Climate-related Financial Disclosure

Extract:
In designing a new regulatory framework, Gunningham and Grabosky’s principles of ‘regulatory pluralism’ and ‘regulatory design’ should be considered. Corporate entities are subject to multiple regulators and regulatory instruments. Any new regulatory intervention should act synergistically with the existing regulatory space, and should enable the diffusion of regulatory oversight across multiple stakeholders. A framework’s ability to regulate conduct depends on its substantive provisions (ie.clarity of disclosure obligations, etc), as well as supporting oversight and enforcement mechanisms.

The framework’s design must consider the parties undertaking these roles, costs, abilities, etc.
A disclosure framework does not directly/explicitly require reporting organisations to change their conduct, only to report it. The act of reporting enables self-reflection and indirectly nudges behaviour toward a desired state. The degree to which it does so depends on whether entities are able to observe and measure their conduct. In the context of metrics and targets, the framework should be clear and specific as to how GHG emissions are to be measured and calculated.