To provide an approach for disclosing decision-useful environmental information in mainstream reports, the primary audience of the CDSB Framework is the investor. Other stakeholders, including regulators and other parties having an interest in capital markets, may also be beneficiaries.
The first version of the Framework focused primarily on climate change risks and opportunities. The scope has since been expanded to encompass natural capital dependencies, environmental risks and opportunities, policies, strategies and targets, along with environmental results and performance against those targets.
The Framework includes guiding principles that characterise the desirable attributes of reported information. In addition to ensuring that the disclosed information is based on criteria suitable for conducting assurance activities, the principles state that the disclosures ‘should look to the future as well as the past and present and should communicate trends and factors relating to environmental information that isare likely to affect the organisation’s future performance, position, and development’.
The reporting requirements, designed to encourage standardised disclosure of environmental information that complements other information in mainstream reports, are:
REQ-01 Governance — Disclosures shall describe the governance of environmental policies, strategy and information.
REQ-02 Management’s environmental policies, strategy and targets — Disclosures shall report management’s environmental policies, strategy and targets, including the indicators, plans and timelines used to assess performance.
REQ-03 Risks and opportunities — Disclosures shall explain the material current and anticipated environmental risks and opportunities affecting the organisation.
REQ-04 Sources of environmental impact — Quantitative and qualitative results, together with the methodologies used to prepare them, shall be reported to reflect material sources of environmental impact.
REQ-05 Performance and comparative analysis — Disclosures shall include an analysis of the information disclosed in REQ-04 compared with any performance targets set and with results reported in a previous period.
REQ-06 Outlook — Management shall summarise its conclusions about the effect of environmental impacts, risks and opportunities on the organisation’s future performance and position.
REQ-07 Organisational boundary — Environmental information shall be prepared for the entities within the boundary of the organisation or group for which the mainstream report is prepared and, where appropriate, shall distinguish information reported for entities and activities outside that boundary.
REQ-08 Reporting policies — Disclosures shall cite the reporting provisions used for preparing environmental information and shall (except in the first year of reporting) confirm that they have been used consistently from one reporting period to the next.
REQ-09 Reporting period — Disclosures shall be provided on an annual basis.
REQ-10 Restatements — Disclosures shall report and explain any prior year restatements.
REQ-11 Conformance — Disclosures shall include a statement of conformance with the CDSB Framework.
REQ-12 Assurance — If assurance has been provided over whether reported environmental information is in conformance with the CDSB Framework, this shall be included in or cross-referenced to the statement of conformance of REQ-11.
Both the Principles chapter and the Reporting Requirements chapter of the Framework document provide specifics as to the purpose of the specified requirement, along with additional explanatory guidance for implementation.
