Carney’s CEO Club Gives $3.3 Trillion Muscle to Climate Fight: reads the Bloomberg headline. 'Companies with a combined market value of more than $3.3 trillion -- equivalent to all the goods and services produced annually by Germany -- threw their weight behind Carney’s final report on climate change published on Thursday.' The story notes that 'Stockholders are overruling corporate boards on the environment in record numbers at annual meetings this year. They’ve supported to climate change proposals at companies such as Exxon Mobil Corp., PPL Corp. and Occidental Petroleum Corp. ... Since the FSB’s draft report in December, the panel expanded recommendations on executive pay, urging all companies to link compensation to performance on climate-related topics. It says all organizations that see climate-related risk as “material” should tell investors if they include environmental targets in pay criteria. (Carney’s CEO Club Gives $3.3 Trillion Muscle to Climate Fight, 29 June, Bloomberg). Bloomberg also carry a TV interview with Mark Carney (BOE Governor Mark Carney on Climate Change).
Growing demand from investors for climate-related financial information: Reuters note that "there are concerns in the financial community that assets are being mispriced because the full extent of climate risk is not being factored in, threatening market stability. As a result, demand is growing from investors, shareholders, lenders, underwriters and the public for more meaningful and transparent climate-related financial information." (G20 task force issues framework for climate-related financial disclosure, Reuters). In a separate story Investors are slowly starting to push companies to fight climate change they report on a survey of '13 leading public and corporate pension schemes in Europe, Asia and North America managing a total $1.1 trillion said they were committed to engaging firms on their climate strategy. Three ...said explicitly that divestment was an option if talks were unsatisfactory.'
Global companies pledge transparency, Shell only oil company: AFP write 'Industrial powerhouses such as Unilever, Dow Chemical Company, Tata Steel and PepsiCo have also backed the move towards climate transparency, along with the "Big Four" professional services giants, and ratings agencies Moody's and S&P Global. Royal Dutch Shell is, so far, the only oil and gas company to tender its support.' They note 'the fossil fuel industry is especially vulnerable to questions about climate risk as the race to decarbonise the world economy gathers pace. A report released earlier this week found that, on average, 30 percent of investments planned by 69 oil and gas majors over the next decade - worth more than $2 trillion - could be wasted if the world economy retools to cap global warming at two degrees Celsius.' (Global companies pledge transparency on exposure to climate change risk, AFP). Natural Gas World and UPI also cover Shell's support, with the former noting 'some companies have come under fire for not facing up to the fact that they might not ever produce all their booked reserves of oil and gas at any price. Writing down reserves could hurt their share price.'
G20 cracks whip on climate risk for the fossil industry, report The Daily Telegraph. "The G20’s super-regulator has called for sweeping new disclosures on climate risks, warning that up to $43 trillion of assets could ultimately be at risk for the fossil-fuel industry and a raft of other companies exposed to global warming" writes International Business Editor Ambrose Evans Pritchard.
'Climate-change risks have become an increasingly mainstream concern for financial institutions and big companies, which see both a real menace from global warming and a regulatory threat from governments seeking to lessen its impact', according to the Wall Street Journal. The 100 CEO's support is 'the first sign of a major shift in market sentiment following the publication of new disclosure guidelines from the international Financial Stability Board (FSB)'sayBusiness Green. In an analysis article they ask 'Will the new TCFD disclosure guidelines change how companies think about climate risk?', with Jane Stevenson, CDP, answering it will create buzz "because the Task Force is an exclusively business-led group of individuals representing global commercial organisations. They represent a very substantial driver of global economies."
Global coverage includes:
Mandatory regulation calls: Writing in RI, TCFD member, Steve Waygood, from Aviva, says: "We are sceptical that voluntary disclosures will get us far enough, fast enough to effectively combat climate change; research shows it is only when governments mandate disclosure that it becomes widespread, consistent and comparable." He highlights need for:
The Guardian report that 'Over the next year, the TCFD would work to monitor and assist companies implementing their recommendations' and quote TCFD member Yeo Lian Sim, from Singapore Stock Exchange, saying that "although the recommendations were made as a voluntary code for which there is a compelling business case to adopt" ... "they might one day become regulated for in some economies if they are widely adopted." In the UK, The Aldersgate Group’s executive director Nick Molho told Edie: “Given the UK’s aim to become a hub for green finance, the government should take note of the ambition of these recommendations and strengthen the breadth and scope of its own mandatory carbon reporting regulations in line with the industry standard.”
Banks, investors & insurers back recommendations: Forbes note that 'Major banks, insurers and investors feature among more than 100 business leaders’ supporting the recommendations. ... Among the banks are Bank of America, Barclays, HSBC, ING, Australia and New Zealand Banking Group (ANZ) and more, while insurers include Aviva plc and AXA Group.' Both IPE and Responsible Investor ($) highlight support from European institutional investors, with Peter Damgaard Jensen, CEO of Danish pension fund manager PKA and Chair of IIGCC saying "Given their importance at the top of the investment supply chain, large asset owners and asset managers also recognise they have an important role to play in driving the swift and widespread adoption of this framework.'"
More homework for fund managers: Financial News say the TCFD 'has not stinted in laying out the part investors have to play in the low-carbon transition' and has 'given fund managers plenty of food for thought. … The Task Force now wants fund managers to embrace a slew of additional climate-change disclosure requirements of their own. … Its report contains many examples of "supplemental guidance for asset managers'. These advise professional investors to do things like "describe how each product or investment strategy might be affected by the transition to a low-carbon economy"; "describe their metrics used to assess climate-related risks and opportunities"; and "engagement activity with investee companies to encourage better disclosure".' In an analysis of the report on RI, Daniel Brookesbanksays the TCFD report "could be deemed a success if it helps to focus people’s minds on the whole concept of materiality" (Responsible Investor, free access). Pensions & Investment, Footprintnews, and Ship & Bunker also cover story.
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