To help identify the data and information needed by investors, lenders, and insurance underwriters to appropriately assess and price climate-related risks and opportunities, the Financial Stability Board (FSB) established an industry-led task force to develop disclosure recommendations: The Task Force on Climate-related Financial Disclosures (TCFD).
The TCFD was asked by the leading industrial nations to develop voluntary, consistent climate-related financial disclosures that would be useful to investors, lenders, and insurance underwriters in understanding material risks.
The 32-member Task Force is global by representation; its members were selected by the Financial Stability Board and come from various organizations, including large banks, insurance companies, asset managers, pension funds, large non-financial companies, accounting and consulting firms, and credit rating agencies.
FROM OUR PARTNERS AT DFIN SOLUTIONS:
“The State of Climate Risk Disclosure: A Survey of US Companies” – was just published by our partners DFIN, in collaboration with the writing team of Richard Mahony and Diance Gargiulo and research from The Society for Corporate Governance (“The Society”). The report looks at the evolution of climate-risk disclosure and the state of readiness of corporations to disclose this information.
In partnership with The Society, DFIN conducted a survey of its members on these issues. The results confirmed many of the observations made by the TCFD in its recent update, while also providing new insights into how companies are addressing the challenges associated with climate risk disclosure. (This builds on the earlier report published by DFIN as the TCFD was released – “Preparing for Climate-Risk Disclosure: Practical Suggestions for Public Companies”.)
The members of The Society for Corporate Governance were surveyed to benchmark what their companies are doing – looking at climate risk, by type; market cap of respondents; frequency of board room discussions on climate risk; use of reporting frameworks; investor queries to the company on climate risk; self assessment of the TCFD (recommendations) implementation; organization structure for climate risk disclosure; and, impediments to TCFD implementation.
The report offers practical steps for companies to take and lessons of the early adopters. Society members offering value-added perspectives include Val Smith at Citi; Michael Rubio at Chevron; and, Steve Lippman at Microsoft (these sharings are of interest for IROs, corporate secretaries & governance professionals, sustainability leaders at companies, and other professionals involved in the corporate sustainability journey).
The Society for Corporate Governance is comprised of governance professionals and business executives responsible for supporting boards and exec management. DFIN is a leading global risk and compliance solutions company providing expertise to public companies. G&A Institute partners with DFIN to serve corporate client needs with a range of sustainability services including climate change disclosure and reporting.