• FutureTrack

Mandatory climate risk assessment and disclosure

Mandatory board-level management and disclosure of the risks and opportunities presented by climate change is now imminent. It is vital that organisations within scope engage proactively in order to provide meaningful disclosures. ESI Monitor’s professional consultancy team are well positioned to advise your business and to carry out assessments.

Assessing and reporting on climate change exposure is now a vital part of governance and risk management for companies today. Those business with energy or land-intensive operations, or those with investments in these sectors, will find that a climate change risk assessment will show how exposed they are to both the physical and economic risks of climate change. The risks include long-term, chronic impacts such as rising sea levels, changing weather patterns and sustained temperature rises, as well as immediate risks such as shocks to financial systems as organisations struggle to interpret and adjust to new regulations and information.

For many jurisdictions, TCFD is fast becoming the de facto standard for companies to assess and disclose their climate risk exposure. In the UK, the Treasury has published a Roadmap expecting all listed UK companies to be providing TCFD-aligned disclosures by 2023 (representing a market capitalisation of £2.9 trillion). Banks, insurance companies, asset managers and pension schemes representing a further £26 trillion will also be covered by 2023.

Similar requirements are now likely to apply to Guernsey financial services companies following the Guernsey Financial Services Commission’s consultation ‘Spring Green’, published in March this year. The Commission proposes to update its Finance Sector Code of Corporate Governance to include an obligation on boards to “consider the impact of climate change on the firm’s business strategy and risk profile” and make disclosures where appropriate. The rule is expected to apply from any financial year starting from October 2021.

Our experts are ready to advise and are well versed in applying the TCFD recommendations to produce a clear and insightful risk register and disclosure reports, and our digital Framework provides an efficient and effective toolkit to measure and record the Scope 1, 2 and 3 greenhouse gas emissions that must be disclosed under TCFD.

Contact us today at hello@futuretrack.info to ensure your organisation is on track to disclose.