Interview: practitioners on Corporate climate disclosures — what they wish they knew earlier

According to the International Financial Reporting Standards Foundation, over 80% of the world's largest companies now disclose climate-related information, yet fewer than 40% provide data that meets investor-grade assurance standards. This disconnect between disclosure volume and disclosure quality represents one of the most critical challenges facing sustainability practitioners today. In conversations with disclosure specialists, assurance providers, and corporate sustainability officers across the Asia-Pacific region, a consistent theme emerges: what companies report and what stakeholders actually need remain frustratingly misaligned. These practitioners—battle-tested through multiple reporting cycles under evolving frameworks—share candid insights about materiality determinations, assurance readiness, data control architectures, and the organizational redesign required to make climate disclosure operationally sustainable.

Why It Matters

Corporate climate disclosures have transitioned from voluntary reputational exercises to mandatory regulatory requirements across major Asia-Pacific jurisdictions. In 2024, the International Sustainability Standards Board (ISSB) standards achieved adoption or endorsement in fourteen countries, with Singapore, Hong Kong, Japan, and Australia implementing mandatory climate reporting requirements for large listed entities. By 2025, an estimated USD 12.7 trillion in assets under management across Asia-Pacific will be subject to mandatory climate disclosure requirements—a 340% increase from 2022 levels.

The stakes extend beyond regulatory compliance. Research from the Asian Development Bank indicates that companies with robust climate disclosures achieved weighted average cost of capital (WACC) reductions of 15-45 basis points compared to peers with weaker disclosure practices during 2023-2024. Conversely, disclosure failures carry material consequences: the Hong Kong Stock Exchange recorded 127 enforcement actions related to ESG reporting deficiencies in 2024, while the Australian Securities and Investments Commission issued 23 greenwashing infringement notices in the same period.

For Asia-Pacific enterprises operating across multiple jurisdictions, the complexity multiplies. A multinational headquartered in Singapore with operations in Japan, Australia, and the Philippines must navigate at least four distinct disclosure frameworks, each with different materiality thresholds, assurance requirements, and reporting timelines. Practitioners emphasize that building disclosure capabilities is no longer optional—it is fundamental infrastructure for market access and capital formation.

Key Concepts

Corporate Climate Disclosures refer to the structured reporting of climate-related risks, opportunities, governance practices, strategies, metrics, and targets by organizations to investors, regulators, and other stakeholders. Modern disclosure frameworks generally follow the four-pillar architecture established by the Task Force on Climate-related Financial Disclosures (TCFD): Governance, Strategy, Risk Management, and Metrics & Targets.

Scope 3 Emissions represent greenhouse gas emissions occurring in a company's value chain, both upstream (supply chain) and downstream (product use and disposal). Scope 3 typically constitutes 70-90% of a company's total carbon footprint and represents the most challenging disclosure category due to data availability constraints and methodological complexity. Under ISSB S2, Scope 3 disclosure is mandatory with a one-year transition relief period.

Underwriting in the climate disclosure context refers to the process by which financial institutions assess climate-related risks when providing insurance, loans, or investment capital. Increasingly, underwriters require standardized climate disclosures to price climate risk into financial products, creating market-based incentives for disclosure quality.

WACC (Weighted Average Cost of Capital) represents the average rate a company expects to pay to finance its assets. Climate disclosures influence WACC through multiple channels: reduced information asymmetry lowers equity risk premiums, demonstrated climate risk management reduces credit spreads, and sustainability-linked financing instruments offer rate reductions for verified climate performance.

TCFD and SEC Climate Rules represent complementary disclosure regimes. The TCFD framework, now incorporated into ISSB standards, provides the conceptual foundation for climate disclosure globally. The U.S. Securities and Exchange Commission's climate rules, while currently subject to litigation, mandate Scope 1 and 2 emissions disclosure for large accelerated filers and require disclosure of material climate risks affecting financial statements.

What's Working and What Isn't

What's Working

Integrated Governance Structures: Organizations that embedded climate disclosure responsibilities into existing financial reporting governance have achieved superior outcomes. "We stopped treating sustainability reporting as a separate workstream," explains a disclosure manager at a major Japanese trading company. "When we integrated climate data into our existing financial close process with the same controls, the same sign-offs, the same deadlines, quality improved dramatically." Companies like Mitsubishi Corporation and Commonwealth Bank of Australia have demonstrated that board-level climate committees with direct oversight of disclosure processes reduce restatement rates and accelerate assurance readiness.

