Reporting Climate Resilience: The Challenges Ahead
Climate change is exposing businesses to new and unpredictable strategic and operational risks. Not unsurprisingly, stakeholders are looking for greater transparency on the implications of climate-related events and trends for an organization’s financial performance.
As a result, organizations are making efforts to better understand how climate change is impacting the organization, and to assess their resilience to these changes. This new focus on climate resilience represents a major shift in thinking for most organizations, however, and many are unsure where to start.
Enter the Financial Stability Board’s (FSB) Task Force on Climate-Related Financial Disclosures (TCFD). Established by Mark Carney and Michael Bloomberg, the TCFD created a set of recommendations to help organizations disclose information on climate-related risks and opportunities in a consistent, comparable and reliable way.
Though the recommendations are voluntary, one year since their release in June 2017, the push for increased climate risk disclosure is rapidly growing with support from the investor community, associations, companies, and policy makers.