**Alignment with Sustainability Regulations: The New Direction of Financial Supervision**
In an era where climate change poses one of the most severe challenges to the global economy, the necessity of adequately reporting on the environmental impacts of business activities becomes crucial. Financial supervisory authorities, such as Consob, are working to ensure that the information provided by issuers is not only accurate but also aligned with European sustainability regulations. This article will explore how recent directives and Consob’s focus on climate disclosure are reshaping the corporate reporting landscape.
### A European Regulatory Framework
Consob operates within a broader regulatory context, where the European Securities and Markets Authority (ESMA) has already identified climate disclosure as a supervisory priority. This focus is reflected in ESMA’s Public Statement of 2024, which emphasizes the need for consistent reporting between finance and sustainability, paying particular attention to climate risks.
In this scenario, companies are called upon to respond not only to the demands of their investors but also to the expectations of society and the environment. The increasing pressure for greater accountability is leading to a paradigm shift in corporate reporting.
### The Three Key Areas of Interest
An analysis of the 2023 financial statements of companies listed in the FTSE-MIB index has revealed improvements but has also highlighted the need for a timely adjustment to the new sustainability reporting regulations established by the Corporate Sustainability Reporting Directive (CSRD). Consob has outlined three key areas where companies must concentrate their efforts:
1. **Accessibility of Information**: It is essential that information is easily accessible and understandable. Companies must ensure that data is presented clearly and organized, so stakeholders can quickly assess their environmental impact.
2. **Consistency Between Financial Statements and Sustainability Reports**: There is an inseparable link between financial information and sustainability-related data. Companies must ensure that financial projections and plans for transitioning to net-zero emissions are aligned, reflecting an integrated view of their business strategy. This requires a review of business models and accounting estimates that consider risks associated with ecological transition.
3. **Increased Transparency on Climate Impacts**: Companies must provide specific details on the risks associated with climate change, including impacts on future cash flows, energy costs, and potential new environmental regulations. Transparency in these areas will not only help mitigate risks but also enhance investor confidence.
### Risks and Opportunities of Climate Change
It is imperative that companies utilize rigorous methodologies in assessing climate risks. Evaluating the impairment of asset values, for example, due to extreme weather events, is now a common practice that companies must adopt. Impairment tests must be conducted to quantify the economic impact of climate variations on their operations.
Furthermore, cash flow analysis should consider not only energy costs but also potential new taxes arising from stricter environmental regulations. Companies may need to rethink their investment portfolios and assess the opportunity to enter into insurance contracts to protect themselves from adverse climate-related events.
### Combating the Risk of Greenwashing
Despite efforts to enhance transparency, the risk of greenwashing—practicing misleadingly sustainable representations—remains a genuine concern. The mere presence of a climate section in financial statements is not sufficient to ensure the reliability of the information. Companies must adopt rigorous and verifiable reporting standards so that investors can trust their claims.
