In June 2017, the Task Force on Climate-related Financial Disclosures (TCFD) published its final report of recommendations for how companies should report on climate issues focusing on governance, strategy, risk management, and targets and metrics. There are a total of 11 more specific recommendations contained in these categories.

We decided to evaluate how difficult it will be for companies to implement the recommendations of the TCFD through a kind of “natural experiment.” In September 2017 we examined the disclosures of 15 of the largest oil & gas companies by market capitalization listed on the New York Stock Exchange for 2016, the year before the TCFD recommendations were public. Our question was “How close or far away are these companies from being able to meet these recommendations?”

We reviewed each company’s 10-K or 20-F for 2016 and their sustainability reports. Our reasoning was that if companies were already doing a reasonable amount of disclosure before these recommendations were published, then it would be more feasible to implement the TCFD’s recommendations than if virtually no related disclosures were being made.

In general, we found reporting to be uneven, with some TCFD categories fairly well covered and others not. We also found variation across companies, with most making fairly modest disclosures but some being fairly progressive in this regard. Eni, ExxonMobil, and Statoil provided the most robust disclosures. This suggests that the TCFD’s recommendations are reasonable and practicable ones.

The disclosures made by the other companies were often limited and perfunctory, leaving the impression that strict conformity with SEC rules and regulations was the primary objective, rather than transparency. Significantly, we also found that most of the disclosures were in voluntary sustainability reports, not the financial filings required by statute and as recommended by the TCFD.

Taken in the aggregate, at least one company was reporting on each of the 11 recommendations with one exception. For the most part, these disclosures are not ideally what the TCFD and the investor community is looking for, but they demonstrate progress is already being made even before the final report was issued.

Based on our analysis we conclude that existing disclosure practices demonstrate that at least some foundation is in place for companies to implement the TCFD’s recommendations. We have shown that there is precedent in practice in one industry, oil & gas—an especially challenging one—to show that reporting at the level of the four principles can be done. Reporting on the 11 more specific recommendations will be much more challenging, however, none of these are impossible to meet. It is a question of will, not capability.

We are optimistic that there will be enough leaders in the corporate community who will point the way towards best practice which others will follow, eventually leading to widespread adoption. But we also believe that ultimately some regulatory support will be necessary. Climate change is a systemic issue and so investors need system-level data. Which means data from all listed companies and eventually the large private ones.

Members of The Conference Board can download the report TCFD: It Can Be Done.