Policy Pulse - 17 December 2019 - Daniela Costea
Urgent changes are needed to meet the goals of the Paris Agreement, “decarbonizing” the economy by 2050.
However, considering the demographic trends, global urbanization and economic stability, setting a carbon-free policy in the very near future can be more an aspiration than a target for certain countries. While major emitters should reach net-zero greenhouse gas emissions by 2050, developing countries have historically contributed little to greenhouse gas emissions but most developing states require carbon-intensive investments to reduce poverty.
Industrialization, while it is important for the economic growth and development of a society, can also be harmful to the environment. Climate change may affect the business in a number of ways, so in response we must adapt the business to climate change. This implies quantitative analysis of company’s portfolio, as well as qualitative scenario analysis, assessing the risks and opportunities associated with climate change.
How to integrate climate-related information within existing reporting practices
The reporting landscape is evolving. There is a continuous development of climate-related reporting, in addition to wider sustainability reporting.
Reporting for climate change is diversified, with many requirements, having different purposes and different audiences which bring complexity.
The Corporate Reporting Dialogue (CRD) - is a platform that brings together few organizations (e.g. GRI, IIRC, CDSB, CDP) focusing on alignment across the reporting frameworks and standards.
In June 2017, the Task Force on Climate-related Financial Disclosures (TCFD) presented its recommendations concerning climate-related information. This is a general reporting framework for all types of organizations.
The Task Force structured its recommendations around a matrix with four areas:
Governance
Strategy
Key indicators (metrics and targets)
Scenarios planning for the future (risk management)
Source: 2019 Status Report - Recommendations of the Task Force on Climate related Financial Disclosures.
These disclosures are important for decision-making purposes and certainly the materiality is a key element.
The disclosure of climate-related financial information is growing, already adopted by many companies- yet the process must be accelerated. Implementing the TCFD recommendations is a true journey, below are some key takeaways with significant potential to set global reporting precedents.
Key takeaways (+/-):
Source: Based on 2019 Status Report - Recommendations of the Task Force on Climate related Financial Disclosures.
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About the author: Daniela Costea has extensive experience in reporting, strategy and finance. Her passion is to help pioneer the integration of sustainability to improve decision making.
About Veritas Global: Our vision is to have a positive impact on the world through truthful advice informed by robust analysis. We are a premier provider of tailored solutions on climate change, international conflict economics and infrastructure.
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