14 March TCFD by SuperUser Account Green Investing, investor-led, Sustainability, TCFD 0 0 Comment 0 What is TCFD? Launched by the G20 Financial Stability Board to provide climate reporting guidelines for companies, the Task Force on Climate-related Financial Disclosure (TCFD) is a set of reporting recommendations that enable companies to monitor and reduce the risks associated with climate change. It provides companies with a method for incorporating climate change into their business plans by integrating strategy and climate scenario analysis into the financial risks identified by the company. The Task Force will consider the physical, liability and transition risks associated with climate change and what constitutes effective financial disclosures across industries. Unlike other recent reporting developments, TCFD isn’t about your impact on the environment, it is about the environment’s impact on you. These disclosures are targeted at mainstream investors, and are intended to help them assess whether climate risk is appropriately priced in to their valuation of your company. Who Reports? TCFD applies to: organisations from both the financial and nonfinancial sectors increasingly other frameworks are including the recommendations and encouraging their responders to align their disclosures with them. especially relevant for those with annual revenue above US$ 1 billion. asset managers and owners looking to better understand risk and how this affects their investments. What is Reported? There are four key areas for TCFD reporting, as shown in the diagram below: Examples of questions that are posed in each of the four key dimension are: Governance - Is climate change governance defined and sufficient at all hierarchical levels, especially at the highest level? Strategy - What are the impacts (actual and potential) of climate-related risks and opportunities on business strategy and financial planning? How resilient is the business strategy under various climate scenarios, including the 2°C scenario? Risk management - How to identify and manage climate-related risks and opportunities within the company? How does this approach fit with the general risk management of the company? Measures and Objectives - What indicators and targets should an organisation use to measure and manage climate-related risks and opportunities? What are the company’s emissions on Scopes 1, 2 and 3? What is Disclosed? The table below summarises the recommended disclosures under TCFD: Read More »
13 March Investor-led Sustainability Frameworks by SuperUser Account Green Investing, Sustainability, TCFD 0 0 Comment 0 Sustainability Frameworks for Responsible Investing The advent of investor-led sustainability frameworks provides companies with a method for incorporating climate change into their business plans by integrating strategy and climate scenario analysis into the financial risks identified by the company. This approach is useful for both investors and financiers alike who are looking for robust data and insightful information that can support investment decisions. The key investor-led sustainability frameworks are: TCFD The Task Force on Climate-related Financial Disclosure (TCFD) is a G20 sponsored initiative that uses a set of recommendations to assist companies in better accounting for climate-related risks in their financial and mainstream disclosures. Many reporting frameworks are aligning to the sustainability provisions of TCFD. FTSE4Good The FTSE4Good Index is a series of ethical investment stock market indices launched in 2001 by the FTSE Group. A number of stock market indices are available, for example covering UK shares, US shares, European markets and Japan, with inclusion based on a range of corporate social responsibility criteria. FTSE4Good is a sustainability reporting framework that is designed to measure the performance of companies with strong Environmental Social Governance (ESG) practices. Companies are required to provide evidence about their ESG practices. DJSI The Dow Jones Sustainability Index (DJSI) is a set of benchmark indices for responsible and sustainable investment. These indices, whether regional or national, assess the performance of companies’ ESG criteria and enable investors to make informed decisions to encourage more responsible investment portfolios. DJSI publishes indices of the top 10% of companies who respond to a questionnaire covering Economic, Environmental and Social issues. SASB The Sustainability Accounting Standards Board (SASB) publishes 77 industry-specific standards to help businesses identify, manage and report on sustainability topics that matter most to their investors. The industry-specific reporting standards allow for benchmarking and comparison for businesses around the world. SASB standards draw on accounting principles to align with US financial reporting. The SASB sustainability framework, used by 50 SASB Alliance companies, is focused on industry-specific reporting standards and focused on financially material issues. Read More »