Resource Database

Japan’s primary prudential regulator, the Bank of Japan, has acknowledged that climate change poses a systemic risk to the Japanese economy and financial system. There is now overwhelming scientific and financial evidence of the material impacts of climate change on businesses. Directors in Japan have three primary duties, a duty of loyalty, a duty to be in compliance with all laws, regulations, and ordinances, and the company articles, and a duty of care. Directors’ duties are set out in the Companies Act of Japan, the articles of incorporation, and the Civil Code. The obligation of directors to consider the implications of climate change risk is grounded in the duties each director owes to the corporation they serve. In their oversight of management of climate risks, directors must meet the objective standard of what a reasonably prudent person would do in comparable circumstances.

The study looks at 60 of the most carbon-intensive extractive companies and at the extent and quality of disclosures they make in the management report and in the financial statements about the potential impact of climate change on their business. Clearly there are risks to the long-term viability of their activities which would impact their mineral or hydrocarbon reserves and the related infrastructure and leave them with ‘stranded’ assets. Overall the findings are that the reporting is not good enough and that annual reports lack clarity of and depth in climate change related disclosures.

The Climate Risk Landscape: Mapping Climate-related Financial Risk Assessment Methodologies provides a summary of the key developments across third party climate risk assessment providers since May 2019, including new and updated scenarios, methodological tools, key guidelines, as well as an overview of the changing regulatory landscape and potential developments into 2021.

This report covers both physical and transition risks, though the headline results on physical risks have incorporated the results of an analysis of physical risk methodologies and data sources in chapters 2 (Data portals) and 4 (Methodologies) of UNEP FI and Acclimatise’s recently released report, ‘Charting a New Climate’ (2020) developed for UNEP FI’s TCFD Banking Pilot Project Phase II. This overview has adopted a two-step process by engaging with methodology developers to provide information on their tools and methodologies, which have been subsequently verified through objective research.

Pathways to Paris’ is a practical guide for financial practitioners looking to understand and apply climate scenarios. Co-authored with the Center for International Climate Research (CICERO), a world-renowned research institution on climate and climate finance, the report examines the driving assumptions and sectoral coverage of the models used to produce climate scenarios, as well as the benefits and limitations of using these pathways.

This paper also provides a series of recommendations for enhancing the development and application of Integrated Assessment Models (IAMs) by financial institutions based on perspectives of participating banks that used UNEP FI’s transition risk.

This paper covers two primary themes of relevance to financial institutions, with support from Oliver Wyman. First, it examines sector specific risk drivers that could result in a disorderly transition, making the argument that climate transition risk is a significant near-term threat to much of the economy. Second, the report explored how these risk drivers are currently being modeled in climate scenarios produced by major integrated assessment models (IAMs). The paper also includes bank case studies that affirm greater economic risks associated with disorderly transition scenarios compared with orderly transition scenarios.

This report summarises practical lessons and resources for physical climate risk analysis in finance as the result of a 3-year collaboration between climate experts and financial institutions for the ClimINVEST European research project. It explains how 4 major challenges were partly addressed in the project: the tragedy of the horizon; the black box of climate services; data accessibility; the quantification of financial impacts. It also formulates priority next steps of action for financial actors and their stakeholders.

This report focuses on the risk manager and insurer roles of the insurance industry. Over the past year, 22 leading insurers and reinsurers have collaborated under the auspices of UN Environment Programme’s (UNEP) Principles for Sustainable Insurance Initiative (PSI) to pilot methodologies that insurers can use to implement the recommendations of the TCFD.

This study on insurance follows the TCFD studies done by UNEP’s Finance Initiative on banking and investment.

In September 2020, the five reporting organisations issued a joint statement of intent, outlining a vision for a comprehensive corporate reporting system, and a commitment to work together to achieve it.

In this paper, these organisations provide an important step towards this vision. This paper demonstrates how certain components of current frameworks and standards, along with the recommendations set out by the TCFD, can be used together to provide a starting point for the development of global standards for sustainability-related financial disclosure.

The AMF assessed the implementation of the TCFD framework by 10 French financial institutions, based on an in-depth analysis of their reports and interviews. This study highlights the main difficulties faced and presents good practices and next steps in order to support the institutions who choose to disclose climate risks and opportunities against this voluntary framework.

This resource is also available in French.

In this report CDSB has taken a deep dive into the environmental disclosures of the largest listed companies in the EU. The third in the series, we pick up where our previous report ‘Falling Short?’ left off. We will compare where we were then, and what progress has been made, and will find from this comparison a clear sense of progress, which nevertheless fails to demonstrate a fast enough acceleration to achieve the change that is needed.

The review assessed the strengths and weaknesses of companies’ disclosures, based on the required disclosures under the NFRD, and the recommendations of the TCFD.

The TCFD reporting example on ABN AMRO focuses on the use of scenario analysis.

ABN AMRO Bank N.V. is headquartered in Amsterdam, Netherlands. It is the third largest bank in the Netherlands with total assets of €375 billion and assets under management (AUM) of €296.5 billion.

The bank reported against the TCFD framework for the first time in its 2019 Annual Report. Reporting in line with each of the four thematic areas enabled the company to show the breadth of their TCFD response. It also revealed the key areas where implementation of the recommendations can be enhanced, with some of the planned ‘next steps’ referred to in their disclosures.

As an increasing number of countries legislate for net zero, investors and lenders will need tools to identify risks and opportunities in the transition to a net zero economy. This requires forward looking, robust, decision useful and comparable metrics. The report provides a critical assessment of different approaches on a spectrum of sophistication, with a particular focus on portfolio warming metrics. The report sets out their key building blocks, initial views on potential best practice, and identifies the data needs and methodological questions that require further work to make these metrics robust.