Press release

22 Sep 2020 Diegem, BE

With an average climate risk disclosure rate of 31%, EY Barometer finds Belgian companies could do better

EY presents its first Climate Risk Disclosure Barometer underlining that companies need to understand the risks and even the opportunities associated with the impacts of climate change.

Press contacts

Christophe Ballegeer

EY WEM Brand, Marketing and Communications Director

PR & Communications EY Belgium, travel - wining & dining - football - tennis - father of 2 lovely kids.

Céline De Waele

EY Belgium Climate Change and Sustainability Services Senior Manager

Guiding businesses and (non-profit and public sector) organizations in the process of implementing sustainability and circular economy.

Related topics Climate-related reporting
  • EY presents its first Climate Risk Disclosure Barometer Belgium. Companies need to understand the risks and even the opportunities associated with the impacts of climate change.

  • Investors and other stakeholders expect them to make better analyses and disclosures on their resilience to climate risks.

  • EY makes 3 key recommendations how companies should engage more strategically with the risks and position themselves to take advantage of the opportunities.

Most companies are well aware of this, but there is still a lot of uncertainty about what, how, when and where to communicate on climate risks. Based on publicly available reporting for the year 2019, EY used the categories defined by the Task force on Climate-related Financial Disclosures (TCFD) - governance, strategy, risk management and metrics - to assess Belgian companies’ climate disclosures. Some 56 companies of varying sizes, both listed and unlisted, from 10 sectors, were studied. Of these, 66% published some disclosures. However, with an overall quality disclosure rate of just 31%, there is definitely room for improvement.

EY therefore makes 3 key recommendations:

  • Firstly, climate change must be embedded both into business strategies and into risk management processes. The Covid-19 pandemic demonstrates the importance of long-term thinking – and management of climate-related risks is certainly no exception to this.
  • Secondly, an alignment of material risks and climate-related metrics is required. One of the major obstacles to clear reporting is the variety of different standards, metrics and regulations.
  • Thirdly, more companies should use scenario analysis to assess the potential impacts of climate change on their business. A lack of understanding of the potential financial impact of these risks is likely to be increasingly detrimental to financial performance.

EY also analyses and makes recommendations specifically for each of the 10 sectors covered. Six of these sectors were selected because of their significant vulnerability to the impacts of climate change. The other 4 are not only important to the Belgian economy, but also have the potential for overall impact across value chains.

While there are considerable variations within sectors, those most impacted by transition risks show the highest overall rates of climate-related disclosures:

  • Real Estate, subject to changes in climate and energy policies, comes out on top with 48%.
  • Technology, with its exposure to fossil fuel supply chains, is second, with 43%.
  • Banks and Asset Managers, subject to regulatory and commercial pressures, score 39%.
  • Manufacturing, with its need for low carbon substitutes, scores 34%.

At the other end of the spectrum, however:

  • Holding Companies score 17%
  • and Insurance just 13%.

Once again, EY’s key message is, “It’s time to stop debating the role of companies in addressing the climate emergency” (EY 2019 CEO Imperative Study).

Céline De Waele, author of the Barometer, underlines, “Almost the entire economy will be facing major disruption from climate transition and climate impacts over the coming years. Nonetheless, a majority of companies are not engaging strategically with these risks or positioning themselves to take advantage of potential opportunities. With investors paying increasing attention, this is likely to affect their valuation.”