LONDON, 29th June, 2017: CDP, which began securing environmental disclosure from companies in 2002, today welcomes the FSB Task Force on Climate-related Financial Disclosures (TCFD) recommendations to integrate climate information into mainstream financial filings. The report out today calls for increased governance which will bring climate change more squarely into the boardroom. CDP is supporting the rapid global scale adoption of the recommendations to ensure enhanced climate risk management for both companies and investors.
Paul Simpson, CEO of CDP said: "This is a landmark day in the drive for better management of climate risk through capital markets. The TCFD recommendations are a springboard to delivering the commitments of the Paris Agreement. Embedding climate information in all corporate financial filings will engage boards around the world. This will enable better understanding of climate exposures and better planning and preparedness for a well-below 2°C world. Last year nearly 6000 companies disclosed through CDP on climate change and we look forward to helping them implement the TCFD recommendations. The TCFD's leadership will act as a further 'enabler' for companies and investors in the push for a sustainable economy. As a next step, we would encourage the G20 to look at mandating regulatory disclosure."
The Task Force’s Report clarifies reporting requirements for companies at financial risk from climate change effects for the benefit of lenders, insurers, investors and other stakeholders. In particular, CDP welcomes the Task Force’s recommendations to:
- Integrate climate-related information in their mainstream financial reports. This will bring climate change further into the boardroom as every board must consider and sign off on their mainstream filings. It will also allow investors to access the information they need in a consistent and comparable way, and will prove to all stakeholders that companies doing so are disclosing climate risk information with the same rigor as financial information;
- Encourage both financial and non-financial organizations to adopt the recommendations, thereby closing the loop on climate risk in capital markets. We recognize the crucial role they will play in ensuring the transition to a low-carbon economy, as their leadership will drive the development of more sustainable economic systems;
- Recommend all companies to describe the potential impact of different scenarios, including a 2°C or lower scenario, and disclose the resilience of the organization’s strategy, bringing the ’future’ of climate risk into the present. At the recent Exxon AGM, we saw investors voting to prioritize climate disclosure and demonstrating portfolio resilience through a 2°C scenario. This represents a new reality for Exxon’s management and demonstrates another shift to generate the environment for change and innovation.
Jane Stevensen, Engagement Director at CDP to the Task Force, said: “Climate change is both a business risk and opportunity. Rapidly changing markets are driving low-carbon technologies and creating job and investment opportunities. There are added value benefits of understanding the physical and transitional risks associated with climate change. By addressing them, companies can cut liabilities and reduce costs across operations and supply chains. Companies on CDP's 'Climate A List' outperformed the market by 6% over four years. Company and investor momentum is irreversible. With the TCFD as a blueprint and our own platform and frameworks in place we can now map progress to a well below 2 degree world."
CDP is the only organization that has publicly committed to adopting and implementing the Task Force recommendations across all sectors. We will continue to ask the relevant climate questions on a global platform and analyze the responses across sectors to provide enhanced insights to both companies and investors to enable better planning for the transition to a low-carbon economy.
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For more information or for exclusive interviews with the CDP team, please contact:
Claire Barraclough, CDP | [email protected]
Rojin Kiadeh, CDP t: +44 (0) 203 818 3912 | e: [email protected]
About CDP:
CDP is an international non-profit that drives companies and governments to reduce their greenhouse gas emissions, safeguard water resources and protect forests. Voted number one climate research provider by investors and working with institutional investors with assets of US$100 trillion, we leverage investor and buyer power to motivate companies to disclose and manage their environmental impacts. Nearly 6,000 companies with some 60% of global market capitalization disclosed environmental data through CDP in 2016. This is in addition to the over 500 cities and 100 states and regions who disclosed, making CDP’s platform one of the richest sources of information globally on how companies and governments are driving environmental change. CDP, formerly Carbon Disclosure Project, is a founding member of the We Mean Business Coalition. Please follow us @CDP to find out more.
About CDSB:
The Climate Disclose Standards Board (CDSB) Secretariat has been hosted by CDP since its inception on behalf of its Board members. The CDSB Framework and CDP’s platform offer a complete system for climate and environmental disclosure, providing companies with a complete disclosure package for the implementation of the TCFD recommendations.
CDSB is an international consortium of business and environmental NGOs. We are committed to advancing and aligning the global mainstream corporate reporting model to equate natural capital with financial capital. We do this by offering companies a framework for reporting environmental information with the same rigor as financial information. Collectively, we aim to contribute to more sustainable economic, social and environmental systems. www.cdsb.net