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Global CEOs call for climate risks' disclosure

Global CEOs Call for Greater Disclosure of Climate Risks
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27 business leaders, members of the Alliance of CEO Climate Leaders convened by the World Economic Forum, express their strong support for the recommendations of the industry-led Task Force on Climate-related Financial Disclosure (TCFD), convened by the Financial Stability Board.

Timely implementation of the recommendations is an important step towards delivering the commitments of the Paris Agreement and keeping global warming to well below 2°C. Enhanced disclosure will also enable better assessment of financial stability implications and help support an orderly transition to a low-carbon economy.

When the recommendations are implemented, all companies will be encouraged to disclose the impacts of climate change on their business activities. Investors and financial institutions will have a common set of data and information to enable dialogue on the implications of climate change for a specific company and to support investment decisions. The information will highlight the risks posed by the physical impacts of climate change, the implications of relevant policies, and liability risks that may arise from inaction – providing greater visibility on how companies are managing these risks. The information will also indicate the business opportunities created by supporting the growth of a low-carbon economy.

All business leaders’ intention is to urge the G20 to formally accept the recommendations of the TCFD as a strong signal that government leaders desire more transparency from business regarding the financial implications of climate change on their short and long-term strategy and operations. As agreeing with the current TCFD recommendations, the CEOs will actively support their successful implementation.

In addition to their general support, there are a number of areas that they believe will help effective implementation of the recommendations, including: clarification that one of the functions of a company’s board is to govern long-term risks such as climate change; development of guidance and standards to support consistent disclosure; and development of benchmarking tools to review and monitor the quality of disclosure.

The CEOs are fully aware that climate-related financial disclosure is not the only mechanism needed to help implement the Paris Agreement. It needs to be complemented by a suite of mechanisms - for example, effective carbon pricing and phase-out of fossil fuel subsidies - that incentivise a shift of investment to climate smart activities and assets. However, improved and more consistent disclosure of climate-related financial risks will go a long way in enabling constructive and well-informed dialogue between investors and companies about the financial risks and opportunities associated with their activities.

The heads of major global businesses strongly support the TCFD recommendations and encourage other businesses to do the same.

 

WeForum Press – Global CEOs call for greater disclosure of climate risks

WeForum Agenda - Global CEOs call for greater disclosure of climate risks and opportunities

 

Enel editorial staff