The Financial Stability Board (FSB) has launched a private sector-led task force that will develop voluntary risk disclosures for companies to inform lenders, insurers, investors and other stakeholders of their exposure to climate change-related risks.
4 December 2015: The Financial Stability Board (FSB) has launched a private sector-led task force that will develop voluntary risk disclosures for companies to inform lenders, insurers, investors and other stakeholders of their exposure to climate change-related risks.
Developed in response to a G20 request to the FSB regarding climate risk exposure in the private-sector, the initiative was officially launched on the sidelines of the 21st session of the Conference of the Parties (COP 21) to the UNFCCC. The Task Force on Climate-related Financial Disclosures (TCFD) will develop recommendations for consistent and comprehensive disclosure of information necessary to understand climate-related risks including: physical risks, such as damage from extreme weather and sea-level rise; liability risks; and transition risks arising from the adjustment of the financial sector to climate change.
The Task Force aims to develop a consensus on the characteristics of effective disclosure schemes and examples of good practices, taking into account existing disclosure schemes on climate change and sustainability issues. During the first stage of its work until March 2016, the Task Force will develop its scope and high-level objectives, followed by the development of specific recommendations for voluntary disclosure principles during the second phase, which is expected to be completed by the end of 2016.
The Task Force will follow the model of the FSB Enhanced Disclosure Task Force, a private-sector led group supporting the preparation of banks’ financial statements. Led by the UN Secretary-General’s Special Envoy for Cities and Climate Change, Michael Bloomberg, the Task Force will comprise up to 30 members from financial and non-financial companies that are FSB members.
The FSB is an international body coordinating the work of national financial authorities and standard setting bodies. Its members are national financial authorities, international financial institutions, sector-specific international groupings of regulators and supervisors, and committees of central bank experts. [UNFCCC Press Release] [UNFCCC Webcast of the Launch Event] [FSB Press Release] [FSB Work on Risk Disclosures] [IISD RS Coverage of Paris Climate Change Conference]