Now the public consultation on the FSBs Task Force on Climate-related Financial Disclosures (TCFD) recommendations has closed, we welcome them. This work has the potential to be game-changing as climate risk moves out of the CSR department and into the boardroom.
It is our mission at CDP to drive global environmental disclosure and ensure progress towards a well below 2-degree pathway is tracked. We will continue to work with investors and companies to ensure market adoption of the TCFD recommendations and support mandating disclosure over time. We will also continue to innovate to 2020 and beyond taking the best developments in science, benchmarking and new technologies to ensure companies. This will ensure companies and investors better understand climate risk and can prepare for a more sustainable future.
How can the TCFD maximise take-up and drive success?
Mandatory disclosure: We are strong advocates of mandating and enforcing universal company disclosure to obtain consistent, comparable and high-quality information to reach companies who resist voluntary norms. We believe policy intervention is necessary to drive the cultural behaviours and action required. This should be taken into account by the governments of the G20 as they consider how to respond to the TCFD’s recommendations.
Scenario analysis: CDP sees this as a top priority, particularly across the high-emitting sectors, for example oil and gas, heavy industry and electric utilities. We welcome the use of transition plans so companies and investors can better understand the risks they are running and track their own performance progress overtime.
Comparability: Providing such a broad and diverse set of metrics and frameworks could lead to issues of comparability. We would recommend more prescriptive direction to companies to understand what is relevant and actionable as priorities. View some of our latest research on the pitfalls of disclosure and challenges around reporting.
Geographic reach: With a largely US/Euro-centric Task Force membership the TCFD needs to ensure global stakeholder buy-in and adoption across all markets.
Future proofing: The recommendations from the Task Force run the risk of being a snapshot in time. Disclosure and climate action is an evolving process based on the latest science, technology and investor action. We are working with over 200 major multinationals committed to setting Science Based Targets and over 1,200 companies adopting internal carbon pricing. We see a period of great opportunity and adoption to 2020 and beyond to target high-emitting sectors and geographies that need to address and act on climate change.
We welcome the TCFD's engagement through the public consultation and look forward to the final recommendations when they are launched in Hamburg in July.