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New Climate Goals are Driving Demand for Better Disclosure

Last week, US President Biden’s Climate Summit saw several countries announce new commitments to increase their ambitions in reducing GHG emissions. The US, under President Biden, vowed to reduce its emissions to at least 50% by 2030, more than doubling the country’s prior commitment under the 2015 Paris Agreement. Canadian Prime Minister Justin Trudeau committed to slash Canada’s emissions by at least 40% by 2030 compared with 2005 levels – a significant increase from Canada’s previous pledge of 30%. Other countries like Japan, the UK, and South Korea also released new commitments to shift off of fossil fuels and speed up decarbonization.

Globally, we’re seeing governments move forward with a variety of public policies, from phasing out coal electricity generation and mandating electric vehicles to increasing carbon prices. Coming out of the COVID-19 economic downturn, governments are investing billions in low-carbon infrastructure and innovation. The speed and breadth of these policies are changing yesterday’s political possibilities into today’s reality. 

The latest climate commitments from national governments follow a flurry of corporate announcements in the first half of 2021. Whether it is GM announcing a goal to sell only electric vehicles by 2035, or BlackRock committing to shift its investment portfolio to net zero, businesses are increasingly putting their weight behind scaled-up climate ambition.

What do the flurry of new national climate targets, government policies and corporate climate commitments have in common? All will require a massive reallocation of public and private capital out of carbon-intensive investments and into climate-positive projects. 

A critical component of this capital shift involves ensuring credible, transparent information on climate risk and opportunity to properly inform investment decisions. This is why the framework from the Task Force on Climate-related Financial Disclosures (TCFD) is rapidly becoming the emerging global standard for capital market transparency on climate change.

The momentum for TCFD 

The TCFD’s reporting recommendations are considered global best-practice for companies to report financial risks and opportunities related to climate change.  The TCFD was established in 2015 by the Financial Stability Board, which was chaired by Mark Carney, the then-Governor of the Bank of England. The TCFD was chaired by Michael Bloomberg, former Mayor of New York, and comprised an initial group of 29 members from large banks, insurance companies, asset managers, pension funds, and credit rating agencies, among others. The TCFD’s recommendations were launched in 2017 and provide a consistent framework for companies to disclose climate-related information to markets, focusing on four pillars: governance, strategy, risk management, and metrics and targets. 

Governments around the world are making TCFD-aligned reporting mandatory. Swiss companies in all sectors of the economy need to comply with the TCFD framework. The UK has said it will require companies to comply with TCFD by 2025. New Zealand is also creating regulations to phase in mandatory disclosure consistent with the TCFD for financial institutions. In Canada, the federal government’s latest budget committed to working with provincial regulators in order to make climate disclosures consistent with TCFD recommendations, and mandated that Crown Corporations report in alignment with the TCFD recommendations.

It is not just governments pushing for TCFD. As of today, there are over 2,000 TCFD supporters, spanning sectors such as financial services, energy, manufacturing, transportation, and consumer goods. The world’s largest asset managers, like BlackRock and State Street, are calling for their portfolio companies to ensure their disclosures are aligned with the TCFD recommendations.  

Governments are mandating TCFD reporting, and investors are demanding it. Is your business ready to respond?

Manifest’s SaaS platform expedites TCFD reporting 

Many organizations provide consulting services for TCFD compliance and reporting. Unfortunately, these consulting engagements are often accompanied by long lead times and a high price tag. 

We at Manifest Climate have used our climate consulting expertise to build a SaaS platform that helps companies implement TCFD best practices simply, quickly, and cost-effectively. After using our platform, companies receive a TCFD maturity assessment outlining how their climate disclosures align with the TCFD framework, where climate-related risks and opportunities are disclosed in their formal reporting, their current gaps, and how to improve alignment of their disclosures with the TCFD recommendations. Our climate experts enhance our SaaS platform by working with you to identify all of the ways your organization is addressing climate change but not necessarily calling it ‘climate,’ as well as helping you chart a path forward in your TCFD journey.

Interested in getting started with, or enhancing, your TCFD-aligned reporting and learning more about Manifest Climate’s SaaS platform? Contact us today.