Despite a growing recognition that climate change has profound implications for the financial sector, the impacts and opportunities that climate change will have on businesses are not being included in standard reporting documents. While publicly traded companies are usually required to disclose material risks to investors, there is as yet no standardized framework to ensure that climate-related risks are disclosed in a reliable and comparable manner. This disclosure gap led the Financial Stability Board (FSB) to establish the Task Force on Climate-related Financial Disclosures (TCFD) in 2015. This task force has developed a reporting framework that businesses can integrate into mainstream financial filings.
In this video, CIGI post-doctoral fellow Maziar Peihani explains why the adoption of the TCFD recommendations would be a win-win situation for everyone: It would help investors to make informed decisions, and would allow corporations to prepare for climate change and have a strategy to deal with it.