Technology-Enabled Data Controls: Leading practitioners have invested in enterprise carbon accounting platforms that provide audit trails, automated data validation, and real-time emissions calculations. Singapore's DBS Bank implemented an integrated ESG data management system in 2023 that reduced Scope 3 data collection time by 62% while improving data accuracy scores from 74% to 91% in external assessments. The key success factor: treating emissions data with the same rigor as financial data, including segregation of duties, maker-checker workflows, and automated reconciliation.

Phased Assurance Strategies: Rather than pursuing comprehensive reasonable assurance immediately, successful companies have implemented staged assurance roadmaps. Beginning with limited assurance on Scope 1 and 2 emissions, then expanding to reasonable assurance, then progressively adding Scope 3 categories as data quality matures. This approach, adopted by companies including Woolworths Group and Infosys, demonstrates continuous improvement while managing assurance costs and avoiding adverse findings.

Supplier Engagement Programs: Companies achieving Scope 3 excellence have invested in structured supplier capacity building. Toyota's Green Purchasing Guidelines require tier-one suppliers to report emissions using standardized methodologies, with Toyota providing training and technical assistance. This approach has enabled Toyota to report verified Scope 3 Category 1 emissions covering 85% of procurement spend—significantly above industry averages.

What Isn't Working

Materiality Determination Without Stakeholder Input: Multiple practitioners described materiality assessments conducted primarily through internal workshops without systematic stakeholder engagement as a persistent failure mode. "We spent three months on our double materiality assessment, produced a beautiful matrix, and then investors told us we'd missed their primary concerns entirely," recounts a sustainability director at an Australian resources company. Effective materiality requires structured dialogue with investors, lenders, insurers, and rating agencies—not just internal perspectives.

Decentralized Data Collection Without Standards: Companies relying on spreadsheet-based data collection from business units without standardized methodologies produce disclosures that cannot withstand assurance scrutiny. Inconsistent activity data definitions, varying emission factor sources, and absence of documentation create material misstatement risks. One practitioner described discovering a 23% emissions overstatement traced to a single subsidiary using different conversion factors—an error that required public restatement.

Treating Disclosure as Communications Rather Than Finance: Organizations that position climate disclosure as a corporate affairs or sustainability function deliverable, disconnected from financial reporting infrastructure, consistently struggle with assurance readiness. "The moment you separate your climate numbers from your financial numbers, you've created two sources of truth that will inevitably diverge," notes a Big Four assurance partner. Climate disclosure requires the same control environment as financial statements.

Underinvestment in Forward-Looking Scenario Analysis: Many companies treat scenario analysis as a compliance checkbox rather than a strategic planning tool. Practitioners report that scenario analyses using generic, off-the-shelf assumptions without company-specific adaptation fail to satisfy investor expectations and provide little strategic value. Effective scenario analysis requires deep integration with business planning, capital allocation, and risk management processes.

Key Players

Established Leaders

Commonwealth Bank of Australia (CBA) has emerged as a disclosure benchmark, publishing climate disclosures aligned with TCFD since 2018 and achieving reasonable assurance on Scope 1 and 2 emissions. CBA's climate reporting includes quantified financial impacts under multiple scenarios and detailed transition planning for financed emissions.

Mitsubishi Corporation demonstrates best-in-class Japanese disclosure practice, with integrated sustainability reporting covering all ISSB requirements and detailed Scope 3 emissions across fifteen categories. The company's internal carbon pricing mechanism directly links disclosure to capital allocation decisions.

Singapore Exchange (SGX) serves as both a disclosure leader and market enabler, having implemented mandatory climate reporting for listed companies in 2024 and providing extensive guidance resources for issuers transitioning to ISSB-aligned disclosure.

Infosys Limited represents emerging market disclosure excellence, achieving carbon neutrality since 2020 with comprehensive verified emissions reporting and detailed science-based target progress disclosure across all three scopes.

Woolworths Group exemplifies Australian retail sector leadership, with integrated climate disclosures covering value chain emissions, water security, and detailed just transition planning for affected workers and communities.

Emerging Startups

Persefoni provides AI-powered carbon accounting software enabling companies to automate emissions calculations across all scopes with audit-ready documentation and real-time reporting capabilities.

Watershed offers enterprise climate disclosure platforms used by companies including Stripe and Airbnb, featuring regulatory mapping that automatically identifies applicable disclosure requirements across jurisdictions.

Normative specializes in Scope 3 emissions intelligence, using spend-based and activity-based methodologies to help companies identify emissions hotspots and supplier engagement priorities.

