360 Energy recently became a supporter of the Task Force on Climate-related Financial Disclosures (TCFD).
We did this to help our clients create more business opportunities from responding to climate change.
The Task Force on Climate-related Financial Disclosures may not be widely known, but in financial and investment markets they are having a major impact.
An increasing number of lenders, investors and insurance underwriters are adopting the guidance provided by the Task Force recommendations. As a result, businesses seeking investment and financing are being assessed on how they are responding to the risks and opportunities posed by a changing climate.
In simple terms, the TCFD has created a disclosure framework so that financial stakeholders can make informed decisions. It is a private sector initiative and currently voluntary. The premise is that financial markets need reliable and transparent financial information to correctly price climate-related risks and opportunities. Without a clear view, markets could experience a very rocky transition to the low-carbon economy.
At 360 Energy we recognize our clients will eventually need to meet TCFD requirements. By supporting the TCFD now, we believe we will be better able to help our clients gain positive assessments and make a successful transition to a lower carbon economy.
The Task Force took shape in 2015, under the leadership of Mark Carney, former head of the Bank of England. At the time, he also chaired the international Financial Stability Board. The TCFD is chaired by Michael Bloomberg, founder of Bloomberg LP.
In 2017 the TCFD issued their recommendations. In essence, all companies need to incorporate climate-related disclosure into four core corporate functions: governance, strategy, risk assessment and performance measures. These thematic areas are intended to interlink and inform each other.
As the environment changes, regulations will evolve. New technologies will emerge. Customer behaviour will shift. Investors, lenders, and insurers need to have a full picture of which companies will endure or even flourish. They also need to be aware of which companies are likely to struggle.
Business owners and leaders will have to keep current with the changes in financial markets that are being driven by the TCFD recommendations.
By supporting the Task Force on Climate-related Financial Disclosures, 360 Energy will be positioned to help our clients better understand their carbon-related assets and their exposure to climate-related risks. Most importantly, our clients should continually improve their ability to create opportunities with the knowledge this will provide.