Half of banks failing on TCFD

An analysis of the implementation of the reporting framework outlined by the voluntary Task Force on Climate-related Financial Disclosures (TCFD) in the banking sector reveals that of the 76 banks that endorse the TCFD framework only 39 started disclosing.

Whilst Europe is leading TCFD framework implementation, the US and Asia-Pacific are significantly lagging behind, and momentum is significantly slowing with only nine new banks signing up in 2019 compared to 38 banks in 2017.

The analysis, contained in a report from BCS Consulting, highlights inequality in areas of reporting, with disclosure of banks’ own environmental operational footprint becoming standardised, whereas carbon impact of services banks provide is the least mature area.

Commenting on the report, Hector Fontaine, BCS Consulting Sustainable Finance Lead said: “The results highlight the importance of government action to drive enhanced climate-related financial disclosures in the sector; the countries with the most advanced disclosures and the countries with the highest TCFD engagement, tend to be those where there is clear evidence of an active national climate agenda.”

The report concludes that by carrying out detailed reviews of their current business processes, defining measurable and reliable metrics and targets, and by enforcing a culture of responsibility, banks can play an important role in driving the transition to a lower-carbon economy. However, institutions need to act sooner rather than later to facilitate the transformation.

The Task Force on Climate-related Financial Disclosures (TCFD) was established by the Financial Stability Board (FSB) following a request from the G20 for the FSB to consider the financial stability risks associated with climate change.

Full report here.

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