As climate change has increasingly become a focus for investors
and regulators, financial institutions have started to assess
financial impacts of climate change on their businesses. These
assessments, often strategic in nature, now need to expand to
include quantitative risk analyses, integrated into existing risk
management frameworks.
Full financial impacts of climate change remain uncertain, as
the extent to which climate will change is being shaped by current
actions taken by governments, corporates and the wider community.
However, impacts can already be felt today through shareholder
pressure and shifting investor preferences.
To increase transparency on corporates' exposures to climate
change-related risks, the Task Force on Climate-Related Financial
Disclosures (TCFD) delivered recommendations on how risks and
opportunities should be reported in annual financial statements of
public companies. 1 Disclosure recommendations
include governance frameworks,
