This article was originally published on BRINK on July 2, 2018
Climate change is exposing businesses to new and unpredictable strategic and operational risks.
Not unsurprisingly, stakeholders are looking for greater transparency on the implications of climate-related events and trends for an organization’s financial performance.
As a result, organizations are making efforts to better understand how climate change is impacting the organization, and to assess their resilience to these changes.
Enter the Financial Stability Board’s (FSB) Task Force on Climate-Related Financial Disclosures (TCFD). Established by Mark Carney and Michael Bloomberg, the TCFD created a set of recommendations to help organizations disclose information on climate-related risks and opportunities in a consistent, comparable and reliable way.
The real gain in disclosing climate-related risks is in the identification of new risk areas not typically captured under the lens of traditional risk assessments.
Though the recommendations are voluntary, one year since their release in June 2017, the push for increased climate risk disclosure is rapidly growing with support from the investor community, associations, companies, and policy makers.
Reporting Climate Resilience: The Challenges Ahead, developed by Marsh & McLennan Companies’ Global Risk Center and CDP (formerly the Carbon Disclosure Project), identifies the three key challenges organizations are facing in implementing the recommendations.