Policymakers have an interest in ensuring that the financial system is resilient to all forms of risk. In April 2015 the G20 asked the FSB to consider risks related to climate change and in November the FSB proposed the creation of an industry-led Task Force to develop recommendations on climate-related financial disclosures. Appropriate disclosures are a prerequisite for financial firms not only to manage and price climate risks accordingly but also, if they wish, to take lending, investment or insurance underwriting decisions based on their view of transition scenarios.

In December 2015 the FSB launched the industry-led Task Force on Climate-related Financial Disclosures (TCFD). The Task Force will develop a set of recommendations for consistent, comparable, reliable, clear and efficient climate-related disclosures by companies, as requested in the FSB’s proposal. The TCFD has concluded that its recommendations will apply broadly to financial and non-financial firms.

The wide range of existing disclosure schemes relating to climate highlights the importance of companies and relevant stakeholders reaching a consensus on the characteristics of effective disclosures and examples of good practices. The industry-led Task Force will take account of the work of other groups related to effective disclosures. However, the TCFD’s initial report highlights that whilst there are a significant number of existing climate disclosure regimes, only a limited number of them consider climate-related financial risks.

Michael R. Bloomberg is Chair of the Task Force, which includes users and providers of disclosures from a wide range of backgrounds. The Task Force published its phase 1 report in April 2016. During the second phase, the Task Force’s work will focus on delivering specific recommendations for voluntary disclosure principles and leading practices, if appropriate, with a view to issuing a report for public consultation by end-2016. As part of its work the Task Force will conduct public outreach to engage a wide and varied range of stakeholders as it develops its recommendations.

The work of the TCFD builds on the successful work of the Enhanced Disclosure Task Force (EDTF), which was created to provide recommendations on developing more effective bank risk disclosures.

More details about the Task Force are available on the TCFD website.