ESG Book provides real-time ESG data and disclosure analytics, enabling companies to benchmark disclosure quality against peers and identify improvement opportunities.

Position Green offers sustainability reporting software specifically designed for ISSB and CSRD compliance, with built-in assurance controls and regulatory update tracking.

Key Investors & Funders

Temasek Holdings has established comprehensive portfolio company ESG disclosure requirements and actively supports disclosure capability building through its ecosystem development programs.

BlackRock remains the largest global asset manager engaging on climate disclosure, with systematic voting and engagement programs targeting inadequate climate risk disclosure at portfolio companies.

Government of Singapore Investment Corporation (GIC) incorporates climate disclosure quality into investment decision-making and has published detailed expectations for portfolio company sustainability reporting.

Asian Development Bank (ADB) provides concessional financing for climate disclosure infrastructure in developing Asian economies and has published extensive technical guidance on TCFD implementation.

Climate Investment Funds (CIF) mobilizes multilateral development bank resources to support climate disclosure capacity building, with particular focus on enabling disclosure infrastructure in emerging markets.

Examples

Example 1: DBS Bank Singapore Scope 3 Financed Emissions Disclosure

DBS Bank undertook a comprehensive financed emissions measurement program beginning in 2022, covering its SGD 435 billion lending portfolio across nine high-emitting sectors. The bank deployed specialized carbon accounting tools to calculate emissions intensities for over 2,400 corporate borrowers, achieving 78% coverage of in-scope exposures by verified data within eighteen months. DBS published sector-specific decarbonization targets aligned with Net Zero Banking Alliance methodology, with intermediate 2030 targets for power generation (-42% intensity), oil and gas (-23% absolute), and real estate (-35% intensity). The disclosure enabled DBS to price sustainability-linked loans with emissions reduction covenants, generating SGD 15.2 billion in sustainable financing during 2024.

Example 2: Toyota Australia Climate Transition Planning Disclosure

Toyota Australia implemented a facility-level climate risk assessment covering its Melbourne manufacturing operations and national dealer network in 2023-2024. The assessment quantified physical climate risks including extreme heat (projected 18 additional days >35°C by 2050 under RCP 4.5), flooding, and bushfire exposure affecting 23 regional dealerships. Toyota disclosed specific adaptation investments totaling AUD 47 million, including facility hardening, supply chain redundancy, and insurance restructuring. The company published its first standalone climate transition plan in 2024, detailing technology pathways for achieving net-zero Scope 3 Category 11 (use of sold products) emissions through battery electric and hydrogen fuel cell vehicle deployment, with quantified sales mix targets through 2035.

Example 3: Tata Steel India Scope 3 Supplier Engagement

Tata Steel India pioneered comprehensive Scope 3 disclosure within the Indian steel sector, covering upstream raw material emissions (Category 1 and 3) that constitute approximately 45% of total value chain emissions. The company implemented a supplier carbon measurement program reaching 340 suppliers representing 91% of procurement spend, providing standardized emissions reporting templates and technical training. Tata Steel disclosed verified Scope 3 Category 1 emissions of 28.4 million tonnes CO2e for FY2024, with a published roadmap to reduce intensity by 25% through 2030 via supplier engagement, modal shift to rail transport, and increased recycled content. The program enabled Tata Steel to secure EUR 500 million in sustainability-linked bond financing with Scope 3 reduction covenants.

Action Checklist

• Conduct a gap assessment comparing current disclosure practices against ISSB S1 and S2 requirements, identifying specific disclosure elements requiring development
• Integrate climate data governance into existing financial reporting controls, including documented procedures, segregation of duties, and maker-checker workflows
• Complete stakeholder-informed double materiality assessment with structured input from investors, lenders, insurers, and rating agencies
• Implement enterprise carbon accounting software with audit trail capabilities and automated emission factor management
• Develop Scope 3 measurement methodology covering material value chain categories, with documented data sources and calculation approaches
• Establish phased assurance roadmap beginning with limited assurance on Scope 1 and 2, progressing to reasonable assurance over defined timeline
• Create climate scenario analysis integrating company-specific assumptions with strategic planning, capital allocation, and risk management processes
• Design reporting operating model defining roles, responsibilities, and timelines for climate disclosure production aligned with financial reporting calendar
• Build supplier engagement program for material Scope 3 categories, including standardized reporting requirements and capacity building support
• Establish disclosure quality metrics and continuous improvement processes, including benchmarking against peers and systematic investor feedback integration

FAQ

Q: How should companies prioritize which Scope 3 categories to disclose first? A: Practitioners consistently recommend a materiality-based approach, beginning with categories representing the largest emissions volumes and those most financially material to the business model. For most companies, this means prioritizing Category 1 (purchased goods and services), Category 11 (use of sold products), and Category 15 (investments) for financial institutions. The ISSB provides a one-year transition period for Scope 3, which companies should use to implement robust measurement methodologies for priority categories rather than attempting comprehensive coverage with low-quality data. A phased approach demonstrating year-over-year improvement in coverage and data quality is preferable to static comprehensive disclosure based on industry averages.

