Climate Change Disclosure of the Financial Sector (original) (raw)

The impacts of climate change continue to grow in severity. Consequently, there is a call for action to all stakeholders, including the business community and the financial sector. An important piece in analyzing the impact of different groups on climate change and climate change solutions is transparent reporting about impacts on climate change and contributions to mitigate and adapt to climate change. Currently, the Tasks Force on Climate Related Disclosures (TFCFD), founded by the Group of Twenty (G20), is addressing climate-related reporting in the financial industry and attempting to establish standards to enable the industry to address climate-related risks and opportunities. An empirical study conducted by the authors, however, found that the industry still has some work to do to address climate change in their reporting. Based on the current state of reporting, recommendations include: that the financial sector develops indicators and risk assessment models for climaterelated risks that go beyond direct materiality and include indirect risks to be able to address future risks; that climate-related accounting for financial products and services should be developed and implemented; that the financial industry should implement standardized carbon disclosure; and that climate-related risk assessment should be offered as a service for the financial sector's clients.