The Financial Stability Board set up the task force in December last year as part of a request by the G20 that it work with the private sector to review how the financial sector can take account of climate-related issues. As part of this work the FSB said it concluded that appropriate disclosure is a prerequisite for the private sector to understand and measure the potential effects on the financial sector of climate change.
Michael R. Bloomberg, chairman of the task force said: “The Recommendations of the Task Force on Climate-related Financial Disclosures report represents an important effort by the private sector to improve transparency around climate-related financial risks and opportunities. Climate change is not only an environmental problem, but a business one as well. We need business leaders to join us to help spread these recommendations across their industries in order to help make markets more efficient and economies more stable, resilient, and sustainable.”
Following the Paris climate change agreement made in December 2015 the task force said there needed to be more awareness that the effects on businesses of climate change were not just long term and that companies were facing risks today. The task force said that while changes associated with a transition to a lower-carbon economy present significant risks, they also create significant opportunities for a broad range of organisations focused on climate change mitigation and adaptation solutions.
The task force said its recommendations aimed to be adoptable by companies of all types, across sectors and jurisdictions; were designed for inclusion in mainstream financial filings; aimed to provide forward-looking information on climate-related financial impacts which would enable companies to make the right decisions for the futur; include describing the potential impact of different scenarios (including a 2°C scenario) on the organisation’s businesses, strategy, and financial planning and provided an increased focus on risks and opportunities related to a transition to a lowercarbon economy.
The recommendations are open to consultation until 12 February 2017.