require disclosure across environmental, social, and governance dimensions, with ESRS E1 addressing climate specifically.

Key CSRD requirements include mandatory Scope 3 emissions disclosure across all material categories, double materiality assessment examining both financial and impact perspectives, transition plan disclosure with science-based targets alignment, and third-party assurance requirements that will escalate from limited to reasonable assurance. While a 2024 simplification reduced mandatory datapoints by approximately 57%, CSRD remains substantially more demanding than other jurisdictions.

United States: Regulatory Retreat

The SEC's climate disclosure rules, finalized in March 2024, have been effectively abandoned as of March 2025. Legal challenges and political opposition resulted in the Commission staying implementation and ultimately withdrawing enforcement intent. The rules would have required Scope 1 and 2 emissions disclosure but excluded mandatory Scope 3 reporting.

California's Climate Corporate Data Accountability Act (SB 253) fills part of this gap at the state level. Companies with over $1 billion in annual revenue doing business in California must disclose Scope 1, 2, and 3 emissions, with Scope 3 reporting beginning in 2027. Given California's economic significance, this effectively creates a national disclosure requirement for many large companies.

Global Baseline: ISSB S2

The ISSB's S2 climate disclosure standard provides a global baseline that numerous jurisdictions are adopting or aligning with. Unlike CSRD's comprehensive approach, ISSB S2 focuses on investor-decision-useful information with a single materiality (financial) perspective. Scope 3 disclosure is required when material, with a transition relief period.

ISSB S2 has been adopted by or is under consideration in the UK, Japan, Singapore, Hong Kong, Australia, and other major markets. Companies with global operations increasingly need solutions that can produce disclosures meeting multiple framework requirements.

Key Capabilities: What Disclosure Solutions Must Deliver

Scope 3 Emissions Calculation

Scope 3 emissions typically represent 65-95% of total corporate carbon footprints, making this the most challenging and consequential disclosure requirement. Effective solutions must handle the 15 Scope 3 categories with varying data availability and calculation methodologies.

Solutions approach Scope 3 calculation through three tiers of data quality. Spend-based estimates use economic input-output data to estimate emissions from procurement spending, requiring only financial data but producing high uncertainty. Activity-based calculations use physical data like distance traveled, materials purchased, or waste quantities combined with emissions factors for improved accuracy. Supplier-specific data represents the gold standard, using actual emissions data from suppliers attributable to your organization.

Advanced platforms increasingly employ hybrid approaches that maximize accuracy within data constraints, applying supplier-specific data where available and modeled estimates where necessary. The capability to progressively improve data quality over time as supplier engagement advances represents a key differentiator.

Double Materiality Assessment

CSRD's double materiality requirement demands assessment of both inward (financial) and outward (impact) materiality. Solutions must support structured materiality assessment processes including stakeholder engagement documentation, impact and risk identification across the value chain, and threshold determination and justification.

Double materiality is unfamiliar to many organizations experienced only with financial materiality. Effective solutions provide frameworks and templates that guide users through the assessment process while maintaining documentation suitable for assurance.

Multi-Framework Reporting

With regulatory fragmentation, solutions must produce disclosures meeting multiple framework requirements without redundant data collection. The core capability is a unified data model that maps to multiple disclosure standards, with output formatting appropriate for each reporting context.

Alignment matrices between CSRD, ISSB S2, TCFD, CDP, and other frameworks enable understanding of overlaps and gaps. The most efficient solutions identify a primary framework and map disclosures to secondary frameworks, highlighting incremental requirements.

Assurance Readiness

Third-party assurance is mandatory under CSRD and increasingly expected by investors regardless of regulatory requirements. Solutions must support assurance engagements through clear audit trails documenting data sources and calculations, evidence attachment and management for supporting documentation, control frameworks demonstrating data quality processes, and access management enabling auditor review without compromising confidentiality.

Limited assurance requirements in early CSRD years will escalate to reasonable assurance, increasing documentation and control expectations. Solutions that mature with these requirements provide long-term value.

