Too few companies specify their potential financial impact of climate change as part of a voluntary global disclosure code that requires broader support from asset managers and others to be fully effective, said Thursday. a global regulator.
Climate change can reduce the value of assets or subject companies to the costs of flooding and other weather events, and a body dubbed the Climate-Related Financial Disclosures Task Force (TCFD) in 2017 released a set voluntary disclosures to help educate investors. .
The TCFD, set up by the Financial Stability Board (FSB) which coordinates financial rules for G20 countries, said more than 1,500 organizations around the world have expressed support for disclosures aligned with the TCFD to help reduce carbon emissions, up 85% since last year’s update.
But the level of disclosure remains insufficient, he said.
“Disclosure by companies of the potential financial impact of climate change on their businesses and strategies remains low,” said TCFD.
Only one in 15 companies reviewed disclosed information about the resilience of their strategy, well below other disclosure categories such as governance and risk management, he added.
Further support was needed given the urgent demand for consistency and comparability in reporting, with support from asset managers and asset owners likely to be insufficient to give investors the right information, he said. he declares.
The TCFD will seek to better understand the reporting practices of asset managers and asset owners.
Ahead of the next round of global climate talks in Scotland next year, there is a growing expectation that the code will become binding, as a Bank of England official said this month.
The TCFD also published a consultation document aimed at making the code more forward-looking for banks, insurers and asset managers.
He identified a potential endpoint known as the implicit temperature rise associated with investments or RTI. This is already used by some companies to estimate the global temperature rise associated with the greenhouse gas emissions of a company, investment strategy or fund.
There are several ways that ITR could be useful, but faces several significant challenges in calculating it more consistently, TCFD said.
(Additional reporting by Simon Jessop; editing by David Holmes)
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