Reporting on climate risks on the bottom line

Reporting on climate risks on the bottom line

Apr 4, 2017

With three months to go until the Financial Stability Board (FSB) releases its final set of climate-related financial disclosures guidelines, Exiger’s Rob Wilson, a director of forensic accounting, discussed with writer Neil Hodge of Compliance Week why companies need to start to plan in advance their analysis and management of climate-related risks that could affect long-term operations. The disclosure recommendations will be for use by companies in providing information to investors, lenders, and insurance underwriters. But, while they are currently set to be voluntary, influential parties are urging that the disclosures are mandatory.

Rob Wilson shares his perspective that “Companies need to assess the likelihood of climate-related risks affecting their operations directly, as well as indirectly through the supply chain, and what the potential consequences could be.” 

The FSB established a Task Force on Climate-related Financial Disclosures (“TCFD”) in December 2015 to provide draft guidelines, resulting in an open consultation paper in December 2016 and recommendations published that month with consultation ending 12 February 2017. Support for the TCFD initiative have come from several international industrials ranging from Dow Chemical, Air Liquide, BHP Billiton, Eni, Tata Steel and Unilever, to other insurers including Axa and Swiss Re and large banking groups (Support Statements).

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