Climate-related financial disclosures may become the accounting challenge of the decade as new ISSB-led standards tighten reporting requirements.
Regulators are focusing efforts on real estate as the slowest of all major asset classes to decarbonise, currently contributing to over 20% of UK carbon emissions.
With the standards rolling out globally, the UK government has given regulators the go ahead to require mortgage lenders, real estate funds, asset managers, and other businesses with property assets to provide more detailed and standardised disclosures on financed emissions and climate-related risks and opportunities.
Read on for the 101 on climate disclosures, including what’s changed in 2025 and how should businesses prepare for new disclosure requirements.
What’s covered:
- What are climate disclosures?
- Which organisations have to file climate disclosures?
- How have climate disclosures changed in 2025 under ISSB?
- What is the role of PCAF?
- How to disclosure accurately
- Next steps
What are climate disclosures?
At a general level, climate disclosures expose information about a organisations’ business activities, financial performance, governance practices and overall direction in regard to decarbonisation and the management of climate-related risks and opportunities.
These disclosures aim to draw consistent and comparable climate information from the business sector to achieve three broad goals:
- Align with global climate targets (e.g., net-zero by 2050).
- Provide transparency to investors and stakeholders.
- Manage risks associated with climate change and seizing opportunities for sustainable growth.
It is worth noting that disclosures alone won’t drive reductions in carbon emissions or improvements to governance practices, but by making it a legal obligation companies are now held to increasingly higher standards of transparency and accountability on climate performance. This draws a clear picture of which organisations are low-risk partners to tackle the climate transition alongside.
Are you clear on the terminology used for far? See our dedicated definitions page here.
Which organisations have to file climate disclosures?
Climate disclosures apply to sectors with significant environmental impact or financial influence, primarily under frameworks such as TCFD and ISSB (IFRS S2) in UK. These are similar to requirements proposed other jurisdictions, such as by the EU’s CSRD or USA’s SEC.
Publicly listed companies, large private corporations, and financial institutions, including lenders, are typically obligated to disclose their climate-related risks and GHG emissions. Requirements often apply to companies exceeding thresholds for turnover (e.g., £500m), assets, or employees (e.g., 500).
These organisations are provided additional support to report using standardised metrics and methodology using frameworks like PCAF, such as for financed emissions.
How have climate disclosures changed in 2025 under ISSB?
The ISSB has already carried out an initial consultation on the next stage of disclosure standards under IFRS S1/S2. These started to take over from TCFD requirements from January 2024 and will be embedded further from 2025.
Under the TCFD framework, financial institutions were recommended to disclose information across four core areas:
- Governance: Focusing on the organisations’ governance around climate-related risks and opportunities.
- Strategy: The actual and potential impacts of climate-related risks and opportunities on the organisation’s businesses, strategy, and financial planning.
- Risk management: The processes used by the organisation to identify, assess, and manage climate-related risks.
- Metrics and targets: The metrics and targets used to assess and manage relevant climate-related risks and opportunities.
The ISSB has largely adopted this framework but is now trending towards more detailed and standardised disclosures, including:
- Standardised measurement approaches: The use of consistent methodologies, such as those provided by the Partnership for Carbon Accounting Financials (PCAF), to ensure comparability.
- Industry-based metrics: Specific metrics relevant to the financial sector, enhancing comparability and relevance.
- Mandatory disclosure of financed emissions: Reporting on emissions associated with lending and investment activities, including emissions intensity for the purpose of target setting and annual comparisons.
- Additional information: Disclosure of how financed emissions are managed and integrated into risk assessment and strategic planning.
The plan is for the ISSB-led regulatory frameworks to be adopted worldwide with the aim of global alignment, transparency and accountability.

What is the role of PCAF?
While scope 1 and 2 emissions have been a reporting requirement for several years, organisations are now also required to report scope 3. For businesses with property assets, this mean reporting on financed emissions linked to investments and lending. To this end, the Partnership for Carbon Accounting Financials (PCAF) has provided the methodologies needed to calculate the key metrics.
Generally financers produce low scope 1 and 2 emissions. By comparison, scope 3 can easily dwarf other reported emissions, so misreporting – or not reporting at all – exposes the business to significant reputational and financial risk.
Data collection for scope 3 is often more complicated because it requires sourcing data from external customers and suppliers, so preparation must start early.
A key component is the PCAF data quality score. This is calculated to represent the accuracy of the emissions, which is submitted as part of the disclosure. Submitting a strong PCAF score (ranked from 1 to 5, which the lower the score the better) offers more confidence to both regulators and investors that risk exposure and financing opportunities have been assessed accurately.
How to disclosure accurately
Beyond regulatory pressure and stakeholder buy in, the key driver behind filing accurate climate disclosures is the quality and coverage of property data.
At the same time, data quality is also one of the biggest challenges faced by property sector. While many businesses have, for example, have matured consumer datasets over decades now, property data still faces several issues, including a lack of standardisation, blind spots, and a reliance on outdated methodologies.
Disclosures with unreliable property data leads to miscalculated emissions, mispriced assets, and misjudged climate risk. Companies that lag behind in terms of reporting and addressing these issues will be exposed financially, legally, and reputationally.
We’ve covered the issues with EPC data (the foundational property dataset) in depth, but it is worth noting here that calculating climate risk or financed emissions for the purpose of disclosures means collecting more data, understanding weaknesses in data sets, and recalibrating for accuracy.

It is of paramount importance that businesses in this space are able to understand the risks involved and use accurate data to represent their property-assets truthfully and reach more informed decisions.
Next steps
So where can the lenders and other property businesses get more accurate energy and emissions data for their climate-related financial disclosures in 2025 and beyond? Kamma has built the country’s most advanced dataset, creating an environmental profile for every property in the UK.
Download our financial disclosures infographic to learn how to get ahead on regulatory reporting and turn climate risk into revenue.
