EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.
How EY can help
Coverage exceeds quality
- On average, FIs in the sample, report against 62% of the TNFD's recommendations, indicating strong coverage.
- However, the quality of these disclosures averages only 18%, illustrating that the recommendations are only addressed at a high-level.
- Banks scored the highest, followed by insurers and asset managers, while private equity firms scored significantly lower. Unlike climate-related disclosures where banks historically excelled, TNFD mobilization appears to progress more evenly across banks, insurers, and asset managers.
- This indicates that while FIs are making efforts to disclose voluntarily, while there is effort to disclose voluntarily, data quality and consistency from the real economy still presents a challenge to wholescale adoption.
- The disclosure quality of EU-based FIs was highest – possibly a reflection of the advancements of sustainability-related regulations and policies across the EU (e.g., Article 29 of the French law on Energy and Climate, as well as the Corporate Sustainability Reporting Directive (CSRD)).
These strong coverage scores indicate firms' voluntary disclosure efforts, but the lower quality reflects the TNFD's beta status during disclosure drafting. Improvement is expected, driven by emerging regulatory frameworks such as the CSRD and the International Sustainability Standards Board (ISSB).