The climate crisis in the Israeli capital market: too little, but not too late

Climate change is no longer only an environmental or scientific concern, it has become a material business risk that directly affects public companies, investors, and capital markets. As global markets increasingly demand reliable ESG and climate-related information, many jurisdictions have moved toward mandatory and standardized sustainability reporting. Israel, however, continues to rely mainly on a general and insufficient disclosure requirement regarding environmental risks. As a result, Israeli companies often publish partial, inconsistent, and non-comparable ESG reports, leaving investors without the information needed to properly assess climate-related risks and opportunities.

A comparison between Israeli companies and foreign companies reveals significant gaps in climate reporting, emissions disclosure, governance structures, and long-term commitments such as Net Zero targets. These gaps also affect international ESG ratings, access to foreign investment, and the competitiveness of the Israeli capital market. While the European Union has already adopted broad mandatory reporting and due diligence frameworks, and IFRS sustainability standards are gaining global traction, Israel remains behind.

The article argues that effective change requires clear, binding reporting rules alongside meaningful enforcement. Without reliable, uniform, and comparable climate disclosure, Israeli companies and investors will continue to operate at a disadvantage in the global market.

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