Collaboration leads to new guidance for users and all professionals interested in Climate-Related Financial Disclosures (TCFD 1)

Corporate reporting can have a central role in supporting climate change transitions. To fully reach this potential, reporting in line with TCFD requirements (Task Force on Climate-related Financial Disclosures) will benefit from wide stakeholder interest, along with professional contributions. New guidance has been launched today to help this engagement.

The new guide has been produced by a joint working party set up by the Institute and Faculty of Actuaries (IFoA) and Institute of Environmental Management & Assessment (IEMA). Commenting on the initiative, Louise Pryor who chaired the joint working party stated:

“IFoA members and IEMA sustainability professionals are ideally placed to bring their complementary experience to bear on this important issue. Actuaries’ expertise allows them to identify and manage long-term risk and these skills can play a vital role in driving the TCFD’s recommendations. This guide is designed for users of climate related disclosures and reflects the type of fruitful collaboration between specialists that is becoming increasingly necessary as we respond to the nature of the systemic risks that the world is currently facing. I would like thank all those involved.” 

     Louise Pryor, IFoA President-elect and IEMA fellow

Written to support all users of climate-related financial disclosures, the guide will help a wide range of stakeholders, from risk management specialists and sustainability practitioners, from investors, lenders and insurers, through to interested members of the public. IEMA Fellow Paul Pritchard, a member of the working party said:

“We are facing a potentially existential risk with huge associated uncertainties that challenges existing financial risk methodologies. The appropriate response must surely involve building on the capabilities of current financial risk models to develop approaches, transparently drawing on a whole range of skills and experience”.

The guide will be freely available here and we are running a webinar for the launch with discussions led by leading authors Louise Pryor and Paul Pritchard on Friday 10th July at 10am.

Further background –

In June 2017, the Task Force on Climate-related Financial Disclosures (TCFD), established by the Financial Stability Board (FSB), published recommendations aimed at helping organisations of all types to assess and communicate key climate-related information. More and more organisations are supporting TCFD or preparing disclosures, including national governments, state level ministries, central banks, regulators, stock exchanges, credit rating agencies, asset managers, asset owners, banks, and companies in sectors such as chemicals, energy, insurance, metals and mining, oil and gas, and transportation.

There are now more than 1000 organisations globally now supporting the TCFD recommendations2. These include national governments (Belgium, Canada, Chile, France, Japan, Sweden and the United Kingdom), government ministries, central banks, regulators, stock exchanges, credit rating agencies, asset managers, asset owners, banks, and companies in sectors such as chemicals, energy, insurance, metals and mining, oil and gas, and transportation.

Many stakeholders are increasingly using these disclosures to gain insights into the organisations’ responses to climate risk. If you are one of those stakeholders, this guide aims to help you understand what to look for in the disclosures so that you can draw valid and robust conclusions. It also identifies potential questions to help you in probing the disclosures or following up with the organisation that has produced them.

Further published statements received about the guide:

  1. "It is highly encouraging to see actuaries and sustainability professionals collaborate and share their complementary knowledge to support users of climate-related financial disclosures. The easy to follow format of the guide will support users to greater understand and challenge disclosures, enabling them to play a role in encouraging consistent, decision-useful and forward-looking information on the material financial impacts of climate-related risks and opportunities from all organisations, across all sectors. "

Russell Picot, Special Advisor to the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD)

  • “Quakers in Britain have led the way since 2011 in divesting charitable funds from fossil fuel extraction companies as part of becoming a low-carbon, sustainable community.  Quakers welcome moves towards requirements for corporate disclosure and campaign for greater transparency.  This guide for the users of companies’ climate-related disclosures will be very valuable in terms of helping Quakers and others to challenge companies in constructive and informed ways.”

Chris Martin, Central England Quakers.


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