More than 1,000 organisations have now given their support to the Task Force on Climate-related Financial Disclosures (TCFD), representing a combined market capitalisation of nearly $12trn (£9trn).
This signifies a major shift in firms acknowledging the need to report on their exposure to climate change, with the number of TCFD backers almost doubling from 513 in late 2018 to 1,027.
Supporters include some of the world's largest banks, insurers, asset managers and industrial companies. Financial firms backing the initiative are responsible for $138.8trn in assets.
“Only two years after the final TCFD recommendations were published, demand for climate-related financial disclosures has skyrocketed and the supply is responding,“ said Mark Carney, governor of the Bank of England.
“The TCFD is helping to bring climate risks and resilience into the heart of financial decision-making, making climate disclosure more comprehensive and comparable and helping investment for a two-degree world go mainstream.
Set up by the Financial Stability Board in late 2015, the TCFD recommends how companies across the world should best disclose the financial impacts of climate change to investors.
It is hoped that this will provide investors, lenders, and insurance underwriters with the information necessary to understand companies' risks and opportunities from climate change.
The TCFD said that supporters can benefit from better access to capital by increasing investors' and lenders' confidence that the company's climate-related risks are appropriately assessed and managed.
They can also benefit from increased awareness and understanding of climate-related risks and opportunities, resulting in better risk management and more informed strategic planning.
Moreover, the TCDF recommendations can boost an organisation's ability to meet existing disclosure requirements and proactively meet investors' demand for climate-related information.
This comes after BlackRock – the world's largest asset manager – last month warned that climate change will trigger a “fundamental reshaping of finance“, with a substantial capital reallocation imminent.
It is necessary for all parties in our investment chain, from portfolio companies to asset managers, to support the TCFD so that asset owners like us can properly access our portfolio, said Hiro Mizuno, chief investment officer at GPIF.
I am convinced that the TCFD will continue to evolve as a major framework for such disclosure and strongly recommend all corporates to join.
Organisations can express their interest in supporting the TCFD recommendations via this online form
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