Climate change has been identified in recent years as an investment risk, yet existing financial reporting standards do not adequately measure and communicate these risks to investors. A climate change risk disclosure regime has emerged in response, defined by a range of voluntary, regulatory and accounting governance initiatives. In spite of its promise, and the involvement of a range of influential financial constituencies, this nascent regime is highly fragmented and lacks coordination and enforcement. This policy brief describes the background for the climate change risk disclosure regime and the challenges that limit its effectiveness, and presents several policy recommendations to improve its capacity to measure and communicate climate change risks. It highlights the need to standardize climate change risk disclosure, and the need to develop strategies that can reduce uncertainty when assessing the financial risks of climate change.

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