Climate-related financial disclosures
What do you do in a net-zero emissions world?
Climate change and associated climate policies provide significant implications for the economy. Under the Paris Agreement the world has committed to significantly reduce annual greenhouse gas emissions and agreed on a long-term pathway towards decarbonisation. The investments required to achieve this have already shifted investor expectations. In addition to the physical risks brought about by climate change, the value of high-carbon assets is in decline and investors are increasingly assessing the risks to these assets which climate policy may bring.
The Task Force for Climate-related Financial Disclosures (TCFD) makes sector-specific recommendations on how companies can voluntarily disclose climate-related financial risks, in orderto better inform their investors, lenders and insurance underwriters.
The TCFD’s strategic objective is to shift the focus from existing, backward-looking disclosure to a dynamic forward-looking approach that frames disclosure in terms of risk assessment and strategic decisions to cope with risk. The TCFD recommendations support communicating to investors how climate change-driven changes in an organisation’s physical, regulatory, commercial, legal operating environments may impact on its future financial performance.
The role of the board. We help develop a Statement of intended users and materiality which determines the extend to which your company wishes to adhere to the TCFD recommendations and identifies relevant stakeholders.
The role of management. We support management to develop and implement the necessary processes and internal measurement and control systems for implementing the TCFD recommendations.
We can help
Independent, objective analysis of risk management and forward-looking assessment of business vulnerability.
TCFD gap analysis
Systematic review of existing governance structures, management and control systems, and recommendations in terms of governance and metrics for the adoption of leading disclosures practices.
risk awareness & communication
Workshops and presentations to support understanding and communication of climate risk drivers and opportunities to the executive team, board, and investors. We help you articulate and unbundle material risks.
Identification of properties of future climate and weather extremes, non-physical risks and opportunities, as well as development of scenarios and resilience indicators.
How physical risks such as occasional events or longer-term climatic changes in temperature,precipitation and weather patterns impact on your business activities;
How your business may be exposed to non-physical, climate change-related risks
Government regulation – policies or regulations that impact financial and operational viability of assets;
Economic markets – changes in market conditions that would impact your assets;
Technology – commercial availability and feasibility of low-carbon technologies;
Public opinion – changes in public perception and expectations of companies and disclosed climate change action;
The interaction between physical and non-physical risks; and
How to move beyond a portfolio carbon footprint to determine asset risks. A carbon footprint can support understand exposure, but it cannot predict risk.