Major corporations have just 2 years to devise plans on how they will document and report the impact of climate risks on their businesses or face enforcement by global regulators. The governor of the Bank of England spoke about this move at a conference in Tokyo hosted by the Taskforce on Climate-related Financial Disclosures (TCFD). While many banks and energy companies have made progress, reporting is still largely inconsistent across sectors. Over the next two years, the goal is to “develop a series of rules governing how companies report the effect of warming temperatures on their businesses alongside data showing the contribution of their activities to the problem,” according to the Guardian. One of the main drivers behind this development is investor appetite to support companies that understand the risks. As developing or redeveloping climate-friendly infrastructure will be costly, investors want to know which companies to support and which to avoid when buying shares. Through this process, many companies have discovered that their current activities will contribute to breaching the Paris Climate Agreement in their respective countries. Another factor driving this move is new research showing companies that understood their climate risks were more likely to grow at a faster rate.
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