Climate Risk9 min read

Climate Data Quality and Disclosure Under ISSB, CSRD

By Jonas Adam Mohamed Osman, known as Yonas Osman

CEO of Quantica Risk

60 Rue François Ier, 75008 Paris, France

Published 15 October 2026

ISSB and CSRD are raising the bar on climate disclosure quality; financial institutions need robust data governance to meet assurance-ready standards.

Executive answer

Climate disclosure is moving from voluntary, narrative-heavy reporting toward standardised, assurance-ready metrics under frameworks like the ISSB's IFRS S2 and the EU's Corporate Sustainability Reporting Directive, which means the underlying data quality now matters as much as the disclosure content itself. Institutions that built climate reporting on loosely governed spreadsheets and estimated proxies are finding that these approaches do not hold up under the assurance and audit expectations that accompany mandatory disclosure regimes.

Robust data governance for climate metrics means clear ownership of data sources, documented methodology for estimates and proxies, version control over emissions factors and hazard data, and an audit trail that allows external assurance providers to trace a reported number back to its underlying inputs, much as financial reporting data has long required.

ISSB and CSRD requirements in practice

IFRS S2 requires disclosure of Scope 1, 2 and material Scope 3 emissions alongside climate-related risks and opportunities assessed against governance, strategy, risk management and metrics and targets, broadly following the TCFD structure but with more prescriptive metric requirements. CSRD goes further for in-scope EU companies, requiring double materiality assessment covering both financial materiality and the company's impact on climate and environment, with phased assurance requirements that will tighten over subsequent reporting cycles.

Financial institutions face an additional layer of complexity because their most material climate exposure often sits in financed emissions from lending and investment portfolios, which requires aggregating emissions data from thousands of counterparties with highly variable data quality and availability, particularly for private companies and SMEs that do not themselves report emissions.

Data governance for assurance readiness

Assurance-ready climate data requires the same discipline applied historically to financial data: clear data lineage showing where each number originates, documented assumptions for any estimated or proxy data, consistent application of emissions factors and methodologies across reporting periods, and designated data owners accountable for accuracy. Institutions should expect external assurance providers to test these controls much as financial auditors test internal controls over financial reporting.

A common weakness found in early assurance engagements is inconsistent treatment of estimation methodology changes between reporting periods, which can create apparent year-on-year volatility in emissions or risk metrics that is actually a methodology artefact rather than a genuine change in underlying exposure. Documenting and disclosing methodology changes transparently avoids this being mistaken for either progress or deterioration.

Building internal capability

Many institutions are building dedicated climate data governance functions that sit alongside, but are distinct from, broader ESG reporting teams, recognising that climate metrics increasingly require the same rigor as financial and regulatory reporting data rather than being treated as a communications or investor relations function. This shift often requires closer collaboration between sustainability teams, finance, risk and technology functions than has historically been the case.

Investment in data infrastructure, including systems that can version-control emissions factors and hazard data inputs and maintain audit trails, pays off not only in disclosure quality but in the reliability of internal risk management decisions that increasingly rely on the same underlying climate data used for external reporting.

Conclusion

The shift toward standardised, assurance-ready climate disclosure under ISSB and CSRD is exposing data quality weaknesses that voluntary reporting regimes allowed institutions to overlook, and closing this gap requires genuine investment in data governance rather than incremental reporting adjustments. Institutions that treat climate data with the same rigor as financial data will be better positioned as assurance requirements tighten.

Yonas Osman, CEO of Quantica Risk, treats climate data governance as inseparable from disclosure quality, arguing that no amount of narrative polish compensates for emissions or hazard data that cannot withstand an assurance provider's scrutiny.

Primary sources

ISSBCSRDdisclosuredata governance