Investors are getting better information from companies about climate-related risks and opportunities, but few companies disclose the financial impact of climate change on the company, finds a report from the Task Force on Climate-related Financial Disclosures (TCFD) published Wednesday.
The Status Report, which is based on a survey of more than 1,7000 companies from diverse sectors with broad geographical representation, finds a majority of companies are already delivering disclosure that aligns with one or more of the TCFD recommendations, but those disclosures vary widely across industries.
For instance, the report finds that more non-financial companies report their climate-related metrics and targets than financial companies. Meanwhile, financial companies are more likely to disclose how they have embedded climate risk into overall risk management.
The survey also finds that relatively few companies disclose the financial impact of climate change on the company. Only a minority disclose forward-looking climate targets, or the resilience of their strategies under different scenarios, which is a key focus for the task force.
“The more companies know about the risks they face, the faster and more effectively they can address them — and the more they report that information, the better equipped investors will be to make smart decisions,” says Michael Bloomberg, TCFD chairman, in a statement.
The Financial Stability Board (FSB) welcomes the publication of the task force’s report. “Today’s announcement shows that climate-disclosure is becoming mainstream,” says Mark Carney, FSB chairman, in a statement.
Speaking about the report, Carney states: “More than 500 companies are now supporters of the TCFD, including the world’s largest banks, asset managers and pension funds, responsible for assets of nearly US$100 trillion.
“It is encouraging to see the task force’s group of supporters continue to grow. It will make the global economy more resilient and drive more capital to projects that are helping to reduce emissions and protect people from harm,” Bloomberg adds.