Assessment of climate and environmental disclosures of companies from Southern, Central and Eastern Europe published pursuant to the EU Nonfinancial Reporting Directive (EU NFRD).

New data shows some, yet insufficient progress in companies’ climate and environmental disclosures at a turning point for sustainability reporting in Europe

Improved Sustainability Corporate Disclosure Policies

From the Community

New data shows some, yet insufficient progress in companies’ climate and environmental disclosures at a turning point for sustainability reporting in Europe

by Susanna Arus, Frank Bold ,”Improving climate and sustainability corporate disclosure policies to enable sustainable finance” project

Research on the climate and environmental disclosures of 300 companies from Central, Eastern and Southern Europe shows that only a minority of companies – approximately 30% – provide sufficiently detailed information on their climate policies and risks that allows to understand their development, position, performance and impact.

Similar to financial accounting, improving sustainability reporting is essential for better corporate management of pitfalls and opportunities in a fast-changing world. Focusing on relevant and meaningful disclosures is key to produce high quality and decision-useful reporting for companies and investors alike. The information that companies publish on their risks and impacts connected to climate change and broader sustainability matters is the main tool for investors, banks and financial market participants to understand the activities and strategies of the businesses they invest in.

The legislation for sustainability disclosures in Europe will be reformed in 2021, as part of a major overhaul of financial market regulation. Importantly, these reforms include plans to create accompanying reporting standards. This is a turning point for European policymakers, who have a unique opportunity to address the gaps identified in the study and provide much-needed directions and certainty to companies operating in critical sectors.

The research has been implemented by Frank Bold as part of the European Climate Initiative (EUKI), established by the German Federal Ministry for Economic Affairs and Climate Action (BMWK).

Key findings include:

  • Climate policies, plans and risks: 
    • 42% of companies don’t explain principal risks. When it comes to policies, 23% don’t report relevant information and 46% don’t describe outcomes of their implementation
  • Targets: 
    • Relatively few companies report on climate change targets (16%) and specific risks in a way that takes into account the planned transition of the European economy to a low carbon model (for example by using science-based methodologies to determine the decarbonisation target and timeline)
  • Task Force on Climate-Related Financial Disclosures (TCFD) and the finance sector:
    • The number of companies disclosing information corresponding to the TCFD-based criteria for risk reporting, such as time horizons, climate scenarios, strategy to manage risks, etc., remains very low (between 2% and 28% depending on the criteria). Similarly, financial companies surprisingly do not use indicators on their climate risk exposure as recommended by the European Commission
  • Emissions & turnover
    • Reporting on Scope 3 emissions (24%), greenhouse gas intensity (32%) , and turnover from sustainable activities (5%) is not very common, despite being highly material for companies analysed
  • Environmental matters: 
    • The assessment of companies’ disclosures on the use of natural resources, pollution and biodiversity follows a similar pattern, with even lower levels of reporting specific information (10%)
  • Positive developments: 
    • There is timid but promising progress (16% increase of companies providing specific information on their policies), but this improvement is mainly concentrated in Spain, with a 20% increase in climate target reporting
  • Regional differences:
    • While 25% of South European companies explain alignment with science-based climate targets, only 4% in CEE do so

Clearer obligations and standards are needed to clarify what companies in different sectors are expected to report and how these disclosure requirements are implemented. Similarly, it will level the playing field and ensure businesses in all countries are fit for the future.

The project organised two online events to present the results of the research providing a presentation of key findings and insights for companies in Southern Europe and CEE. The events featured key experts, business and financial actors and regulatory representatives.
  • 1) Are companies in Southern Europe ready for the European Green Deal (see recording in Youtube or read the summary of discussions here)
  • 2) Companies’ climate and environmental disclosure in the CEE: progress, gaps and opportunities (recording here)

Background information:

Following the obligations introduced by the EU Non-Financial Reporting Directive in 2018, large companies, banks and insurers are obliged to disclose relevant information on environmental matters, social and employee issues, human rights and anti-corruption. However, as shown by previous research of the Alliance for Corporate Transparency on the disclosures of 1000 European companies, the quality and relevance of information is still critically poor. The European Commission will present a proposal for a reform in early 2021, while the EU Parliament will vote on the issue in Autumn.

