Resource Database

The objective of the 2021 BES is to test the resilience of the current business models of the largest banks, insurers and the financial system to the physical and transition risks from climate change. The exercise will provide a comprehensive assessment of the UK financial system’s exposure to climate-related risks and therefore the scale of adjustment that will need to be undertaken in coming decades for the system to remain resilient. To this end, the BES will focus on sizing risks, rather than testing firms’ capital adequacy or setting capital requirements. It will also allow the Bank to examine how major financial firms expect to adjust their business models, and what the collective impact of these responses on the wider economy might be. Finally, the BES will provide a vehicle for financial firms to identify and address data gaps and to develop cutting-edge risk management approaches.

This discussion paper sets out the Bank’s proposed framework for conducting the 2021 BES. Given the unique nature of climate-related risks, the 2021 BES will be a novel exercise for the Bank and for participating firms.

The Science Based Targets initiative (SBTi) drives ambitious climate action by mobilising companies to set science-based targets (SBTs), GHG reduction targets that are aligned with what climate science tells us is required to meet the goals of the Paris Agreement. Since its launch in 2015, the SBTi has made significant progress against its goal of making science-based target setting standard business practice.

Climate change is a systemic threat to the financial system and presents a material risk to the investment returns of long-term asset owners and their underlying superannuation members. Central banks and national financial regulators are increasingly warning of the financial risks of climate change. This policy brief outlines why investors have a clear legal obligation to manage climate risks. In addition, it outlines how financial regulators around the world are now requiring a proactive response from investors and companies to manage climate related financial risks in order to ensure financial stability.

MIT held a workshop, “Climate Scenarios in Corporate Disclosure,” on November 28 and 29, 2018, that gathered participants from oil and gas companies, global scenario producers, the financial community, and NGOs together with other experts to discuss climate‑related scenarios and their use in financial disclosures. The workshop was held under the Chatham House Rule. This white paper is meant to reflect and build upon the content of the discussions held at the workshop.

This report provides an annual snapshot on the alignment with the Recommendations across sectors in Australia likely to be highly impacted. This report is intended to provide companies, regulators, investors, and stakeholders of all types with an understanding of the current state of Australian climate risk reporting. It also offers insights into the differences in reporting across sectors, and suggests areas of improvement, in the quality and coverage of climate risk disclosures.

The purpose of this report is to provide a progress assessment on banking sector disclosures specifically, considering the critical role that banks need to play as enablers of capital to fund the transition to a low-carbon economy.

The report has been developed by members of the Investor Leadership Network (ILN), a coalition of leading pension funds and asset managers. The report offers a unique and practical “behind the scenes” look at what major financial organizations learned through implementing the TCFD recommendations and working to incorporate climate change into their organizations. The report shares members’ experiences, and lessons learned implementing the (TCFD) recommendations. It details the diverse approaches taken, the challenges faced, and the reasons behind the choices made.

Created by the Climate Disclosure Standards Board (CDSB) and the Sustainability Accounting Standards Association (SASB), the TCFD Good Practice Handbook identifies good practices in implementing the TCFD recommendations. The examples are drawn from across the G20 to cover multiple jurisdictions and a diversity of practices in making the 11 TCFD recommended disclosures across the four core elements of governance, strategy, risk management, and metrics and targets. The examples contained in this handbook are also provided for capacity development purposes and to aid in making the TCFD disclosures in the mainstream report. We offer these in response to the common question; What does good practice on TCFD disclosure look like, and which company reports can we look at?

A4S have launched these practical examples to show how organizations have started to implement the Recommendations of the Task Force on Climate-related Financial Disclosure (TCFD).

The examples from Unilever and Tesco show how the results from scenario analysis were able to inform decisions within their respective organizations.

The TCFD Chemical Sector Preparer Forum is a collaboration between AkzoNobel, BASF, DSM, Solvay, Sumitomo Chemical Company, Limited and the World Business Council for Sustainable Development (WBCSD). The Forum’s aim is to advance the implementation of the recommendations of the TCFD by reviewing members’ current climate-related financial disclosures, identifying examples of disclosure practice that are consistent with the TCFD’s recommendations, and considering how disclosures might evolve over the TCFD’s “implementation path”. The aim of this report is to provide a snapshot, including examples, of how Forum member companies are currently providing effective climate-related financial disclosures.

The TCFD Electric Utilities Preparer Forum is a collaboration between CLP, EDF, EDP, EnBW, Enel, Iberdrola and the World Business Council for Sustainable Development (WBCSD). The Forum’s aim is to advance the implementation of the recommendations of the TCFD by reviewing members’ current climate-related financial disclosures, identifying examples of disclosure practice that are consistent with the TCFD’s recommendations, and considering how disclosures might evolve over the TCFD’s “implementation path”. The aim of this report is to provide a snapshot, including examples, of how Forum member companies are currently providing effective climate-related financial disclosures.

Following changes to pension scheme investment regulations, from October 2019, UK pension trustees must update their scheme’s SIP to set out their policies on ESG, climate change and stewardship activities. Additional requirements apply from 2020 to trust based DC schemes. Similar changes are anticipated for contract based schemes and their IGCs, following an FCA consultation, expected in the first quarter of 2019. Against the backdrop of regulatory change, climate change falls heavily under the spotlight. Pages 7-9 looks at how trustees’ fiduciary duties require a prudent assessment of risks, and pages 10-12 looks in detail at how trustees should apply this to their assessment of climate change risks specifically.