Climate risk reporting initiatives and requirements for Swedish real estate investors: a brief overview

In this brief the authors aim to provide an overview of the different reporting frameworks that are applicable to financial actors and corporates, especially in the EU, to increase understanding of the climate risk disclosure landscape. There is an increasing amount of reporting initiatives and requirements related to disclosure, both specific to climate risk and covering sustainability more broadly, with some regulated and some voluntary. The authors recognize it is a snapshot in time, providing a taste of the current climate risk disclosure landscape. This brief is based on a desktop review with input from semi-structured interviews and discussions with the MAVERIC consortium partners, representing banks, real estate companies and real estate service companies. The work was carried out mainly during the first half of 2023. 

This brief's key takeaways include:

• Reporting of climate risks is increasing: The recommendations from TCFD are more and more used in reporting; for European companies the average level of disclosure across the 11 recommended disclosures of TCFD was 60% for fiscal year 2021, growing 23 percentage points since fiscal year 2019 (TCFD, 2022). 
• More and stricter reporting requirements: One interviewee foresees that if voluntary recommendations, “nice-to-haves” (e.g ECB guidelines), will not lead to the changes needed, there will be a change to “must-haves” and harder regulation. Another interviewee anticipated that regulations would become stricter, and that the organization would prepare for that. Requirements could also come from other actors than the government, such as from insurance companies. 
• A need for more data and standardization: Several interviewees noted a need for more data and standardization. On the wish list of one interviewee is a Swedish database or register that every bank could use to check risks, as well as a standard view on risk levels and which scenarios to use. 
• Transitional risk as driver: One interviewee foresees transitional risk to be a driver in the future, as the regulations/policy measures will become stricter.