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INTEROPERABILITY AND HARMONIZATION BETWEEN STANDARDS The architecture of the globally endorsed standard for climate change-related disclosures developed by the Task Force on Climate-Related Financial Disclosures (TCFD) informs the structure of both ESRS and the ISSB standards, providing a foundation for interoperability. The TCFD recommendations have been fully integrated into the climate change-related disclosure standards, ESRS E1 and IFRS S2. From January 2024, the ISSB will take on the TCFD's monitoring responsibilities, signaling an important milestone in harmonization efforts. This comes after the consolidation under the ISSB of the Climate Disclosure Standards Board (CDSB) and the Value Reporting Foundation (VRF), which in turn incorporates the Integrated Reporting Framework and the SASB Standards. In the United States, the Securities and Exchange Commission (SEC) is also basing its upcoming climate disclosure rules on TCFD. In its March 2022 proposal, the SEC says TCFD will make corporate climate risk reporting more "consistent, comparable, and reliable". TCFD --------- ALL STANDARDS FINAL OUTLOOK ON CONVERGENCE Most companies already issue some form of sustainability report. In the U.S. that has largely been market-driven, often reporting metrics and information under the SASB and GRI standards, TCFD, UN SDGs, etc. So whether or not the SEC issues rules on climate disclosure and other sustainability topics, it is likely that the market-driven voluntary reporting will continue. Furthermore, under the current CSRD schedule, U.S. companies with significant operations in the EU will in five years also be reporting under the ESRS for their EU operations or even on a consolidated basis. Within five years, the ISSB will have issued a number of standards that may increasingly be adopted by companies and mandated by countries around the world. Many countries have already signaled their intention to incorporate the ISSB standards into new or existing regulations. Hopefully, there will be significant interoperability between the standards and national and jurisdictional requirements, reducing the implementation and cost burden for companies and facilitating comparability for investors. CDP --------- ISSB CDP will incorporate the ISSB climate-related disclosure standard into its global environmental disclosure platform starting from 2024 onwards. Amid this major development, companies disclosing through CDP, the non-profit organization operating the global environmental disclosure system, are already well-prepared for the new mandatory corporate reporting standards. Sustainability & Energy Management Simplified

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