Evaluating Solutions: Key Decision Criteria

Data Integration Capabilities

Climate disclosure requires integrating data from across the organization including finance, procurement, operations, facilities, and HR. Solutions vary dramatically in integration approach.

Some platforms are designed as data aggregators, connecting via API to enterprise systems (ERP, procurement, travel management) and automating data collection. Others function as data entry interfaces, requiring manual input or spreadsheet upload. The former approach scales better and produces more consistent data but requires IT involvement and integration effort. The latter deploys faster but creates ongoing data collection burden.

Evaluate integration capabilities against your organization's systems landscape and IT capacity. The "right" answer depends on organizational context, but recognize that manual data collection often proves unsustainable as disclosure requirements expand.

Calculation Engine Sophistication

Emissions calculations, particularly for Scope 3, involve numerous methodological choices that affect results. Solutions differ in calculation sophistication.

Key questions include which emissions factor databases are available (GHG Protocol, DEFRA, EPA, ecoinvent, etc.), how frequently factors are updated, whether custom factors can be applied, how calculation methodologies are documented, and whether calculations can be validated or audited. Solutions with transparent, documented calculation methodologies inspire greater confidence from auditors and stakeholders.

Workflow and Collaboration

Climate disclosure is inherently cross-functional, requiring input from many organizational stakeholders. Solutions should support distributed data collection with role-based access, approval workflows ensuring data quality before reporting, collaboration features enabling discussion and clarification, and progress tracking against disclosure timelines.

For organizations beginning their disclosure journey, workflow capabilities may matter as much as analytical sophistication. The most technically advanced platform delivers limited value if it cannot engage the people needed to provide data.

Real-World Examples: Disclosure Solution Implementations

Unilever: Enterprise-Scale Multi-Framework Reporting

Unilever's sustainability reporting demonstrates enterprise-scale disclosure challenges. The company reports under CSRD, aligns with ISSB S2 and TCFD, and responds to CDP. Managing these overlapping requirements across a global operation with complex supply chains requires sophisticated platform capabilities.

Unilever's approach emphasizes supplier engagement for Scope 3 data quality. The company has implemented supplier carbon programs that generate primary emissions data for key suppliers, improving calculation accuracy beyond spend-based estimates. This supplier data integration required systems capable of ingesting diverse data formats and reconciling against procurement records. The lesson: Scope 3 accuracy ultimately depends on supplier engagement, and platforms should support this engagement process.

Siemens: Technology-Enabled Data Collection

Siemens has invested heavily in automated sustainability data collection across its global operations. IoT sensors on facilities provide real-time energy consumption data. Integration with enterprise systems automates travel, procurement, and waste data collection. This infrastructure reduces manual data collection burden while improving accuracy and timeliness.

The company's disclosure technology stack demonstrates that sustainability reporting increasingly connects with operational technology, not just business systems. Organizations with strong IoT and operational data capabilities can leverage these for disclosure purposes. The implementation lesson: consider how sustainability data collection integrates with broader digital transformation initiatives.

Nestlé: Scope 3 Supplier Collaboration

Nestlé's disclosure approach emphasizes supplier collaboration given that Scope 3 emissions dominate the company's footprint. The company operates supplier engagement programs that combine emissions data collection with capacity building, helping suppliers understand and reduce their own emissions.

Nestlé's technology platform supports this engagement model by managing supplier relationships, tracking data submission progress, and aggregating results into corporate reporting. The platform must balance data collection efficiency with supplier experience, recognizing that excessive burden on suppliers undermines engagement. This supplier-centric approach reflects the reality that large companies cannot achieve accurate Scope 3 disclosure without active supplier participation.

What's Working and What Isn't

What's Working

Integrated data platforms: Solutions that connect with enterprise systems and automate data collection are achieving strong adoption. The reduction in manual effort makes disclosure sustainable at scale. Organizations that implemented integrated platforms early are now extending coverage and improving data quality.

Framework harmonization features: Platforms that explicitly map between frameworks reduce duplication of effort. Producing CSRD, ISSB, and CDP disclosures from a single data collection process is now achievable with mature solutions.

