The recommendation that companies should ‘integrate’ their risk management in the face of the threat of climate change, made in the report from the Financial Stability Board Task Force on Climate-Related Financial Disclosures launched today, has been welcomed by the global coalition responsible for driving integrated reporting in the world.
Richard Howitt, Chief Executive of the International Integrated Reporting Council (IIRC), said that genuine action to combat climate change could only be achieved by extending the disclosure horizon and committed the IIRC to supporting efforts to align the Task Force recommendations with existing attempts to integrate financial and non-financial reporting by companies.
The IIRC was consulted by the Task Force on its recommendations and is convenor of the ‘Corporate Reporting Dialogue’ bringing together international corporate reporting frameworks to seek cooperation and alignment.
Richard Howitt said:
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“The IIRC believes implementation of the Task Force recommendations can be a major step towards ending the fragmented approach to the management, measurement and disclosure of climate-related financial risks. Investors need a complete picture of value creation to price in future risks and opportunities, and genuine action to combat climate change can only be achieved if it makes sense in capital markets.
“The Task Force has shown in its own ‘integrated thinking’ by rightly adopting the analysis that the financial impact of climate risk must be fully understood and integrated into the governance, strategy and decision-making in markets.
“The IIRC seeks to extend the disclosure horizon for business and commits to promoting both consultation and adoption of the TCFD recommendations and working with our partners to ensure alignment of global efforts to reform and advance corporate reporting”.