Navigating Climate Reporting: A Blueprint for Businesses (2023)

As climate change intensifies, regulatory bodies and stakeholders are demanding greater transparency from businesses. Climate reporting and sustainability reporting have become essential components of corporate strategy, ensuring companies are held accountable for their environmental impact. With the Swiss Federal Council’s climate disclosure ordinance coming into force in 2024, companies must act swiftly to adapt to these new requirements.

Understanding the Swiss Climate Reporting Ordinance

In November 2022, the Swiss Federal Council adopted an ordinance requiring large Swiss companies to disclose climate-related performance. This regulation aligns with Articles 964b-964c of the Swiss Code of Obligations, emphasizing the importance of transparency in non-financial reporting. Compliance is presumed if reporting follows the Task Force on Climate-related Financial Disclosures (TCFD) framework.

This ordinance presents a significant challenge, particularly for companies unfamiliar with climate risk reporting. The transition requires clear governance, structured strategies, and comprehensive ESG data collection to meet the obligations.

Keeping the big picture in mind

The Climate Reporting Canvas: A Strategic Approach

To facilitate compliance and improve sustainability reporting efficiency, Pelt8 and CelsiusPro developed the Climate Reporting Canvas. This framework provides companies with a structured approach by focusing on four key elements:

1. Vision: Establishing a company-wide commitment to sustainability and climate action.
2. Challenges: Identifying hurdles in ESG reporting and compliance processes.
3. Actions: Implementing strategies to overcome obstacles.
4. Opportunities: Leveraging climate risk management for business growth and resilience.

Key Challenges in Climate Reporting

Companies face multiple obstacles when implementing climate disclosures, categorized into four areas:

1. Reporting: Companies struggle with evolving climate regulations, fragmented sustainability standards, and the challenge of machine-readable ESG reporting formats. Ensuring compliance with double materiality—covering both financial and environmental impacts—is another major hurdle.
2. Data: Inaccurate or incomplete carbon footprint data poses a challenge, with issues such as fragmented emissions data, poor traceability, and increasing external validation demands. The shift toward forward-looking climate risk analysis adds complexity.
3. People: A lack of corporate sustainability leadership, limited expertise in climate compliance, and the need for cross-functional collaboration slow down reporting progress.
4. Resources: Many organizations lack the budget for ESG initiatives, digital tools, and internal capacity to integrate climate metrics into existing reporting frameworks effectively.

Actions and Opportunities for Businesses

To navigate these challenges, companies must implement ESG best practices:

• Make climate reporting decision-relevant: Sustainability disclosures should drive climate action planning, not just fulfill regulatory requirements.
• Follow established frameworks: Adopting TCFD, Global Reporting Initiative (GRI), or ISSB sustainability standards ensures consistency and credibility.
• Invest in digital ESG solutions: Automated data collection and carbon accounting tools improve reporting accuracy and efficiency.
• Develop internal ESG expertise: Training employees in sustainability compliance and green finance strengthens corporate strategy.
• Engage stakeholders in sustainability efforts: Collaboration across supply chains and value chains enhances data quality and reporting credibility.
• Integrate climate metrics into financial reporting: CFOs play a crucial role in aligning sustainability performance with business risk management.

Why Climate Reporting is an Investment, Not a Cost

Despite initial challenges, corporate climate reporting offers long-term benefits:

• Enhanced ESG strategy: Informed decision-making based on reliable sustainability performance data.
• Improved investor relations: ESG-conscious investors favor companies committed to carbon neutrality and net-zero goals.
• Regulatory compliance readiness: Early adaptation ensures alignment with evolving corporate sustainability laws.
• Operational resilience: Identifying climate risks and opportunities helps mitigate future disruptions.

Looking Ahead

The shift from voluntary ESG reporting to mandatory climate disclosures marks a new era of corporate environmental responsibility. With third-party ESG audits becoming standard, companies must elevate sustainability reporting to the level of financial disclosures.

By embracing climate risk reporting as a tool for growth rather than a regulatory burden, businesses can future-proof their operations, strengthen stakeholder trust, and contribute to a low-carbon economy. The time to act is now—companies that invest in sustainability reporting today will be best positioned for success in a climate-conscious business landscape.