| Pub. Date | : Oct, 2022 |
|---|---|
| Product Name | : The IUP Journal of Accounting Research and Audit Practices |
| Product Type | : Article |
| Product Code | : IJARAP011022 |
| Author Name | : Amitava Mondal* and Somnath Bauri** |
| Availability | : YES |
| Subject/Domain | : Finance |
| Download Format | : PDF Format |
| No. of Pages | : 27 |
There are multiple impacts of climate change on companies, and it has been recognized as a major risk towards their sustainable development. Hence, investors and other stakeholders are increasingly interested to know how the companies are complying with various international and national guidelines for addressing and communicating these risks. The main objective of this paper is to check the quality and transparency of climate-risk reporting practices of the top-listed Indian companies. To meet this objective, we have examined the level of compliance of climate-risk reporting of the NIFTY-50 companies with the recommendations provided by Taskforce on Climate-Related Financial Disclosures (TCFD), 2017. We have constructed a Climate Compliance Index (CCI) with the help of "Guidance for All Sectors" of TCFD's final report, 2017 to examine the compliance of climate-risk disclosure by the sample companies. With the help of the CCI scores, we have found that the sample companies under the carbon-intensive industries have more compliance, whereas the sample companies under the Financial Service industry and Pharma industry have comparatively lesser compliance with the TCFD recommendations in climate-risk reporting. Despite some limitations, this is the first paper that has examined the compliance of climate-risk reporting practices following TCFD recommendations among Indian listed companies.
Climate change has been recognized as a source of emerging risks for a firm's financial and operational activities. Climate change imposes various risks on the business through two main channels, directly through physical damages from extreme weather events and indirectly through the transition to a lower-carbon economy to mitigate the impact of climate change (Winn et al., 2011; and TCFD, 2017). Winn et al. (2011) also anticipated that climate