Disparities in Climate Scenario Reporting: An Analysis of Developed and Developing Economies

Abstract

This study examines the quality gap in climate scenario analysis between developed and developing countries. The research compares climate-related disclosures from companies in both developed and developing countries, focusing on the quality of their climate scenario analyses, including transition risks, physical risks, and opportunities. Using data from companies listed in the TCFD, the study analyzes disclosures from 2020 to 2023 and reveals that companies in developed countries are more proactive in providing comprehensive and transparent climate-related information, driven by stronger regulatory frameworks, investor pressures, and greater technological capacity. In contrast, companies in developing countries face significant challenges due to gaps in resources, expertise, and regulatory readiness. The research highlights the implications of these disparities for global efforts to address climate change and emphasizes the need for capacity-building, regulatory harmonization, and enhanced cross-border collaboration. The study also suggests future research exploring the impact of IFRS S1 and S2 post- implementation on climate-related disclosures.