Anthesis Adds Support to Task Force on Climate-Related Financial Disclosures

January 17, 2020 | News

“We are entering a decisive decade, when markets will increasingly be disrupted by the physical implications of climate change and society’s efforts to mitigate these. Understanding how organisations will be impacted and how prepared they are to manage and adapt to the related challenges will be vital in allowing investors to properly value investments and make informed investment decisions.”

Stuart McLachlan, CEO, Anthesis

Anthesis Group is delighted to announce that it has joined over 930 leading global organisations in becoming a Supporter of the Task Force on Climate-Related Financial Disclosures (TCFD).

Formed by the G20’s Financial Stability Board and chaired by the Bloomberg founder and former New York Mayor, Michael Bloomberg, the aim of the TCFD is to develop voluntary, consistent climate-related financial risk disclosures for use by companies in providing information to investors, lenders, insurers and other stakeholders.

Anthesis Group CEO, Stuart McLachlan, said: “We are delighted to add Anthesis’ name to the list of organisations publicly supporting the work of the TCFD.

“We are entering a decisive decade, when markets will increasingly be disrupted by the physical implications of climate change and society’s efforts to mitigate these. Understanding how organisations will be impacted and how prepared they are to manage and adapt to the related challenges will be vital in allowing investors to properly value investments and make informed investment decisions.

“Consistent standards for those disclosures and their presentation alongside core financial information will be essential to that process and the TCFD’s work in that regard is vitally important.”

The TCFD has considered the physical, liability and transition risks associated with climate change and what constitutes effective financial disclosures across industries. The work and recommendations of the TCFD aim to help companies understand what financial markets want from disclosure in order to measure and respond to climate change risks, and to encourage firms to align their disclosures with investors’ needs.

Crucially, the TCFD recommends that the climate related disclosures are presented within an organisation’s main financial filings and that it presents both the risks and opportunities that climate change could pose to it following the completion of a scenario analysis.

The disclosures should then detail the governance structure, strategy and risk management and reporting framework in place to monitor and mitigate the risks, and the potential for maximising the opportunities afforded by the transition to the low carbon economy.

Although a voluntary initiative, reporting according to the TCFD’s recommendations is now a formal requirement for signatories of the UN Principles of Responsible Investment (PRI). This mirrors a general trend for governments and central banks to increasingly require specific climate and wider sustainability related metrics and information disclosure.

The TCFD has in its work considered and sought to align its recommendations with the existing sustainability reporting frameworks such as the CDP (formerly the Carbon Disclosure Project) and the Global Reporting Initiative.

Stuart McLachlan added: “Anthesis has been helping clients to report on their sustainability performance and credentials via frameworks such as the CDP and GRI since our firm’s inception and we are delighted to see the TCFD acting to further mainstream this process.

“Between drivers such as the PRI’s requirement for TCFD compliant disclosures and domestic regulations, such as the UK’s new Streamlined Energy and Carbon Reporting legislation, we expect to see numerous organisations either start or significantly enhance their climate risk management during 2020.

“As well as creating information to share with stakeholders, the analysis required will be incredibly valuable in helping organisations to understand whether their strategy, operations and products or services are fit for the future.”

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Tim Clare
Director, UK
Tim is the European lead for ESG at Anthesis Group, based in London. He helps his clients, particularly in private equity, to respond to the ESG agenda. Tim has broadened the scope of their due diligence to encompass ESG factors, helped develop their internal ESG policies and management systems and has worked with their portfolio companies to improve their ESG performance.

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