Climate Disclosure Standards Board Initiative Showcases Companies Committed To Climate-Risk Disclosure

The Climate Disclosure Standards Board has this week launched a new initiative which aims to showcase those companies committed to implementing the voluntary climate-risk disclosure recommendations of the G20 Task Force on Climate-related Financial Disclosures.

The Climate Disclosure Standards Board (CDSB) — an international consortium of businesses and environmental NGOs launched back in 2007 — this week announced that it was launching a new initiative designed to showcase “forward-thinking businesses” who are adopting the recommendations set out late-June by the G20 Task Force on Climate-related Financial Disclosures’s (TCFD) — which was chaired by Michael R. Bloomberg, and established in December, 2015, by the Financial Stability Board in an effort to “develop a set of voluntary, consistent disclosure recommendations for use by companies in proving information to investors, lenders, and insurance underwriters about their climate-related financial risk.”

The TCFD developed four key recommendations on climate-related financial disclosures that it believes are applicable across sectors and jurisdictions, and which were structured around four themes (PDF):

• Governance: The organization’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.

“Climate change presents global markets with risks and opportunities that cannot be ignored, which is why a framework around climate-related disclosures is so important,” said Michael Bloomberg at the release of the recommendations. “The Task Force brings that framework to the table, helping investors evaluate the potential risks and rewards of a transition to a lower carbon economy. We’re pleased to see so many businesses and investors around the world support the recommendations of the TCFD and hope others will be encouraged to join our initiative.”

The new initiative launched this week by the Climate Disclosure Standards Board intends to highlight those businesses which are voluntarily accepting these recommendations, in an effort to provide a display of “how the first movers in this space will be practically adopting the recommendations, reporting for the first time on a common and comparable basis to their investors.” Companies that sign up to the initiative will commit to report their climate-related financial information by 2020, and will further encourage other companies to use the “CDSB Climate Change Reporting Framework to implement the recommendations, therefore disclosing climate information in mainstream reports, as defined by the TCFD recommendations.”

“This initiative provides a platform that will help companies find the support they need to collect, prepare and disclose this type of information, while showcasing the leadership of those who will report on climate risks with adequate rigour for the first time,” said Richard Samans, Chairman, Climate Disclosure Standards Board. “Adopting the TCFD recommendations will contribute to the creation of more efficient, climate-resilient markets.”