Commercial, GHG Emissions, Industrial, Commercial, Finance, Industrial  -  December 15, 2016

Bloomberg-led task force issues recommendations for corporations to report climate-related financial risks

A new set of recommendations intended to help businesses better disclose climate-related financial risks and opportunities were released Dec. 14 by the task force launched by the Financial Stability Board and led by former New York City mayor and billionaire Michael Bloomberg. 

The Task Force on Climate-related Financial Disclosures, or TCFD, was established about a year ago with members that are private sector experts and users of corporate financial disclosures. Their report marks the first official set of global recommendations for "voluntary, decision-useful, climate-related disclosures to be made as part of mainstream financial filings." 

The recommendations, issued Dec. 14 for public consultation, are intended to help organizations identify and disclose information needed by investors, lenders and insurance underwriters to appropriately assess and price climate-related risks and opportunities. In a news release, the task force said the report focuses on four thematic areas that generally reflect how organizations operate: governance; strategy; risk management; and metrics and targets.

"We've operated with the knowledge that climate change is not only an environmental problem, but a business challenge as well," Bloomberg said in a video message announcing the report. "Investors are increasingly asking what climate change means for financial markets. They're asking questions about how well organizations are identifying and managing risks and opportunities in the transition to a lower carbon economy."

Key features of the recommendations, available here, include: 

• Adoptable by companies of all types, across sectors and jurisdictions
• Designed for inclusion in mainstream financial filings
• Elicit decision-useful, forward-looking information on climate-related financial impacts
• Include describing the potential impact of different scenarios (including a 2°C scenario) on the organization’s businesses, strategy, and financial planning
• Increase focus on risks and opportunities related to a transition to a lower-carbon economy

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