Growing numbers of listed firms may be preparing to report on climate-related risks in line with the recommendations set out this year by the Task Force on Climate-Related Financial Disclosures (TCFD), but significant numbers are still yet to develop a strategy for responding to investor calls for them to improve their climate reporting.
That is the headline conclusion from a new survey of firms that meet the threshold for reporting in line with TCFD recommendations, released today by sustainability financing specialist South Pole.
The survey found that just 18 per cent plan to disclose climate-related risks in line with the TCFD next year. Moreover, while 62 per cent of survey participants recognise a first mover advantage in disclosing in line with the TCFD framework, over half said they have yet to decide on an actual disclosure strategy and three quarters were still unsure when exactly they plan to start disclosing.
Today's survey suggests three quarters of respondents have not defined or identified scenarios to assess the future physical and transition risks of climate change.
Charles Henderson, corporate climate change expert at South Pole, said "businesses will have to reset their approach to climate change risk disclosure: it is no longer a promotional activity or a means to fulfil technical reporting requirements, but a crucial part of overall risk analysis to pinpoint emerging threats and opportunities".
However, speaking last week at the One Planet Summit in Paris Carney stressed that there were compelling business reasons for investors and corporates to follow the TCFD guidelines and properly engage with climate-related risks.
"You now have the mass of the financial sector saying 'we want to distinguish between those who can see the opportunities, those who can manage the risk, and a group of companies that just don't know the answer to these questions'," he said. "It's going to be more awkward to be in that last group."