The Climate Disclosure Standards Board (CDSB): A framework for reporting environmental and climate change information in corporate reports

Launched at the World Economic Forum in 2007, the Climate Disclosure Standards Board (CDSB) is a federation of different business and environmental organisations, including the Climate Registry (TCR), CERES, The Climate Group, World Economic Forum and the World Resources Institute. The mission of this Board is to “promote and advance climate change-related disclosure in mainstream reports through the development of a global framework for corporate reporting on climate change”.

CDSB is accomplishing this by offering companies a framework for reporting environmental information with the same precision that they report financial information. Reporting of this rigour helps provide investors with serviceable environmental information enabling accurate investment decisions. Following this framework will also help companies with their regulatory compliances as it will help collate the material required for such legal submissions.

The elements of the framework

Although the framework specified by the CDSB is especially focused on investors, it acknowledges that other stakeholders could benefit from it too. The framework comprises the following:

  1. Guiding principles – These principles are devised to ensure that the information reported is correct and complete and is based on criteria that will be useful for conducting assurance activities. It states the 7 principles that should be applied in determining, preparing and presenting such information:
  • P1 - Environmental and social information shall be prepared by applying the principles of relevance and materiality

Environmental and social information is considered relevant when it is capable of influencing an investor’s funding decision. Further, the information is considered material if it is expected to have a significant positive or negative impact on the organisation’s current, past or future financial performance, operational results and ability to execute its strategy.  

  • P2 – Disclosure shall be faithfully represented

Disclosure shall be considered complete if it encompasses all the information to make an informed decision and does not leave out any detail presenting a misleading impression or creating a false claim.

  • P3 – Disclosure shall be connected with other information in the mainstream report

There should be a link between the environmental and social information and between this information and the rest of the report, including the financial information. The report should be presented in a manner that links the organisation’s strategy with its environmental and social performance.

  • P4 – Disclosure can be consistent and comparable

Companies in the same industries should have an element of uniformity within their reporting styles to enable easy comparisons between similar entities, reporting periods and sectors.

  • P5 – Disclosure shall be clear and understandable

As per this guiding principle, information should be presented in a manner that is clear, concise, straightforward and in an easy-to-follow structure.

  • P6 – Disclosure shall be verifiable

There should be no material error or bias in the disclosure and it should be backed by supporting evidence.

  • P7 – Disclosure shall be forward-looking

The disclosures should also state what the future could look like for the reporting company by analysing its past and current trends. This would need the company to have a future orientation and scrutinise how the resources available to it would impact its business model.


  1. Reporting requirements

These requirements have been put in place to align the environmental and social disclosures with other information in the report and simplify the reporting process:

  1. Governance – This requirement compels companies to ensure transparency and accountability for their oversight of the environmental and social policies, strategies and information. To have successful environmental and social policies in place, the organisation requires support from its board of directors or other higher governing bodies.
  2. Management’s environmental and social policies, strategies and targets – The disclosures in the report should include the management’s policies, strategies and targets to enable its readers to undertake a complete assessment of the company’s rationale and comprehend its indicative performance.
  3. Business risks and opportunities – The company should identify, assess and prioritise the risks and opportunities and articulate the same to its stakeholders.
  4. Sources of environmental and social impact – The organisation should report qualitative and quantitative results along with the techniques used to arrive at them. This will help increase transparency and the overall credibility of the organisation.
  5. Performance and comparative analysis – The report should also include an analysis of the results disclosed in the point above and the same should be compared with previously set targets (if any) or with the results of the previous period. This will give an indication of how the company is performing and how close/far it is from achieving its targets.
  6. Outlook – This encompasses the organisation’s outlook towards the future and requires the management to state its inference about the effect of the environment and social impacts and also the risks and opportunities that the organisation may encounter.
  7. Organisational boundary – The entities that form a part of the mainstream organisation shall also report on their environmental and social impact. The purpose of this is to ensure that the entity that is reporting the information is the same as the entity that is impacted by it.
  8. Reporting policies – The reporting provisions applicable to the company should be cited here and the company would need to confirm that they have used the same consistently. This will help inform the readers about the external policies that the company has complied with in its reporting.
  9. Reporting period – The report shall specifically state the time period for which information has been provided. This will help readers identify the environment and the social impact of the company during different time periods.
  10. Restatements – In case of any previous reports requiring amendments due to errors, changes in policies, methodologies or organisational structures, the same should be given in the form of a restatement in this report.
  11. Conformance – The report should also include a statement about its conformity with the CDSB framework. This will help inform the readers of the extent of the framework that the company has complied with, in its reporting.
  12. Assurance – If the above conformance has been provided then the same can be assured by a third party and the extent of such assurance shall also be stated in the report.

A report of this stature is a great way to gain the trust of employees and existing investors and shareholders, and build brand recognition in the minds of potential stakeholders.

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