BlackRock's CEO, Larry Fink, spelled out in a letter to executives what the financial industry has known for a while: that climate risk will be an integral part of investor conversations from now on. It's clear momentum has built around the recommendations of the Task Force on Climate-related Financial Disclosures (TCFDs) in the years since they were first unveiled. But, despite the growing number of initiatives designed to support this process and the urgent calls from Blackrock and others to accelerate implementation, organisations are still struggling to identify, understand, and disclose the climate-related risks and opportunities facing their operations and supply chains.
Key sticking points remain around stress-testing business operations and strategies against future scenarios as well as integrating climate into management strategies. The latest TCFD progress report shows some small improvement in both areas, but the pace is still far too slow given investor demands and the number of countries seeking to make TCFD-aligned disclosures mandatory.
Whether starting your TCFD journey, refining your analysis, or improving your disclosures, taking action today will help satisfy investors and stay ahead of regulatory changes, while identifying potential new business opportunities opening up.