Posted on Oct 21, 2020 at 12:50 PMUpdated Oct 21, 2020, 12:51 PM
The British regulator has not yet finalized its decision, but listed companies across the Channel can already find a reason: they should soon be forced to communicate on their exposure to climate risks, based on the recommendations of the Task Force on Climate-related Financial Disclosure (TCFD), which operates under the Financial Stability Board (FSB). The objective: to help the market to better “price” these risks, and investors to make better informed choices.
The Financial Conduct Authority (FCA), which is due to unveil the new rules this winter, warned in March that it wanted to force all companies for which London is the main listing place, to publish from 2022 the points prescribed by the TCFD, or failing that, to justify oneself (“comply or explain”). This involves in particular describing how the firm supervises its risk management, to what extent its strategy would withstand different temperature scenarios, what its climate risk management procedures are and what their performance is with regard to their goals.