Financial board issues new guidance to help firms release climate-related information

The Financial Stability Board's program to encourage companies to release climate-related information announced new guidance, aiming to help companies disclose plans for a net zero transition with more cross-industry metrics, the global financial organization reported.

The Task Force on Climate-related Financial Disclosures, or TCFD, established by the Financial Stability Board, published its 2021 Status Report late on Thursday.

The Task Force found that disclosure in line with the TCFD's recommendations has accelerated over the past year, up by 9 percentage points from 2019 to 2020, compared to the 4 percentage point growth from 2018 to 2019.

It reviewed more than 1,650 companies' reports, from 69 countries and jurisdictions in eight industries. About 83 of the world's largest 100 companies now support or report in line with the TCFD's recommendations, the report said.

Liu Ruixia, chief expert of the Task Force of Climate Risk Management at Industrial and Commercial Bank of China, witnessed the effort and progress made by Chinese banking industry in the area of green and low-carbon transition.

Chinese regulators encourage financial institutions to support TCFD. As the country's largest bank by asset, ICBC is the one of the first supporters of TCFD, and other banks, including China Construction Bank, Bank of China, Bank of Communications and Postal Savings Bank of China, have announced their support of the project this year, according to Liu.

More financial institutions have incorporated climate risk into the enterprise risk management, and are working on optimizing the credit portfolio. And an increasing number of institutions are improving their climate-related disclosure under the so-called "four pillars of governance" - strategy, risk management, metrics and target laid out in TCFD recommendations, Liu added.

"When companies disclose clear, consistent and accurate information on the risks they face from climate change, investors and business leaders can make more informed and sustainable financial decisions. That strengthens our global economy, improves health, and helps address the climate crisis," said Michael Bloomberg, chair of the Task Force and founder of Bloomberg LP and Bloomberg Philanthropies.

FSB Chair Randal Quarles said that "Consistent and comparable disclosures are foundational for enabling accurate risk assessment. The TCFD recommendations have become widely supported by the private and official sectors as the basis for climate-related disclosures, and this year's report shows further momentum but also where disclosure gaps remain."