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FOR IMMEDIATE RELEASE

Ceres Welcomes Task Force Recommendations To Advance Climate Risk Disclosure

Ceres has supported the TCFD’s efforts to advance climate risk disclosure over the past year. We sincerely appreciate the work of Michael Bloomberg, the Chairs and Members, former U.S. Securities and Exchange Commission (SEC) Chair Mary Schapiro and the Secretariat.
Boston Dec 14, 2016

In response to the Financial Stability Board’s Task Force on Climate-related Financial Disclosures’ (TCFD) recommendations, Ceres President Mindy Lubber released the following statement:

Ceres has supported the TCFD’s efforts to advance climate risk disclosure over the past year. We sincerely appreciate the work of Michael Bloomberg, the Chairs and Members, former U.S. Securities and Exchange Commission (SEC) Chair Mary Schapiro and the Secretariat.

By providing a clear, voluntary global standard for climate risk disclosure in financial filings—at the request of G20 nations—the TCFD report will play a critical role in harnessing the power of markets to reduce the financial risks of climate change and advance economic opportunities.

Ceres has spent decades working to advance climate risk disclosure. From its inception, Ceres has provided the TCFD with insights for improving climate risk disclosure, from our work petitioning the SEC for climate disclosure guidance, building the Climate Disclosure Standards Board, and collaborating with Global Investor Coalition on Climate Change (GIC) members on consistent, comparable disclosure in financial filings worldwide.

The TCFD report provides several well-considered disclosure recommendations that investors, businesses and governments should welcome for clarifying the climate risk disclosures that companies need to provide. These recommendations include:

  • Describe potential impacts of different scenarios including a two degree scenario on business, strategy and financial planning: By providing this recommendation for all sectors, the TCFD has emphasized that it is critical that all companies prepare to be resilient in a fast approaching clean, renewable, low carbon global economy.
  • Detailed two degree scenario analysis for the energy sector: Energy sector companies should describe the scenarios used, including the two degree scenario, and the key assumptions and considerations underlying each scenario. This recommendation is aligned with widely supported shareholder proposals calling for qualitative and quantitative analysis of portfolio resilience to two degree scenarios, especially in the energy sector.
  • Disclose GHG emissions: This recommendation for all sectors emphasizes that companies must allow investors to gauge progress in reducing emissions and to understand if companies’ climate strategies are resulting in rapid emissions reductions.
  • Disclose information on governance, strategy, risk management and metrics and targets: By providing 11 disclosure recommendations in these four categories, the TCFD has covered key aspects of climate risk disclosure that are critical to investors, particularly
    • Companies must have robust board and governance systems in place around climate risks and opportunities.
    • Companies must develop comprehensive climate strategies that consider various aspects of the business, short, medium and long term time frames, and the ongoing transition to a low carbon global economy.
    • In addition to assessing climate-related risks thoroughly, companies must disclose metrics and targets that investors and stakeholders can use to assess progress and affect investment decisions, including targets related to water, energy usage and efficiency, land use, and revenues from products and services designed for a low carbon economy.

 

We look forward to providing a response to the TCFD’s public consultation.  In the coming year, we will strongly encourage G20 and other nations to endorse the TCFD’s work and fully support its integration by companies and investors into their financial filings.

Ceres is also releasing a framework to provide guidance to companies about how to develop 2 degrees scenario analysis consistent with the TCFD’s recommendations.  Finally, we encourage the Financial Stability Board to build on the TCFD’s accomplishments by issuing regular annual reports on progress by companies in adopting the TCFD’s recommendations.

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