The Financial Stability Board (FSB) announced today it is establishing an industry-led disclosure task force on climate-related financial risks under the chairmanship of Michael R. Bloomberg. The Task Force on Climate-related Financial Disclosures (TCFD) will develop voluntary, consistent climate-related financial risk disclosures for use by companies in providing information to lenders, insurers, investors and other stakeholders.
The Task Force will consider the physical, liability and transition risks associated with climate change and what constitutes effective financial disclosures in this area. It will seek to develop a set of recommendations for consistent, comparable, reliable, clear and efficient climate-related disclosures, as set out in the FSB’s proposal in November. The wide range of existing disclosure schemes relating to climate or sustainability highlights the need for companies and relevant stakeholders to reach a consensus on the characteristics of effective disclosures and examples of good practices. In doing so, the industry-led Task Force will take account of the work of other groups related to effective disclosures.
The Task Force will conduct its work in two stages. During the first stage, the Task Force will consist of about 10 individuals, who will determine the scope and high-level objectives for its work. It is expected that this first stage will be completed by end-March 2016. During the second stage, the Task Force’s work is likely to be expanded to include up to 30 individuals, focused on delivering specific recommendations for voluntary disclosure principles and leading practices, if appropriate, with a view to completing its work by end-2016. As part of its work the Task Force will conduct public outreach.
In similar fashion to the Enhanced Disclosure Task Force (EDTF), an industry-led group that was established by the FSB in 2012 to make recommendations on financial risk disclosures for banks, the Task Force will comprise senior technical experts from firms that are the preparers and users of company risk disclosures, as well as risk analysts. The members of the Task Force will be private-sector individuals drawn from financial and non-financial companies across a broad range of countries within the FSB’s membership.
Mark Carney and Michael R. Bloomberg will discuss the Task Force at the Paris Climate Change Conference. The discussion will be available as a live webcast and recording on the COP21 website.
In April 2015, G20 Finance Ministers and Central Bank Governors asked the FSB “to convene public- and private- sector participants to review how the financial sector can take account of climate-related issues”. G20 Leaders, in their Antalya Summit communiqué in November 2015 asked the FSB to continue to engage with public- and private- sector participants on this subject.
Michael R. Bloomberg is the United Nations Secretary-General’s Special Envoy for Cities and Climate Change, Founder, Bloomberg LP and Bloomberg Philanthropies and was the 108th Mayor of the City of New York.
Details on the full membership of the Task Force and its terms of reference will be released later in December. The FSB will publish periodic updates on the work of the Task Force on its website.
FSB sets out proposal to the G20 for creation of industry-led task force to consider climate change risk.