Commercially sensitive opportunities

The standards include a narrow-scope exemption from providing commercially sensitive information about sustainability-related opportunities, even if the information is material. There is no similar exemption relating to sustainability-related risks.

The exemption is available only when:

• the company has a competitive advantage because the information is not publicly available – e.g. via investor presentations or marketing materials; and
• it would be impossible to disclose the information without seriously prejudicing the economic benefits a company could otherwise realise from an opportunity. 

When companies are considering taking the exemption, they need to determine if they could resolve the issue by disclosing it in a different way – e.g. providing less granular information.

If this cannot be achieved, then a company can exclude a specific piece of information provided that it:

• discloses that it has taken the exemption for that piece of information; and
• reassesses at each reporting date whether the exemption remains appropriate.

What’s the impact?

This exemption protects companies’ commercially sensitive information about sustainability-related opportunities. At the same time, it provides investors with information about opportunities to understand how they impact the company’s prospects.

Companies will need to set up a process to assess what information meets the exemption criteria and to consider whether they can otherwise disclose the content at an aggregated level.

The exemption relates to opportunities only – no exemption is allowed for information about sustainability-related risks. Companies will need to structure disclosures carefully, for example where:

• this creates a disconnect between information on sustainability-related risks and any related opportunities; or
• information on a specific risk is required in sustainability-related financial information but not in the financial statements.