The PRI and seven signatories are participating in a UK and Chinese government-backed pilot on climate-related and environmental risk disclosure. Announced at the ninth UK-China Economic and Financial Dialogue, this initiative has established a leading group of UK – Chinese financial institutions to advance climate reporting practice in both countries.
The purpose of the pilot is to:
- provide a platform for peer exchange on climate and environmental risk disclosures between UK and Chinese financial institutions;
- raise awareness of the financial materiality of climate and environmental risk factors and build capacity in both countries; and
- pilot disclosures against an agreed action plan on an annual basis.
Since the announcement, pilot participants have met several times and in the process developed a joint three-year action plan. Each side is free to determine the details of their own plan, with the intention that each year will build on the last.
Highlights from the second year progress report:
- More quantitative disclosures: to identify and measure where exposure to climate-related issues are likely to be concentrated. Including by UK participants on the use of carbon foot printing, percentage of revenues in high carbon sectors, global warming potential of equity & credit portfolios, Climate Value at Risk.
- Testing of climate scenario tools. The findings of which were presented during joint workshops.
- Increased focus on the application of TCFD reporting in company engagement, selection of fund managers as well as setting targets and assessing the investment or lending strategy.
- The inclusion of leading Chinese insurance companies Pingan and PICC. The former has published a standalone TCFD report, which is summarised in the 2nd year report.
- ICBC (pilot coordinator)
- Bank of Jiangsu
- Industrial bank
- Bank of Huzhou
- China Asset Management
- E Fund
- Avic Trust
- Brunel Pensions Partnership
- Hermes Investment Management
- Environment Agency Pension Fund
- City of London, Green Finance Initiative
- The PRI (pilot coordinator)
This pilot is supported by the UK Department for Business Energy and Industry Strategy (BEIS)’s UK PACT programme
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