Close to 400 companies support the Task Force on Climate-related Financial Disclosures as of August 2018
By Elisa Jiménez Alonso
Since the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD), chaired by Michael Bloomberg, 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-related financial risks and opportunities in a consistent, comparable, reliable, clear, and efficient way in order to provide information to lenders, insurers, and investors. The recommendations are primarily aimed at organisations with public debt or equity, asset managers and owners, but also industry associations, central banks, governments, regulators, and others.
As the momentum around climate action increases, more and more companies around the globe are deciding to publicly support the TCFD recommendations. Public support provides a clear signal to companies’ investors, clients, and employees that they are tackling the implications of climate change on their business.
Publicly disclosing climate-related risks and opportunities ultimately provides better access to data that will enhance how those risks and opportunities can be assessed, priced, and managed. In doing so, companies can improve how they measure their own risks and investors can make better decisions on how and where to allocate their capital.
Acclimatise has been involved in advancing the TCFD recommendations with the European Bank for Reconstruction and Development (EBRD), in partnership with the Global Centre of Excellence on Climate Adaptation (GCECA). The work resulted in a report that provides practical guidance for corporates looking to disclose their risks and opportunities with regard to physical climate impacts.
Furthermore, our company, together with the UN Environment Programme Finance Initiative (UNEP FI) and 16 of the world’s leading banks, developed a set of methodologies for banks to assess physical climate risks in their loan portfolios, evaluating the impacts on key credit risk metrics – Probability of Default (PD) and Loan-to-Value (LTV) ratios. The forward-looking assessments offer longer-term insights that go beyond the usual stress-testing horizon of 2-3 years.