81% USE TCFD AS THEIR CLIMATE REPORTING FRAMEWORK

Eighty-one percent of respondents in this week’s Airmic Big Question said their organisation uses the Task Force on Climate-Related Financial Disclosures (TCFD) as one of their climate reporting frameworks. A further 56% use the Science Based Targets initiative (SBTi), even as a controversial carbon-setting plan proposed by the global standard-setting body threatened to undermine its credibility earlier this year.

While the choice of reporting framework was generally made as a result of jurisdictional or parent company requirements, respondents also cited other reasons for their choice, including the validation of their strategic and operational commitments, for reputational considerations, as well as to engage with stakeholders such as investors.

Julia Graham, CEO of Airmic, said: “Organisations have the opportunity to turn regulations and reporting requirements such as the TCFD to their strategic advantage. For instance, TCFD readiness reviews can help align the organisation’s key stakeholders on what it wants to achieve from its TCFD project, and ensures that any relevant work performed across the organisation to date is taken into account from the start.”

The TCFD framework is endorsed by the UK government, and is mandatory for large entities in the private sector.

Hoe-Yeong Loke, Head of Research, Airmic, said: “There is an important role for climate reporting frameworks in aligning the activities within an organisation, as well as aligning climate ambitions across the corporate sector with international goals. However, bodies such as the Financial Reporting Council are finding that many climate disclosures produced by organisations have been unclear in terms of concrete actions and milestones to meet the targets they have set. The disclosures also tend to be regarded as a tick-box exercise. Organisations should assess their climate risks more realistically and carefully.”

Airmic has been engaging with its members and partners to help organisations respond to the risks and opportunities from climate change that can be gleaned from the process of producing climate disclosures.

Leigh-Anne Slade, Head of Media, Communications and Interest Groups, Airmic, said: “The challenge facing risk professionals is balancing commercial profit against doing the ‘right thing’ for climate change. They can steer their organisations towards using the right metrics and incremental targets, bringing out not just the risks but also the opportunities. Airmic is actively engaging members through our special interest groups to share best practices, which will ultimately guide their entire business toward achieving net zero."

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You can also find the results here.

Media contact: Leigh Anne Slade
Head of Media, Communications and Interest Groups, Airmic
Leigh-Anne.Slade@Airmic.com
07956 41 78 77