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ACCT 1307 · ESG and Climate Reporting

Led by Penelope Smythe-Bottomley Simulacrum

1 modules 1 module Accounting & Business Updated 6 days ago
ESG and Climate Repo…7
  1. Module 7 ○ Open

    ESG and Climate Reporting

    Led by Penelope Smythe-Bottomley Simulacrum

    The question

    The new architecture of non-financial reporting. The module covers the historical sequence (voluntary CSR → GRI → CDP → TCFD 2017 → ISSB 2021 → IFRS S1 and S2 from 2024), UK SECR requirements, the TCFD framework (governance, strategy, risk management, metrics and targets), the GHG Protocol Scope 1/2/3 distinction with attention to the difficult and disputed Scope 3, scenario analysis (orderly, disorderly, hot-house), transition vs physical risk, the materiality debate (financial materiality under IFRS vs double materiality under EU CSRD), greenwashing and the FCA anti-greenwashing rule, the assurance question, and the international landscape. The closing scenario reads a set of climate disclosures critically.

    Outcome

    The student can describe the architecture of UK non-financial reporting, distinguish TCFD from IFRS S2, name the four pillars of climate disclosure, distinguish Scope 1 / 2 / 3 emissions, recognise the difference between financial and double materiality, and identify the warning signs of greenwashing. (ESG and climate reporting · jurisdictional)

    Practice scenarios

    Reading the Climate Disclosures

    Penelope Simulacrum hands you the climate-related disclosures from a UK-listed manufacturer. Reported Scope 1 emissions: 45,000 tCO2e (down 8% YoY). Scope 2: 22,000 tCO2e (down 12% YoY). Scope 3: "in development; expected to be reported next year". Net-zero target: 2050 (no interim milestones disclosed). The narrative is glossy, with photographs of solar panels and language about "leadership in sustainability". Your job is to assess whether this is substantive disclosure or greenwashing.

    Your goals

    • Identify the Scope 3 omission. For a manufacturer, Scope 3 (upstream supply chain, downstream product use) is typically 70-90% of total emissions. Reporting only Scope 1 and 2 is *materially incomplete*. The "in development" deferral is a red flag — IFRS S2 requires Scope 3 disclosure where material.
    • Identify the absence of interim milestones. A 2050 net-zero target with no 2030 or 2040 interim is meaningless — it allows the firm to defer all real action while still claiming alignment. Credible plans have science-based interim targets and capital-allocation plans to support them.
    • Identify the absence of scenario analysis. TCFD / IFRS S2 require scenario analysis (orderly, disorderly, hot-house). The disclosed report should describe the analysis and its conclusions. Its absence is a significant gap.
    • Identify the disconnect between glossy narrative and substantive disclosure. The photographs and language are marketing; the disclosure quality is what matters.
    • Apply Penelope Simulacrum's "ledger-mind for climate" principle: count what is missing, not just what is there. The disclosure is on the greenwashing end of the spectrum — improved Scope 1 and 2 numbers (modestly) presented as "leadership" while the substantive Scope 3 and interim-target work is deferred.
    • Recommend the questions to put to the company at the AGM: when will Scope 3 be reported, what interim milestones are planned, what scenario analysis has been done, what is the capital-allocation plan to deliver the 2050 target.