Shell’s chief executive Ben van Beurden today welcomed the recommendations from a report on Climate-Related Financial Disclosures (TCFD).
The TCFD is a global initiative chaired by Michael Bloomberg to get companies across all sectors to assess more clearly and disclose more transparently both the risks and the opportunities presented by climate change. It was set up at the prompting of the Financial Stability Board (FSB).
The task force, which established by G20 and chaired by Michael Bloomberg, drew the support from 100 companies with $11trillion of assets.
The TCFD recommended firms disclose their governance around climate risks and opportunities and the actual and potential impacts of those risks and opportunities on the business. These should both be considered taking into account a global climate pact to limit global average temperature rise to below 2 degrees Celsius.
It also recommends companies provide climate related financial disclosures in their filings.
Despite the overwhelming backing for the task force, all of the recommendations are voluntary.
“The task force’s recommendations have been developed by the market for the market,” said FSB chair and Bank of England governor Mark Carney.
“They set out the disclosures that a wide range of users and preparers of corporate information have said are essential to understanding a company’s climate-related risks and opportunities. Widespread adoption will provide investors, banks and insurers with that information, helping minimise the risk that market adjustments to climate change will be incomplete, late and potentially destabilising.”
Mr van Beurden said companies should be “clear” about how they plan to tackle the energy transition.
“I agree that companies should be clear about how they plan to be resilient in the face of climate change and energy transition,” said Shell CEO Ben van Beurden.
“I believe it is right that it should be transparent which companies are truly on firm foundations over the long-term. I applaud the task force for its work to achieve this aim and I have signed a letter confirming Shell’s support for the initiative.
“The details matter and I look forward to Shell working with the task force on those details. Specifically, how we present forward-looking information in an uncertain world, the disclosure of commercially sensitive data and the feasibility of providing the suggested detail to the standard required of financial filings. Ultimately, however, both Shell and the task force want these disclosures to be fit for purpose.”
