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EnvironmentDriving Sustainable FinanceTask Force on Climate-Related Financial Disclosures

Task Force on Climate-Related Financial Disclosures

Climate change not only poses serious threats to communities, but also deeply impacts businesses, creating financial risks that must be integrated into business models as we transition to a clean energy economy. With this in mind, the Financial Stability Board (FSB) formed the Task Force on Climate-related Financial Disclosures (TCFD) in December 2015, choosing 32 members from across the G20, covering a range of economic sectors and financial markets. Spearheaded by FSB Chairman and Bank of England Governor Mark Carney and chaired by Mike Bloomberg, in 2017 the Task Force issued recommendations to help companies disclose information designed to help lenders, insurers, and investors better assess climate-related risks and opportunities, driving capital towards more sustainable investment.

The Task Force’s recommendations called for companies to disclose:

  • Governance around climate-related risks and opportunities
  • The impact of climate-related risks and opportunities on business strategy
  • The assessment and management of climate-related risk
  • The metrics and targets used to assess and manage climate-related risks

The TCFD released its recommendations in June 2017. As of June 2019, more than 800 organizations, representing over $9 trillion in market capitalization, have endorsed them.

These recommendations have been widely supported by industry leaders. To date, more than 1,700 companies and organizations in nearly 80 countries on six continents have endorsed or adopted TCFD reporting guidelines. Ten national governments – including the UK, New Zealand, and Switzerland – have committed to making risk disclosure along TCFD guidelines mandatory along with 750+ financial firms representing $15 trillion in total market cap and $160 trillion in AUM. The growing momentum can be seen in greater detail in TCFD’s 2020 status report.

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Top photo: Mike Bloomberg speaks alongside Mary Schapiro and Bank of England Governor Mark Carney during the inaugural One Planet Summit in Paris, France in December 2017.