Climate-related risk – Preparations should start now

Warning from Carney and Bloomberg…

Mark Carney and Michael Bloomberg are warning of the growing climate-related risk we face, but also highlighting the opportunities[1] for strategic minded entrepreneurs.

Is your organisation exposed to climate-related risk without appropriately managing the implications?

Organisations issuing financial instruments have an obligation to disclose material risks, and lenders, insurers and investors should take those risks into account in capital allocation and financial decisions.

Few organisations are well-placed to account for climate-related risk: preparations should start now.

Their Task Force recommends disclosure

The Michael Bloomberg led Task Force on Climate Related Financial Disclosures (TCFD) is recommending that organisations disclose how they intend to manage climate-related risk. This will boost stakeholder confidence in individual organisations and the whole financial system. Disclosure should include the elements shown in the graphic below[2].

Can your organisation meet the challenge?

GovStrat Diag

Please consider the questions below, if you can’t answer in the affirmative, it’s time to take action!

Do your governance arrangements include responsibility for transparent management of climate-risk? (e.g. investment risk in, potentially, stranded fossil fuel related assets)

Is your organisation aware of the implications for its balance sheet if society gets on track to achieve the UN greenhouse gas targets?

If governance and strategy are in place, has the organisation implemented a monitoring and reporting regime to manage the climate-related risk?

CCE supports climate-related financial disclosures

Climate Change Economics Ltd (in association with risk experts PSPC Ltd) provides advice and analysis so organisations can better manage the climate-related risks they face.

If you would like to bring your organisation up to global best practice, or simply know more about the issues, then please contact Peter Roscoe for a no obligation discussion.

Peter Roscoe

Director, Climate Change Economics Ltd

Web: www.climatechangeeconomics.co.uk

email: peter@climatechangeeconomics.co.uk

Twitter: @PeterRoscoeCCE

Mobile: 07496121623

[1] https://www.theguardian.com/commentisfree/2016/dec/14/bloomberg-carney-profit-from-climate-change-right-information-investors-deliver-solutions

[2] TCFD (2016) ”Recommendations of the TCFD”, https://www.fsb-tcfd.org/publications/recommendations-report/

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