Financial Disclosure Regarding Climate-Related Risks and Opportunities
On July 19, on behalf of the Task Force on Climate-related Financial Disclosures (TCFD) Oil and Gas Preparer Forum, the World Business Council for Sustainable Development released a report called “Climate-related Financial Disclosure by Oil and Gas Companies: Implementing the TCFD Recommendations. ”The report reviews the way the TCFD recommendations are implemented at four leading energy industry companies: Total, ENI, Equinor and Shell.
There is increasing pressure from investors to see that climate issues are taken into account in a company’s strategy. Total, which believes it is pivotal to integrate these issues into its strategy and be transparent in this area, voluntarily published its first Climate Report in 2016.
The TCFD recommendations regarding climate-related financial disclosures cover four areas: governance, strategy, risk management, and metrics and targets. These disclosures are intended to provide investors with consistent, comparable data that is easier to obtain. For example, the TCFD recommends that businesses describe the board’s oversight of climate-related risks and opportunities and the impact of those risks and opportunities on the organization’s strategy in the short, medium and long term.
The recommendations were published in 2017 by the TCFD, which was set up by the G20 Financial Stability Board in 2015. Total provided its support and took part in the TCFD’s discussions on the best ways to implement the recommendations. The Group also included a table in its Registration Document 2017 (page 192) that enables readers to quickly identify the sources of information corresponding to the different recommendations