Guided workflows: Solutions providing structured guidance through complex requirements (particularly double materiality) help organizations new to disclosure navigate unfamiliar processes. The consultative capability embedded in platforms reduces external advisory costs.

What Isn't Working

Spreadsheet-based approaches: Organizations attempting disclosure with spreadsheet tools are struggling as requirements expand. The lack of audit trails, version control, and calculation transparency creates assurance challenges. Migration to purpose-built platforms is increasingly necessary.

Scope 3 accuracy without supplier engagement: Spend-based Scope 3 estimates produce high uncertainty that auditors and stakeholders question. Organizations that have not invested in supplier data programs find their disclosures challenged. Technology alone cannot solve this; supplier engagement programs are essential.

Point solutions without integration: Organizations that implemented narrow tools for specific disclosure requirements (carbon accounting, TCFD reporting) are finding these siloed solutions insufficient for comprehensive frameworks like CSRD. Platform consolidation is occurring.

Action Checklist

• Map current and anticipated disclosure requirements across all operating jurisdictions to define solution requirements
• Assess current data collection and calculation capabilities against framework requirements, identifying gaps
• Evaluate solution options against data integration, calculation methodology, workflow, and assurance readiness criteria
• Develop Scope 3 supplier engagement strategy alongside technology selection, recognizing that data quality depends on supplier participation
• Plan assurance requirements and ensure selected solution provides adequate audit trail and documentation capabilities
• Build internal capability through training and dedicated resources rather than relying solely on technology or external advisors

FAQ

Q: Should we align with CSRD or ISSB S2 as our primary framework? A: Organizations with EU presence or significant EU investor exposure should treat CSRD as primary given its regulatory mandate and comprehensive requirements. ISSB S2 serves well as a primary framework for organizations focused on investor communication without EU regulatory exposure. The frameworks substantially overlap, so either choice enables secondary alignment with reasonable effort.

Q: How accurate do Scope 3 disclosures need to be? A: Current practice accepts significant uncertainty in Scope 3 calculations, particularly for difficult categories like purchased goods and services. Regulators and auditors expect transparent methodology disclosure and good-faith estimation using best available data. The expectation is continuous improvement in data quality over time, not immediate precision.

Q: Can we use the same disclosure for multiple frameworks? A: The core data and narratives can serve multiple frameworks, but output formatting and some specific disclosures differ. Solutions with multi-framework capability produce appropriately formatted outputs from unified data. Some supplementary disclosures may be required for specific frameworks.

Q: What is the typical implementation timeline for disclosure solutions? A: Enterprise implementations typically require 6-12 months depending on integration complexity and organizational readiness. Organizations facing near-term compliance deadlines should plan accordingly. Faster implementations are possible with limited scope, expanding coverage over subsequent reporting cycles.

Sources

• European Commission. (2024). European Sustainability Reporting Standards (ESRS). https://ec.europa.eu/finance/sustainable-finance/corporate-sustainability-reporting_en
• International Sustainability Standards Board. (2023). IFRS S2 Climate-related Disclosures. https://www.ifrs.org/issued-standards/ifrs-sustainability-standards-navigator/ifrs-s2-climate-related-disclosures/
• U.S. Securities and Exchange Commission. (2024). The Enhancement and Standardization of Climate-Related Disclosures. https://www.sec.gov/rules/final/2024/33-11275.pdf
• California Air Resources Board. (2024). Climate Corporate Data Accountability Act (SB 253) Implementation. https://ww2.arb.ca.gov/our-work/programs/climate-corporate-data-accountability-act
• Task Force on Climate-related Financial Disclosures. (2017). Final Report: Recommendations of the Task Force on Climate-related Financial Disclosures. https://www.fsb-tcfd.org/recommendations/
• GHG Protocol. (2011). Corporate Value Chain (Scope 3) Accounting and Reporting Standard. https://ghgprotocol.org/standards/scope-3-standard
• CDP. (2024). CDP Technical Note: Relevance of Scope 3 Categories by Sector. https://www.cdp.net/