INSIGHT by Vigeo Eiris
Vigeo Eiris has launched its TCFD Climate Strategy Assessment. The new assessment is designed to measure the extent to which climate related risks and opportunities are being reported on by companies.
| Our TCFD Climate Strategy Assessment offers a granular overview on how companies are integrating climate risk considerations into their governance, strategy and risk management processes. Aggregated scores are provided on a scale of 0-100 alongside a granular data-set that provides indicator level information. To date, 2855 companies have been assessed against our TCFD Climate Strategy framework and already, some early adopters across sectors and regions are visible.
〉To accompany the launch, we have produced a joint research paper alongside Four Twenty Seven. In our research paper, we examine where companies stand today in terms of adopting the TCFD recommendations. Unsurprisingly our research indicates that most companies still lag behind in terms of disclosures. Nonetheless, there are some signals that the TCFD recommendations have started to be adopted across sectors and geographic zones, with early leaders emerging. Alongside, Four Twenty Seven we used the energy sector as a case study to review how companies’ physical risk exposure compares to their risk disclosure. We find that many highly exposed companies do not yet thoroughly disclose their climate risks, which is important for investors to consider when reviewing disclosures.
〉The recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) were launched in 2017. They consist of a set of voluntary, climate-related financial risk disclosures for companies. The objective of these disclosures is to provide material information to investors, lenders, insurers and other stakeholders to support a more transparent and efficient market, that can begin to accurately price climate risks. To progress towards more efficient, resilient and sustainable capital markets, disclosures on these elements will need to become the norm over time. Over the coming years, we will continue to track and measure how TCFD disclosures evolve over time.
To read the paper in full, click HERE
To access a sample of our new TCFD Climate Strategy Assessment please contact investorcustomer.service@vigeo-eiris.com
| All opinions expressed are those of the author. investESG.eu is an independent and neutral platform dedicated to generating debate around ESG investing topics.
