Banks should disclose lending to companies with carbon-related risks

  • New report by the Task Force on Climate-related Financial Disclosures (TCD), a G20 initiative led by Governor of the Bank of England and former Mayor of NYC Michael Bloomberg, outlines how companies should disclose climate-related information in their financial filings, with the aim of allowing economies to properly value climate-related risks

https://www.theguardian.com/environment/2017/jun/29/banks-should-disclose-lending-to-companies-with-carbon-related-risks-says-report

  • Report recommends that companies should disclose all of their direct and indirect greenhouse gas emissions, and describe the risks and opportunities caused by climate change under a range of potential scenarios
  • The TCFD was established at the COP21in Paris by the Financial Sustainability Board (FSB). The FSB was created by the G20 in the aftermath of the 2007-08 GFC
  • While banks have a shorter outlook than insurers, they have an important role in steering the entire economy – they need to know which are the sectors that have a high risk of stranded assets in the future and those with a low risk of stranded assets in the future
  • Chief executive of French pension fund ERAFP and vice chair of the UK’s Institutional Investor Group on Climate Change said: “The more companies report effectively on climate-related risks and opportunities, the easier it becomes for investors to allocateĀ the substantial amounts of capital required to implement the Paris Agreement and to work on their own climate.”
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