The European Union has an ambitious agenda for sustainable finance that focuses on redirecting private and public money to sustainable activities, and works toward covering the €180 billion of additional investments a year needed to achieve the EU’s 2030 targets agreed in Paris. The Green Deal and Recovery Package also directly refer to the need for reliable and meaningful sustainability data from companies. Furthermore, investors, accountants, banking associations, consumer groups and leading companies are calling for the standardisation of sustainability reporting at both EU and international level. All these actors, as well as global initiatives such as the Task Force on Climate-related Financial Disclosures are identifying slow but insufficient progress. The process to reform the EU legal framework has the potential to strike the right note in this direction.


The EUKI project YESclima presents itself to the European Commission

EUKI project YESclima is included as Best Practice in the Memorandum on the European Green Deal and the European Youth Guarantee.

Projekt work in Spain

Recognising Employment Potential

YesClima demonstrates how climate change mitigation can go hand in hand with employment policy. In Cadiz and Athens, where youth unemployment is high, 22 young people have been trained to carry out energy audits independently. Many schools that have undergone audits are benefiting, but the scheme also boosts the long-term employment prospects of the young people themselves.

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Reinforcing the European Youth Employment Policy with the European Green Deal

YESclima – Young experts for climate-friendly schools in Mediterranean countries

From the community

Reinforcing the European Youth Employment Policy with the European Green Deal

by Hartwig Berger, Sekretariat für Zukunftsforschung

Together with the “World Future Council”, the EUKI-project YESclima has published a proposal addressed to the European Commission. As consequence of the Corona-crisis it is feared that unemployment will rise massively in all affected regions of Europe. In particular the exclusion of (not only!) the European youth from economic activities will increase.

It is urgent and necessary to act immediately on European level and in the member states against this. The already existing European Youth Guarantee has to be amplified, in order to develop an ambitious policy favouring youth qualification and employment. We propose to prepare young people for tasks and professions that are necessary for a sustainable and environmentally compatible future. The best and most convincing way to do this, will be programmes to train young people for jobs and activities that are in line with the European Green Deal.

(Not only) Europe needs urgently qualified women and men to realize the numerous tasks which are required for energy transition, for a climate-friendly mobility and climate-adaptation, for an environmental-friendly agriculture, forestry and for nature protection in general. It is absurd and unacceptable to swallow massive unemployment and social exclusion of young Europeans; if looking ahead, the EU and all member states should offer large opportunities to train them for participation in the imminent task of a European Green Deal and in a green recovery of their home-regions.

In our proposal we have

• elaborated our ideas for educational programs in technical “Green Skills” similar to offers in the German “dual system”, but focusing competence development and training in creativity , entrepreneurship and cooperative working.

• given particular attention on how to involve young Europeans (and refugees) without any work and professional qualification.

Because just these men and in particular women are suffering more and more seriously unemployment and social exclusion.
The proposal we have sent to the Commission should support the process of preparing new directives for youth employment. We have translated it in Greek and Spanish, the languages of the countries were the YES-clima project is implemented. We hope to initiate more and profound discussions and activities on how to involve the youth in the Green Deal and for their own sustainable future.

Read the full version of the proposal in EnglishSpanish Greek

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The Eco-E.A.R.T.H. Project of YESclima

YESclima – Young experts for climate-friendly schools in Mediterranean countries

Students of the YESclima project have developed a proposal for a center, combining environmental education, innovative energy, gardening and plastic recycling, with the motive that all these functions together will have an ecological and environmental-friendly impact on the surrounding area.


Interview: Energy Audits, Youth Unemployment and Covid19

YESclima – Young experts for climate-friendly schools in Mediterranean countries

The EUKI project YESclima offers practical training for students on energy audits in buildings. Due to the spread of corona virus, the project work is now taking place online only.

The YESclima project trains young experts in energy audits. This saves costs and protects the climate.