Investor practices programme
IIGCC submission to consultation by the Task Force on Climate-related Financial Disclosure
This document details the response to the from three international investor groups (whose work is focussed on investment and opportunities related to climate change) to a consultation launched on 31 March 2016 by the Task Force on Climate-related Financial Disclosures (TCFD) as part of its work to develop set of fundamental principles for disclosure related to climate risk.
The comments put forward in this response reflect the concern of many investors that in general companies have yet to fully integrate climate risks and opportunities into their core business strategies, do not make the need to secure a rapid transition to a low carbon economy a routine consideration in their decision making, may not report their greenhouse gas emissions fully and often disclose very little about climate related risks.
This document suggests a range of key strategies that could be used to address these deficiencies including disclosure of 2 degree stress testing; absolute emissions reduction targets; information on resilience of a company’s strategy with regard to CAPEX planning; portfolio composition; R&D; the full integration of a climate risk management approach to board level strategy; and the use of both quantitative methodologies and narrative reporting to support comparisons over time that demonstrate progress year-on year.
This submission also discusses disclosure of portfolio climate risk by investors, the importance of improved corporate disclosure for this process, the need to improve understand of risks and opportunities inherent in other asset classes and how best to support the evolution and development of the methodologies emerging to support investor disclosure.
Incorporating Derivatives and Hedge Funds into the NZIF: Consultation Responses