The current complexity and unpredictability of global markets has brought environment and climate matters to the forefront of trends affecting companies and capital markets. Additionally, there is growing recognition that organisations need to consider whether environmental and climate-related matters are financially material, including the potential impacts from the risks and opportunities associated with climate change.
Major events and initiatives are driving the climate agenda forward. In 2015, a landmark global agreement was reached enshrining into international law the need to limit mean annual global temperature rise to 2°C or lower. Both financial and non-financial groups, through the auspices of the Financial Stability Board, have attempted to address this systemic risk through delivering on the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).
The new, multi-faceted perspectives and criteria being used to judge corporate performance are having profound effects on the way in which companies prepare and include content in their corporate reports, particularly in relation to links between climate and financial information. There is growing demand for information about how corporate activity jeopardizes or contributes to long-term sustainability goals, including dependencies and impacts on the natural system. There is also growing demand for information that helps us understand the potential impact of climate change on the financial systemEnrol in this course to learn out about the basics of climate-related disclosure.