The FSB’s Taskforce for Climate-related Financial Disclosures today published their recommendations for how companies and financial institutions should disclose information about climate risks, reacting to the growing threat of climate change.
E3G, a leading independent climate and energy think tank, said that the report of the Taskforce marks a major step forward in the effort to manage a changing climate. It recognises that climate change poses a systemic risk to the global financial system on which our economies depend.
But E3G calls for the recommendations, which are currently voluntary, to become mandatory. Choosing a voluntary route risks companies continuing to hide from investors the impact climate change is likely to have on their organisation.
The recommendations of the Taskforce are a welcome move in the battle to give investors the information they need
Ingrid Holmes, Director of E3G said:
“The recommendations of the Taskforce are a welcome move in the battle to give investors the information they need to properly identify, price and manage material climate risks. However, only mandatory reporting will provide the comprehensive coverage both investors and financial regulators need to prevent climate disasters becoming financial disasters.
The obvious next step must be for governments and regulators to turn these voluntary reporting requirements into mandatory ones.”
Sam Maule, Policy Advisor at E3G added:
“Ensuring proper reporting of climate risks is essential to the success of the EU’s forthcoming Sustainable Finance review. The report’s recommendations must be embraced by the EU’s new High Level Expert Group on Sustainable Finance.”