GRI Study shows 40% increase in Canadian financial firms’ disclosure aligned with TCFD climate risk recommendations
18 November 2020
Includes a proposed path forward for policymakers, firms and investors
TORONTO, Nov. 18, 2020 /CNW/ - A study by the Global Risk Institute in Financial Services (GRI) shows there has been a 40 per cent increase since 2017 in the number of financial firms publicly disclosing in alignment with the Task Force on Climate-related Financial Disclosures (TCFD) Recommendations for a total of 25, including major Canadian banks and pension funds.
The study examined trends in climate-related financial disclosure among 58 financial firms including banks, pension funds, insurance companies, Crown corporations and credit unions. Introduced in 2017 by the Financial Stability Board, the TCFD Recommendations provide a framework for companies to disclose their material climate-related governance, strategy, risk management, metrics and targets.
The GRI study looked at three reporting cycles (2017, 2018, 2019) and found of those financial firms disclosing, 44 per cent included the TCFD Recommendation-aligned information in financial reports.
"Climate change related risk is both a competitive issue and a regulatory issue – the landscape is changing dramatically and the Canadian financial sector must be ready," said Sonia Baxendale, President and CEO, GRI. "As the world shifts to a low carbon economy, there will be increasing expectations, and we need to ensure that Canada's natural resource-based economy is an asset and not a liability."
According to Ms. Baxendale, Canada has long been a great place to invest and has all the right ingredients to be competitive in a low carbon future. She added that the country has ample natural endowments that can be harnessed for clean energy and carbon capture, highly skilled professionals in the primary sector, and a sophisticated financial system to help make this a reality. "The Canadian financial sector must proactively support businesses and households in this transition," she said.
"Eighty per cent of the disclosing firms reported that they are assessing risk over the short, medium and long terms, and 70 per cent disclosed specific risks they were facing in each of these time horizons," said Alyson Slater, Senior Director of Sustainable Finance, GRI, and one of the authors of the report. "Every disclosing firm indicated that their Board of Directors oversees climate risk and the Chief Risk Officer is most commonly cited as the executive responsible for managing climate change risk."
The report outlines steps that can be taken by policymakers, firms and investors to increase the quality and quantity of reporting and to accelerate the road to adoption.
"Facing climate change head on and taking action now is the right thing for future generations," said Ms. Baxendale
A full copy of the study can be found at: https://globalriskinstitute.org/publications/climate-related-financial-disclosure-in-the-canadian-financial-sector-3/
About GRI: The Global Risk Institute in Financial Services (GRI) is a pre-eminent source of ideas on risk management for the financial industry. GRI brings together leaders from industry, academia and government to identify actionable insights on emerging risks and trends globally. Our mandate is to provide high-quality research, deliver engagement activities that support dialogue, and offer a range of training programs across multiple financial risk management topics.
For further information: Media contacts: David Moorcroft, Public Affairs Advisor, Global Risk Institute in Financial Services, Email: email@example.com, Tel: +1-416-727-1858; Mary Lou Frazer, Communications & Marketing Director, Global Risk Institute in Financial Services, Email: firstname.lastname@example.org, Tel: +1-416-306-1148