Task Force recommends climate change disclosure measures
Investors need greater information in order to respond to the challenge of climate change, Mark Carney and Michael Bloomberg write in an opinion piece in The Guardian, published to coincide with the launch of a consultation paper by the Task Force on Climate-related Financial Disclosures (TCFD). The Task Force was asked by the Financial Stability Board to create a series of “voluntary, consistent disclosure recommendations” through which investors can gain such information from companies. The TCFD will now run a consultation period until 12 February, during which companies, investors and financial institutions can respond to the recommendations.
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Ref no: 39/2016

The Financial Stability Board (FSB), today welcomed the publication of a consultation paper by the Task Force on Climate-related Financial Disclosures (TCFD) with recommendations for effective disclosure of climate-related financial risks.

The Task Force was asked by the FSB to develop a set of voluntary, consistent disclosure recommendations for use by companies in providing information to investors, lenders, and insurance underwriters about the financial risks companies face from climate change. The TCFD framework includes disclosures about the way firms consider the impact of climate change as part of their governance, risk management and strategy and sets out metrics and scenarios that firms should consider disclosing.

Speaking about the draft recommendations, FSB Chair Mark Carney said: “The disclosure recommendations will give financial markets the information they need to manage risks, and seize opportunities, stemming from climate change. As a private sector solution to a market issue, the Task Force has focused on the practical, material disclosures investors want and which all capital-raising companies can compile.”

The draft recommendations were launched at an event in London attended by Michael R. Bloomberg, Chair of the TCFD, other members of the Task Force and senior executives of a number of the firms that provided Task Force members.

Speaking at the event Michael R. Bloomberg said: “The Recommendations of the Task Force on Climate-related Financial Disclosures report represents an important effort by the private sector to improve transparency around climate-related financial risks and opportunities. Climate change is not only an environmental problem, but a business one as well. We need business leaders to join us to help spread these recommendations across their industries in order to help make markets more efficient and economies more stable, resilient, and sustainable.”

The TCFD’s consultation period runs for 60 days until 12 February. The FSB encourages publicly-listed companies, investors, financial institutions and other stakeholders to respond to the consultation.

The final TCFD recommendations will be presented to G20 Leaders in advance of their Summit in Hamburg in July. The FSB encourages the TCFD, following the publication of the final TCFD recommendations, to monitor and report on industry take-up of the recommendations.

On the launch of the consultation the firms that contributed Task Force members, with market capitalisations of $1.5 trillion and responsible for almost $20 trillion of assets, have provided statements of support to welcome the recommended disclosures and encourage take-up of the recommendations. The statements of support are available on the FSB and TCFD websites.

Notes to editors

The TCFD was established by the FSB in December 2015 after a request in April 2015 from the G20 for the FSB to work with the private sector to review how the financial sector can take account of climate-related issues. As part of this work the FSB concluded that appropriate disclosure is a prerequisite for the private sector to understand and measure the potential effects on the financial sector of climate change. The FSB therefore set up the TCFD as an industry-led body to develop voluntary disclosure recommendations. The TCFD consultation closes on 12 February. Responses to the consultation can be made via the TCFD website.

For media inquiries about the launch event please contact the TCFD Secretariat: info@fsb-tcfd.org.

The FSB has been established to coordinate at the international level the work of national financial authorities and international standard setting bodies and to develop and promote the implementation of effective regulatory, supervisory and other financial sector policies in the interest of financial stability. It brings together national authorities responsible for financial stability in 24 countries and jurisdictions, international financial institutions, sector-specific international groupings of regulators and supervisors, and committees of central bank experts. The FSB also conducts outreach with 65 other jurisdictions through its six regional consultative groups.

The FSB is chaired by Mark Carney, Governor of the Bank of England. Its Secretariat is located in Basel, Switzerland, and hosted by the Bank for International Settlements.