Task Force on Climate-Related Financial Disclosures
Task Force on Climate-Related Financial Disclosures
During the COP21 Paris Climate Change Conference, the Financial Stability Board (FSB) created the Task Force on Climate-Related Financial Disclosures (TCFD) to improve and increase reporting of climate-related financial information. Consistent company reporting helps financial market participants understand and manage their climate-related risks which are likely to grow over time.
Core Elements of TCFD Recommendations
The TCFD recommendations are structured around four thematic areas:
- Governance: Encourages effective thinking and awareness of the impact your organisation has on climate change.
- Strategy: Focuses on the impact of climate-related risks and opportunities on your organisation.
- Risk Management: Involves building on existing processes to identify, assess, and manage climate-related risks, adapting for future reporting requirements.
- Metrics and Targets: Requires collating necessary data to assess and manage relevant climate-related risks and opportunities.
Our Commitment
We are proud to announce the publication of our first TCFD report, marking a significant milestone in our commitment to transparency and proactive climate risk management. Working closely with our Fund Managers to collate relevant TCFD metrics, we have incorporated these insights into our comprehensive report which can be accessed below. This report reflects our commitment to early adoption of TCFD recommendations and provides detailed insights into our governance, strategy, risk management, and metrics and targets related to climate change.
Financial Impact
To allow us to make more informed financial decisions, our investors, lenders, and the Fund as an asset owner, need to understand the financial impact of climate-related risks and opportunities. The TCFD has identified several categories of climate-related risks and opportunities, including their potential financial impact, and companies need to consider what could have a material financial impact in the short, medium, or long term of their strategies.
Continuous Improvement
The transition to a lower carbon economy requires transparency in reporting these risks and opportunities. Consistent production of TCFD report metrics and targets over time will allow for trend analysis and easily determine if targets are being met and improvements are being made.
Reporting of these measures will continue to evolve as more organisations contribute and their reports are analysed, allowing the information to become more consistent and standardised, improving the quality of data.
The Fund continues to be an active asset owner, engaging with our Fund Managers on Environmental, Social and Governance (ESG) issues and discussing our requirements for reporting as per the TCFD recommendations.