Climate change reporting is ‘fragmented and incomplete’, taskforce finds
A lack of consensus on what constitutes a material climate risk is hampering companies’ ability to disclose climate-related financial risk adequately, according to a global taskforce.
The taskforce on climate-related financial disclosures (TCFD) was mandated by the G20 group of nations to draw up recommendations to make climate-related financial risk disclosure by companies more comprehensive and consistent so they could be used by lenders, insurers and investors.
The task force has analysed existing reporting regimes, and in its first report, it outlines where there are gaps that are hindering effective use of the information corporations provide.
It found that most G20 countries require some form of climate-related disclosure, but only a limited number of measures pertain directly to climate-related financial risks. In general, disclosure of climate-related risk is required in mainstream financial filings if it is determined to be ‘material’, it noted.
However, there is a lack of consensus on what constitutes a material climate risk, often due to significant uncertainty surrounding the severity, ...