Financial Stability Board and its working group, the Task Force, has published its recommendations for companies related to climate change and financial disclosures. This working group was established in December 2015 to set a voluntary, consistent disclosure for companies.
The 32 industry members of the Task Force, who are drawn from a wide range of industries and countries from around the globe, finalised the recommendations after extensive public engagement and consultation, including public consultation on a draft of the recommendations in December 2016.
The TCFD developed four recommendations on climate-related financial disclosures that are applicable to organisations across sectors and jurisdictions. The recommendations are structured around four thematic areas:
- Governance: The organisation’s governance around climate-related risks and opportunities
- Strategy: The actual and potential impacts of climate-related risks and opportunities on the organisation’s businesses, strategy, and financial planning
- Risk Management: The processes used by the organisation to identify, assess and manage climate-related risks
- Metrics and Targets: The metrics and targets used to assess and manage relevant climate-related risks and opportunities
In a joint statement, the TaskForce leaders say: “We encourage other business leaders to join us in this united effort to improve disclosure across sectors and regions. The Task Force’s recommendations will catalyze more consistent, comparable, and reliable disclosure of climate-related information that will facilitate more informed business and investment decision-making. These disclosures are an important step forward in enabling market forces to drive efficient allocation of capital and support a smooth transition to a low-carbon economy.” This private-sector TaskForce was chaired by Michael R. Bloomberg.
The signatories include for example companies like Aviva, Bank of America, Barclays, BNP Paribas, Borsa Italiana, London Stock Exchange, Calpers, Citigroup, Deloitte, EY, KPMG, PWC, ING Group, Moody´s, S&P and UBS Group.
The recommendations are backed by over 100 companies with market capitalisations of over 3,3 trillion US dollars and financial firms responsible for assets of more than 24 trillion US dollars.
The Financial Stability Board promotes international financial stability; it does so by coordinating national financial authorities and international standard-setting bodies as they work toward developing strong regulatory, supervisory and other financial sector policies.