Members of a taskforce created to develop principles for the disclosure of climate-related risks have been named.
Bank of England governor Mark Carney announced in December that the taskforce on climate-related financial disclosures (TCFD) would be established and operate under the banner of the Financial Stability Board (FSB).
Membership of the TCFD has been drawn from those who prepare as well as those who use corporate reports, and include representatives from the financial and non-financial sectors, a range of countries and different areas of expertise.
Former New York mayor Michael Bloomberg will chair the taskforce and will be assisted by four vice chairs: Graeme Pitkethly, chief financial officer at Unilever, Denise Pavarina, managing officer at Brazilian bank Bradesco, Christian Thimann, group head of strategy, sustainability and public affairs at AXA, and Yeo Lian Sim, special adviser at the Singapore Exchange. All will be acting in a personal capacity, according to the FSB.
The full membership of the TCFD can be viewed here.
The aim of the TCFD is to consider the physical, liability and transition risks associated with climate change, and develop recommendations for consistent, comparable, reliable, clear and efficient climate-related disclosures. It expects to consult publically on draft proposals by the end of 2016.
Bloomberg said: ‘Managing climate-related risk is increasingly critical to financial stability, but it can't be done without effective disclosure. The recommendations from the taskforce will increase transparency and help to make markets more efficient, and economies more stable and resilient.’
Ben Caldecott, programme director at the Smith School of Enterprise and the Environment at the University of Oxford, said the taskforce should help correct some significant failures in the way that companies currently disclose data on environmental performance.
Highlighting the flaws of the current reporting system, he said that only some companies currently report data annually, adding that the data may not be relevant for assessing the environmental performance of assets or may be inaccurate or out of date.
Companies may also spend a significant amount of time filling in forms for different reporting systems, while third parties need to spend significant effort trying to verify the data, Caldecott said.
The taskforce website is at www.fsb-tcfd.org.
Also today, Carbon Tracker and the Climate Disclosure Standards Board have set out proposals for risk reporting by fossil fuel companies. Launching a report on the issue, the two organisations, which promote transparency in relation to climate risk, called on fossil fuel companies to accept the risks of stranded assets and adjust their business models accordingly.
Carbon Tracker and the Climate Disclosure Standards Board highlighted action this week by a coalition of investors led by the Church Commissioners for England, which has asked ExxonMobil to detail the resilience of its business model to climate change.
Mark Campanale, Carbon Tracker founder and executive director, said: ‘These disclosure principles go to the very core of the energy transition that is underway – they show investors and markets the extent to which individual fossil fuel companies may be at risk, as well as management’s plans for addressing the looming issue. They also should allow for a system-wide overview of how the transition is progressing over time.’