EY finds businesses failing to align with climate reporting requirements

Recent research from EY Global has uncovered a lack of progress in tackling the world’s escalating nature crisis due to it being undermined by businesses not accurately reporting their impact on ecosystems.

The report, EY 2025 Nation Action Barometer, analysed the published reports of 435 countries with a combined market capitalisation of more than US$50 trillion in a range of sectors such as consumer goods, energy, hospitality and technology.

According to EY Global strategy and markets leader of climate change and sustainability services, Dr Velislava Ivanova, the report provided a snapshot of the surveyed companies’ public disclosures on nature impacts and dependencies that had been measured against the recommendations of the Taskforce on Nature Related Financial Disclosures (TNFD).

It was found that 93 per cent of companies mentioned nature in their published reports but not all provided the detail needed to help external stakeholders with decision making in relation to risk, governance and investment.

Only 26 per cent of the businesses surveyed provided information that aligned with the TNFD framework, signalling a potential gap in transparency about nature-related impacts, dependencies, risks and opportunities.

In addition to these findings, Ivanova said only 13 per cent produced a standalone report on their progress against the TNFD recommendations or included clear details of this progress in their existing reports.

“Our planet is under threat on several fronts, and half of the ten most serious are nature related. We’re all witnessing the sharp spike in extreme weather events, and the devastating scale of biodiversity loss,” she said.

“This year alone we’ve seen the hottest summer on record in Europe, destructive wildfires in the US and Canada, and accelerating deforestation in Brazil, Indonesia and elsewhere. With their reliance on natural resources, no businesses can afford to sit passively on the sidelines, hoping for the best.”

Ivanova added that many companies were showing a better understanding of nature risks and it was clear that business leaders were taking action, yet to manage risks and opportunities and effectively assist external stakeholders they needed to “produce credible data, collaborate effectively and have clear governance on nature”.

EY Global said the barometer examined the level of businesses’ reporting against the 14 recommendations contained in the TNFD across the disclosure pillars of governance, strategy, risk and impact management, as well as metrics and targets.

Based on this, the barometer then scored the companies on the number of recommendations for which they published information, as well as the details provided and the extent to which they aligned with the TNFD.

It was found that 87 per cent of businesses had coverage of governance and 31 per cent aligned with governance, yet progress on building out strategies and targets was less clear, according to Ivanova.

It was also revealed that only three per cent of businesses published goals that were nature positive and aimed to have a net positive impact on the natural environment.

“The TNFD recommendations provide a solid framework against which businesses can report their impacts on nature, and it rightly places emphasis not only on the number of recommendations on which businesses report, but also on the detail they share,” Ivanova said.

“Companies that regularly provide detailed disclosure can successfully engage with stakeholders and make much faster progress when it comes to building resilience, managing risks, and pursuing growth opportunities. Ultimately, it’s these companies that are at the vanguard of the fight to protect our planet.”