PRI, Baker McKenzie report: climate change a material risk

The PRI and global law firm Baker McKenzie have found in their new report that climate change is a material risk and that, in the six markets examined, the FSB Task Force on Climate-related Financial Disclosures (TCFD) recommendations will assist significantly in implementing existing material risk disclosure regulation for companies. 

The Climate disclosure country reviews can be used by investors to inform their engagement on climate change disclosure with investee companies, regulators and stock exchanges. Companies can use the report to gain a better understanding of investor climate disclosure needs.

Climate change is the highest priority ESG topic for PRI signatories, yet investors lack adequate disclosures from companies to understand how well-positioned their investment portfolios are for climate-related risks and opportunities. 

The PRI and Baker McKenzie teamed up to review how the task force‚Äôs recommendations can be applied practically at a local country-level.  The reviews examine Brazil, Canada, the EU, Japan, the USA and the UK.  

The PRI recommends practical steps for in-country implementation of the TCFD recommendations, including government and regulatory endorsement of TCFD and investor engagement with companies to disclose in line with the TCFD recommendations.

The PRI will take action to support TCFD implementation, including convening collaborative investor engagement with companies on climate disclosure and transition planning, asking regulators and stock exchanges to publicly support TCFD, as well as aligning the PRI Reporting Framework with the TCFD recommendations to support enhanced investor disclosure on climate change to clients and beneficiaries.

The report follows on from the June 2017 publication of the recommendations of the FSB TCFD.  The task force was appointed by Financial Stability Board Chair and Bank of England Governor and Mark Carney and is chaired by Michael R. Bloomberg, with the PRI Chair and several PRI signatories serving on it. 

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