A nudge in the right direction

Elisabeth Jeffries looks at the Task Force on Climate-related Financial Disclosures, which aims to redirect companies away from high-emitting fuels and encourage more strategic reporting

Had German utility RWE reconsidered political risk, its finances in 2015-2017 might have been stronger. The company’s shares fell in September 2017, after news that Germany’s Green Party could join a government coalition. Earlier in the year, and partly for the same reason, its profits declined and the company scrapped its dividend.

Had German utility RWE reconsidered political risk, its finances in 2015-2017 might have been stronger. The company’s shares fell in September 2017, after news that Germany’s Green Party could join a government coalition. Earlier in the year, and partly for the same reason, its profits declined and the company scrapped its dividend.

That, at least, is the view of non-profit carbon disclosure organisation the CDP. The utility should open up more about the physical and regulatory climate-related risks to its business, the organisation suggests. Like many carbon-intensive firms, RWE has had to grapple with new cleantech policies, a risk that could hurt the firm. “RWE continues to struggle with the Energiewende, Germany’s energy market transformation,” observes Luke Fletcher, CDP utility analyst. 

But now around 100 major businesses backed by CDP and other non-profits are uniting to exert more pressure, not just on utilities such as RWE but on hydrocarbons, industrial and service companies. The consortium, known as the Task Force on Climate-related Financial Disclosures (TCFD) and launched in July 2017, wants more transparency on transitional and physical climate-related risk and opportunity in annual reports. Founded by global governance organisation the Financial Stability Board, TCFD claims many corporations still ignore ...

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