The Institute and Faculty of Actuaries (IFoA) and sustainability body IEMA have today published a new guide to help companies engage with the Task Force on Climate-related Financial Disclosures (TCFD).
The guide draws on insights from financial and sustainability risk practitioners, outlining how a wide range of stakeholders can understand the TCFD's recommendations for disclosing climate risks to investors.
Details will be discussed further during a webinar on Friday 10 July at 10am BST, led by the guide's co-authors Paul Pritchard, IEMA Fellow, and Louise Pryor, IFoA president-elect and IEMA Fellow.
“IFoA members and IEMA sustainability professionals are ideally placed to bring their complementary experience to bear on this important issue,” Pryor said.
“Actuaries’ expertise allows them to identify and manage long-term risk and these skills can play a vital role in driving the TCFD’s recommendations.
“This guide is designed for users of climate-related disclosures and reflects the type of fruitful collaboration between specialists that is becoming increasingly necessary as we respond to the nature of the systemic risks that the world is currently facing. I would like thank all those involved.”
More than 1,000 organisations – including banks, asset managers and insurers – now support the TCFD, which aims to drive capital towards low-carbon companies and projects by helping investors make smart financial decisions.
The governments of Belgium, Canada, Chile, France, Japan, Sweden and the UK also support the initiative, which was set up by the Financial Stability Board in 2015, with its recommendations published two years later.
Stakeholders can refer to the new guide when seeking to understand disclosures, and use it for suggested follow-up questions for the organisations that have disclosed them.
“We are facing a potentially existential risk with huge associated uncertainties that challenges existing financial risk methodologies,” Pritchard said.
“The appropriate response must surely involve building on the capabilities of current financial risk models to develop approaches, transparently drawing on a whole range of skills and experience.”
Author: Chris Seekings
Image credit: iStock
This article was published as part of Predictions, the future-gazing thought leadership sub-brand of The Actuary covering emerging trends within the insurance, finance and actuarial sectors - you can find out more on the Predictions homepage.