A government is choosing between making climate disclosures mandatory by law and issuing voluntary guidance. Which of the following is an advantage of mandatory regulation over voluntary guidance?

Correct answer: B) It improves consistency and comparability, because all entities in scope must report and cannot choose only favourable information

Explanation

Mandatory regulation creates a level playing field because every entity in scope must comply, which improves comparability and reduces selective reporting. However, it typically raises compliance costs and is slower to change than guidance. Letting companies choose their topics is a feature of voluntary approaches.