Established by the Financial Stability Task Board in December 2015, the Taskforce on Climate-related Financial Disclosure (TCFD) was created for the purpose of developing a framework to help companies and financial institutions consistently measure and communicate their climate-related exposure as well as the impact on climate change.
Alder shared that the SFC’s first priority was to join the U.K., E.U. and New Zealand by mandating climate reporting to align with all of TCFD’s recommendations, no later than 2025.
«[I]t should go without saying that the climate crisis is a global issue which demands a global solution,» he said, adding the SFC was now consulting proposed changes to require fund managers to factor climate risk into investment processes and mandate disclosure to end-investors.
Strategic Moves
Alder elaborated on some of the SFC's ongoing initiatives including disclosure on both financial and environmental impact of investment portfolios; use TCFD requirements as a base for new global accounting standards; promote use of scenario-based analysis for large fund managers; and adopt universal taxonomy for sustainable finance.
«Taxonomies are vital to the green finance effort. They provide a universal, common catalog to enable capital to be allocated to the right places to support the transition to a greener economy,» he said.
«[I]f reporting and disclosure standards are to be effective, they have to be universally recognized and applied across the board. it needs to be more of a science and less of an art.»
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