{"id":116,"date":"2017-08-29T17:49:29","date_gmt":"2017-08-29T12:19:29","guid":{"rendered":"http:\/\/ga-institute.com\/to-the-point\/\/?p=116"},"modified":"2018-02-21T21:02:06","modified_gmt":"2018-02-21T15:32:06","slug":"climate-change-related-disclosure-the-financial-stability-boards-task-force-on-climate-related-financial-disclosures-could-affect-your-companys-important-financial-disclosure-filings-and-yo","status":"publish","type":"post","link":"https:\/\/ga-institute.com\/to-the-point\/climate-change-related-disclosure-the-financial-stability-boards-task-force-on-climate-related-financial-disclosures-could-affect-your-companys-important-financial-disclosure-filings-and-yo\/","title":{"rendered":"CLIMATE CHANGE-RELATED DISCLOSURE: The Financial Stability Board’s Task Force on Climate- Related Financial Disclosures Could Affect Your Company’s Important Financial Disclosure & Filings — And Your Relationship With Lenders, Investors, Insurers…"},"content":{"rendered":"

Issue 1.1 – August 2017<\/strong><\/p>\n

More climate-related disclosure in your company’s income\u00a0statement \/ cash flow statement \/ balance sheet? How will your\u00a0company be affected? How will you be affected by the FSB TFCD\u00a0guidelines for your company’s ESG disclosure?<\/span><\/h3>\n

T\"\"he Financial Stability Board (FSB) is a global, multi-stakeholder organization that brings together senior policy makers from the G20** nations plus leaders from the European Union, Hong Kong, Singapore, Spain, and Switzerland.<\/p>\n

The Board’s convenings\u00a0 include key central bankers, sovereign regulatory leadership, bank and financial sector oversight leaders, and others; they collaborate to create “financial stability” policies for countries to follow. (These are not mandates, not replacements for existing sovereign authorities) that those at the table; thought leaders can also take home and implement recommendations in various ways.)<\/p>\n

There are six regional “consultative groups” that help to coordinate activities in an additional 70-plus countries, including in developing economies & emerging markets.<\/p>\n

In this way as financial sector policies are being formulated there is help available from more experienced professional (such as professional colleagues in developed nations — the G20 plus four).<\/p>\n

The work of the FSB is all about addressing risk in the financial\u00a0<\/strong>services sector<\/strong> — identifying risk, addressing risk, avoiding risk, developing protective risk management approaches for underwriters (insurance companies); lenders (banks); investors (asset managers and asset owners).<\/p>\n

This includes evaluation of risk for corporate issuer assets in portfolios; insurance underwriting; lending; and other activities in the financial services sector — and by extension to thousands of public and private companies the sector does business with.<\/p>\n

And the focus is on “risk” for all of these entities and their activities\u00a0 – therefore, there is\u00a0<\/strong>the looming question of the possible impacts of a changing climate on assets.<\/strong><\/span><\/h3>\n

The Finance Ministers and Central Bankers of the nations in the G20 asked the FSB to address this rapidly-evolving challenge and to review and make recommendations on how the financial sector can take account of climate-related issues.<\/p>\n

\"\"<\/p>\n

The FSB convened a “Task Force on Climate-Related Financial Disclosures — the FSB TCFD*.<\/strong><\/p>\n

The task force is headed by Chair Michael Bloomberg<\/strong> (he’s former mayor of New York City, principal of Bloomberg LP, UN Envoy to Cities, chair of the SASB, etc.).<\/p>\n

Mr. Bloomberg leads the 32-member task force; the work began in December 2015. There were numerous invitations to stakeholders to submit suggestions (such as the American Bar Association)<\/strong>; public meetings were held; industry input was solicited — and at year-end 2016 the recommendations were being drafted for public release in late-June 2017, and publicly released in summer 2017<\/p>\n

QUICK REVIEW<\/strong><\/h3>\n

The primary aims of the task force work were:<\/p>\n

    \n
  1. To develop recommendations for climate-related disclosures that could promote more informed investment, credit, lending, and insurance underwriting decisions;<\/li>\n
  2. This, in turn, would enable stakeholders to understand the carbon-related assets in the financial sector and the financial system’s exposure to climate-related risks through their activities.<\/li>\n<\/ol>\n

    \"\"<\/p>\n

    The recent release of the task force’s draft report is an important heads up to boards and managers in many sectors — the carbon-related risk \/ the climate change risk is now abe very important consideration for the financial sector players going forward, in the various ways they do business with your company.<\/strong><\/em><\/p>\n

    It is important to note that the FSB task force focused on the possible financial impact of climate change on a corporation, especially in the financial services sector —\u00a0 and by extension of the impact of the corporation on the environment.<\/em><\/p>\n

    This approach covers the two halves of the capital markets whole:\u00a0 public companies seeking capital and those providing the capital (or dealing with other aspects related to the company).<\/p>\n

    These are the four top-line thematic areas for corporate disclosure on climate change matters across sectors and industries; these are to be disclosed in either the regular public filings or in supplemental reports on a voluntary basis (at least so far):<\/p>\n