Assessing and disclosing climate-related financial risk

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Physical climate risk has emerged as a prominent threat to the financial sector and the global economy. Understanding investments’ exposure to risk from climate hazards is a critical step toward building resilience.

Since the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD) presented its final recommendations at the G20 summit in July 2017, almost 400 companies have expressed their support. The TCFD recommendations offer a set of guidelines for companies to voluntarily disclose their climate change-related financial risks.
Acclimatise
Lindsay Ross

Material impacts of climate change

2018

This report from the UK House of Commons Environmental Audit Committee provides an overview of the risks of climate change on financial institutions in the UK, with a particular focus on the impact of these risks on financial decision-making across the

Parliament of the United Kingdom
TCFD is spurring regulation and there is an increasing appetite among investors for companies to disclose financial risks. However, businesses are struggling with assessing how their models compare to a 2°C climate scenario, as well as implementing the recommendations about how the information on disclosures should be included in their reporting structure.
Ethical Corporation
2018

The purpose of this document is to provide a short and handy reference for investors on the basic concepts of climate resilience and to signpost a number of tools and resources relating to its management.

Section 1 outlines the core concepts of climate

Investor Group on Climate Change
The government has unveiled a newly updated strategy designed to prepare the UK for the most pressing climate risks over the next five years by tackling water shortages, flooding, soil erosion and overheating. For the first time, the strategy is integrated with plans to encourage infrastructure operators to report on their climate adaptation plans.
Business Green - Incisive Media Investments Limited 2010
The One Planet Sovereign Wealth Fund Working Group has published a climate change framework, which has a goal of promoting the integration of climate change analysis in the management of long-term and diversified asset pools. It also aims to identify climate-related risks and opportunities in investments and enhance investment decision-making frameworks.
International Forum of Sovereign Wealth Funds
2018

This document outlines an environmental, social and governance framework to address climate change issues, including the development of methods and indicators that can inform investors’ priorities as shareholders and participants in financial markets

International Forum of Sovereign Wealth Funds
Sixteen banks, UN Environment Finance Initiative and Acclimatise, have published new methodologies that help banks understand how the physical risks and opportunities of a changing climate affect their loan portfolios. Using the methodologies, banks can assess physical climate risks in their loan portfolios, evaluating the impacts on key credit risk metrics.
Acclimatise
2018
This report is the result of a collaboration between sixteen of the world’s leading banks with UN Environment Finance Initiative (UNEP FI), and climate risk and adaptation advisory firm Acclimatise.
UNEP Finance Initiative Acclimatise