In December 2015, the Financial Stability Board established the Task Force on Climate-related Financial Disclosures (TCFD). The TCFD members were from large banks, insurance companies, accounting firms, credit rating agencies, consulting firms, and more. Together, these professionals set out to create guidelines for more effective climate change-related disclosures and to help organizations follow existing climate change disclosure obligations. The final TCFD report and guidelines came out in June 2017.
The TCFD structured their research and recommendations around four core areas:
· Risk Management
· Metrics and Targets
They presented their recommendations to G20 Leaders at the Summit in Hamburg, Germany this July. The goal of the TCFD is to prepare companies and the global financial system to withstand the impacts of climate change on investment patterns and business models. The guidelines help companies plan for different climate-change related scenarios. So far, more than 100 companies from around the globe have publicly supported the TCFD’s recommendations.
The Chair of the Financial Stability Board, Mark Carney, commended the work of the TCFD. He announced in June that the Bank of England will strengthen their efforts to tackle the financial risks posed by climate change. Academics from Oxford University’s Smith School of Enterprise and the Environment have termed the new sustainable finance outlook “groundbreaking.” The Financial Stability Board has approved a proposal to let the TCFD continue its work until at least September 2018.