Q: What level of assurance should companies target for climate disclosures? A: Current market practice is moving toward mandatory limited assurance as a baseline, with reasonable assurance increasingly expected for Scope 1 and 2 emissions. Practitioners recommend achieving limited assurance on all quantitative climate metrics within one reporting cycle, then building toward reasonable assurance on Scope 1 and 2 emissions within three years. For Scope 3, limited assurance with clearly disclosed methodology and coverage limitations is currently acceptable. Companies should engage assurance providers early in the reporting cycle—ideally during methodology design—rather than seeking assurance after disclosure completion. This proactive approach identifies control gaps and data quality issues when correction remains possible.

Q: How can companies effectively resource climate disclosure without creating parallel reporting organizations? A: Successful practitioners integrate climate disclosure into existing finance and risk functions rather than building separate sustainability reporting teams. The recommended model assigns climate disclosure coordination to a senior finance role (typically Chief Accounting Officer or Financial Controller level), with subject matter expertise embedded in business units and corporate functions. Technology investment in carbon accounting platforms that integrate with enterprise resource planning systems reduces manual effort and enables finance teams to own emissions data with the same proficiency as financial data. Companies achieving disclosure excellence typically allocate 0.5-1.5 full-time equivalent positions per billion dollars of revenue to climate disclosure activities, with this investment declining as processes mature.

Q: What are the key differences between ISSB standards and regional disclosure requirements in Asia-Pacific? A: While ISSB standards provide the foundational architecture, regional implementations introduce important variations. Singapore's mandatory climate reporting follows ISSB closely but phases implementation by market capitalization tier through 2027. Hong Kong requires additional disclosure on climate-related litigation risks. Australia's sustainability reporting standards introduce specific requirements for transition plans and just transition considerations not explicitly mandated by ISSB. Japan's disclosure requirements emphasize business model impacts and include specific guidance on scenario analysis time horizons. Companies operating across multiple jurisdictions should map requirements systematically, identify the highest-common-denominator disclosure that satisfies all applicable regimes, and build modular disclosure architectures that enable jurisdiction-specific supplements.

Q: How should companies approach disclosure of climate targets that may not be achieved? A: Practitioners emphasize that targets must be disclosed with appropriate context regarding assumptions, dependencies, and uncertainties—but this should not prevent ambitious target-setting. Effective disclosure clearly articulates the pathway to target achievement, identifies key dependencies (technology availability, policy support, market conditions), and describes governance processes for target monitoring and revision. When targets are at risk, proactive disclosure explaining the variance and remediation plans is preferable to delayed recognition. Companies should implement internal early warning systems that identify target deviation before external disclosure, enabling management response. Importantly, disclosure of the governance process for target-setting and revision—demonstrating that targets are integrated into business planning rather than aspirational statements—provides important investor assurance.

Sources

• International Sustainability Standards Board (2024). "IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information" and "IFRS S2 Climate-related Disclosures." IFRS Foundation.

• Task Force on Climate-related Financial Disclosures (2023). "2023 Status Report: Task Force on Climate-related Financial Disclosures." Financial Stability Board.

• Asian Development Bank (2024). "Climate Risk Disclosure and Cost of Capital in Asia-Pacific: Empirical Evidence from Listed Companies." ADB Economics Working Paper Series.

• Hong Kong Stock Exchange (2024). "Environmental, Social and Governance Reporting Guide" and "2024 ESG Enforcement Report." HKEX.

• Australian Securities and Investments Commission (2024). "Greenwashing Interventions and Enforcement Actions: Annual Review." ASIC Report 774.

• Singapore Exchange (2024). "SGX Sustainability Reporting Rules: Climate-related Disclosures Requirements." SGX RegCo.

• Net Zero Banking Alliance (2024). "Guidelines for Climate Target Setting for Banks: Version 2." United Nations Environment Programme Finance Initiative.