Mandatory climate risk disclosure key to improving decision making

Reacting to the Chancellor of the Exchequer’s announcement today on the UK’s roadmap to mandatory climate-related disclosures, Nick Molho, Executive Director at the Aldersgate Group, said: “The Government’s intention to legislate for companies to disclose their exposure to climate risks in line with the TCFD recommendations [1] is an essential step in improving the quality, comparability and transparency of climate-related disclosures across the economy and one which the Aldersgate Group has long called for [2]. To ensure that this new reporting regime results in better decision making, it will be important that companies be required to report how they are managing the climate risks they have identified.”

Nick Molho added: “Government policy can support businesses in adapting to TCFD aligned reporting by providing supportive guidance, setting up a corporate reporting lab to test different reporting approaches, and looking at how existing disclosure requirements can best be integrated within the TCFD reporting framework to avoid duplication of effort.”

Nick Molho added: “Today’s announcement of the UK’s first Sovereign Green Bond in 2021 is a welcome step in financing projects which deliver on the UK’s climate and environmental ambitions. There is still further work to do in delivering the Government’s objective of greening the financial system and growing the flows of green finance. Developing green finance standards, setting up a National Investment Bank and reviewing prudential requirements to make it easier to invest in low carbon infrastructure are all essential measures that will help unlock the private finance needed to deliver the UK’s net zero emissions target and other environmental goals.” [3]