Disclosing the Gap: More Companies Are Reporting Their Climate Risks

October 29, 2020

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by Kelsey Tamborrino (Politico's Morning Energy) More companies are reporting their climate risks, corporate governance on climate change and greenhouse gas emissions and targets, according to an annual update of the Task-force for Climate-related Financial Disclosures. But just one in 15 are testing their resilience against various climate change scenarios.

Countries and regulators have begun making elements of the TCFD part of their mandatory reporting requirements, but companies need to make more progress to ensure investors have proper information about material risks to climate change and so regulators can prevent climate-related shocks to the financial system, Mara Childress, director of global public policy with Bloomberg LP, which supports the task force, said on a call with reporters.

The energy sector was the most likely to align with the voluntary TCFD recommendations used by 1,700 companies representing $13 trillion of market capitalization. But of the 11 recommendations, the energy sector reported its lowest participation in two key areas: resilience of company strategies to climate scenarios and reporting of Scope 1, 2 and 3 greenhouse gas emissions.

Insurance companies came in behind the energy sector on the group's compliance ranking followed by banks and the transportation sector, which is the largest source of U.S. emissions. READ MORE

Banks Don't Want to Lend to Australia's Coal Miners Any More (Bloomberg)

FED CHAIR OFFERS STRONGEST CLIMATE RISK WARNING: (Politico's Morning Energy)

In unprecedented move, Canadian pension funds unite to call for greater ESG standards (The Star)

Green is the new black in boom for clean energy funds (Reuters)

BlackRock unveils new way to assess climate investment risk (Axios)

Report: 10 Major US Insurers Receive Negative Scores on Climate Leadership (Environment & Energy Leader)

DITCHED: Is 2020 the Tipping Point for Fossil Fuel Divestment? (Our Daily Planet; includes AUDIO)

BLACKROCK VOWS ON SUSTAINABILITY: (Politico's Morning Energy)

Insurer AIG steps back from coal, Arctic energy underwriting (Reuters)

Excerpt from Politico's Morning Energy: FED CHAIR OFFERS STRONGEST CLIMATE RISK WARNING: The central bank has a responsibility to protect the financial system from climate change risk, Chair Jerome Powell said Thursday — his boldest signal yet that the Fed sees the issue as a long-term threat to the economy, Pro's Zachary Warmbrodt reports. "The public will expect and has every right to expect that in our oversight of the financial system we will account for all material risks and try to protect the economy and the public from those risks," Powell said at a press conference after the Fed's monetary policy meeting. "Climate change is one of those risks."

He said the "science and art" of incorporating climate change into financial regulation is new and that the Fed is "very actively in the early stages" of getting up to speed and working with officials around the world. The U.S. is widely seen as lagging behind other countries in tackling climate-related risks in finance, Zachary notes, but Powell's comments were the latest evidence that he and other federal agencies are preparing to take it on.

Watch this spot: The issue is expected to become an even bigger priority for the Fed and other U.S. financial regulators should Biden win the presidency. READ MORE