The Financial Stability Board’s Task Force on Climate-related Disclosure has “seen significant momentum around adoption of and support for its recommendations” for firms to develop more effective climate-related financial disclosures, according to its 2020 status report released today. The number of organizations expressing support for the TCFD has grown more than 85% in 15 months, and includes, among other things, financial institutions responsible for assets totaling $150 trillion.
Disclosure increased on average across the 11 recommended disclosures by six percentage points between 2017 and 2019, TCFD found. The energy sector led the way with the highest average percentage of disclosure by industry in fiscal year 2019 (40%), while the average percentage of disclosure by banks was 23%. TCFD noted that while disclosures were trending upward, more work is needed and that “companies’ disclosure of the potential financial impact of climate change on their businesses, strategies, and financial planning is low.”
In addition, the TCFD published guidance on integrating climate-related risks into existing risk management processes and a public consultation on forward-looking climate metrics for financial firms. Comments on the consultation will be due Jan. 27.