One of the most significant, and perhaps most misunderstood, risks that organisations face today relates to climate change. For many investors, climate change poses significant financial challenges and opportunities, now and in the future. At the same time, the risk-return profile of organisations exposed to climate-related risks may change significantly as such organisations may be more affected by physical impacts of climate change, climate policy, and new technologies.
To help identify the information needed by investors, lenders, and insurance underwriters to appropriately assess and price climate-related risks and opportunities, the Financial Stability Board established an industry-led task force: the Task Force on Climate-related Financial Disclosures (Task Force). The Task Force developed four widely adaptable recommendations on climate-related financial disclosures that are applicable to organisations across sectors and jurisdictions. The Task Force expects to advance the quality of mainstream financial disclosures related to the potential effects of climate change on organisations today and in the future and to increase investor engagement with boards and senior management on climate-related issues.