Sustainability Disclosure
This report released by the WBCSD offers a structured analysis of how companies can manage uncertainty when preparing sustainability disclosures aligned with ESRS and ISSB standards. It addresses practical challenges in linking sustainability and financial performance.
The report organizes uncertainty into four themes: integration of requirements, evaluating what to disclose, making assumptions, and applying measurements and estimates. These themes reflect key areas where technical judgment is required.
One focus is the alignment of sustainability information with financial reporting. This includes ensuring consistency in data, assumptions, and reporting timelines to support integrated decision-making and avoid contradictions across disclosures.
Materiality assessments continue to be a source of variation. The report highlights differences between ESRS and ISSB, especially in how impact and financial materiality are defined and applied. Management judgment remains essential.
Assumptions play a central role when reporting future risks and opportunities. Companies are expected to explain the basis for these assumptions, apply them consistently, and disclose any limitations or alternative scenarios considered.
Measurement and estimation challenges often arise when data is limited or methodologies vary. The report outlines ways to approach these issues, particularly when estimating financial effects of climate-related and other sustainability topics.
Uncertainty stems from both internal and external factors. Internally, companies may face system limitations or data gaps. Externally, inconsistent regulations and evolving stakeholder expectations add further complexity.
The report also underscores the importance of assurance. Independent review of methods, assumptions, and data connections can support the reliability of reported information and build confidence among users.
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