The UK Financial Council reports that companies need to step up their reporting on climate-related issues. The FRC’s latest 86-page letter reports on their expectations of investors and their reporting on climate-related issues.
In addition, this report recommends that companies use the framework developed by the Task Force on Climate-Related Financial Disclosures, which is based on four areas from 2017. These areas are as follows:
Government, strategy, risk management, indicators and their objectives.
Sir Jon Thompson, CEO of the FRC, says in one of his statements that investors are demanding more and more information and transparency from companies about the challenges of climate change. For this reason, companies are required to immediately increase their transparency and adapt their reporting according to requirements or expectations in order to meet this demand.
This letter raises some questions that companies can ask when implementing the TCFD framework. One of the questions is about metrics (usage) and goals: What is the most relevant guidance for monitoring and managing the impacts of climate-related issues? How were these identified and how were they linked to the strategy and business model?
Companies are trying to understand the long-term effects of climate change on their business. This means that investor relations must collaborate with other departments in the planning process. This planning includes a comprehensive consideration of the future and various climate scenarios. Thus, such an analysis requires a very high level of coordination in most areas such as strategy, finance, risk, reporting, corporate secretariat, sustainability, investor relations, management and board.