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TCFD
The Task Force for Climate-related Financial Disclosures (TCFD) was launched in 2017.
It recommends the disclosure of new decision-useful, forward-looking information on climate risks and opportunities.
It's tricky... how do you put a dollar impact to a temperature change?
Here's how we can help...
INVESTMENT AND ESG
ESG is becoming mainstream, particularly in the investment world.
Asset owners want to define and stand for specific ESG features; investment managers have to engage and report on these mandates; investees must activate these requests and communicate on progress and impact.
It's tricky... how to determine what to stand for? what's the best way to engage and align around ESG?
Climate risk/TCFD
The Task Force on Climate-related Financial Disclosures (TCFD) released its recommendations in 2017.
It recommends the integration of actual and potential impacts of climate change into existing risk management processes and the disclosure of often new, decision-useful, forward-looking information on climate risks and opportunities.
For most organisations, the adoption of the TCFD recommendations is voluntary, however more and more codes, frameworks, and instruments are aligning to the TCFD approach and recommended disclosures.
It’s tricky… how can you harness your governance structure to embrace climate? How best to determine climate risks and opportunities, now and in the future? How do you value the price of climate risk to your own business?
Investment
The value of global assets applying environmental, social and governance data to drive investment decisions has more than tripled over eight years, to
US$40.5t
Source: Pensions&Investment
Photo credit: Burak @weekendr
INVESTMENT AND ESG
Whether through embracing fiduciary duties, corporate conscience, desire for pension contributions to make multiple returns, more and more funds are being allocated with a more deliberate consideration of ESG factors.
There's more understanding and provenance to show that aligning cash to ESG doesn't come with a performance penalty and it often comes with a value-creating upside.
This is having repercussions throughout the investment ecosystem, from beneficiaries, and asset owners, to investment managers, investees and their advisors.
At Red Links we have talent that straddles the ESG and investment worlds, and can help make sense of ESG from an investor's lens.
In association with:
For insights from the Red Links Sustainability Consortium on this area, click into the following short reads:
How we can help
For Investees
Fund-raising – devising and presenting authentic ESG messaging for roadshows and more, to attract and secure investors with the best fit
Knowing your current and potential investors, including responding and anticipating investor queries; tracking investors’ ESG focus areas
Preparing investor relations function for ongoing engagement with investors
Reporting ESG performance to investors, including ESG investor communications reviews and recommendations, peer reviews, disclosure regulations and trends updates
Additional reporting, submissions to third parties and disclosures per separate frameworks such as CDP (formerly Carbon Disclosure Project)
For Investors
Defining what you stand for ESG-wise and articulating your ESG investment policy
Knowing and tracking your current and prospective asset owners ESG topics of priority
Integrating and aligning ESG investment policy throughout activities and processes, including training on ESG and support for engaging with investees
Monitoring, measuring and reporting progress and impact around the ESG topics that matter to asset owners
Preparing for exit – interpreting target buyers ESG priorities; planning ahead over life of ownership to meet those needs; communicating ESG
Where necessary, services will involve the use of Leaders Arena's proprietary tools, including:
ESG Investor Scorecard™ - tracks investor disclosure, ESG focus, proxy voting and research on some 10,000 institutional investors.
ESG Advanced Analytics™ - helps determine which broad ESG areas and concrete topics investors use to assess investees from an ESG perspective.
TCFD
Value at risk as a result of climate change to manageable assets by 2100,
up to
US$43t
Climate risk/TCFD
The significance of climate-related financial risks and opportunities to business and strategies is becoming better understood.
More organisations – including regulators and governments – are beginning to evaluate the impact of different scenarios of climate-change to business and financial projections.
Official “Supporters” of TCFD – the Task Force on Climate-related Financial Disclosures – are growing in number, other organisations are aligning their approach and thinking to this framework, plus other frameworks are sign-posting users to TCFD.
Asset owners and investment managers are also increasingly expecting and requesting this analysis and disclosure.
Whichever way you look at it, understanding the inextricable connections of climate to business, and business to climate, is sure to deepen, so that TCFD-logic is very likely here to stay.
At Red Links, we have professionals who can help from governance to scenario modelling. A holistic TCFD solution.
For insights from the Red Links Sustainability Consortium on this area, click into the following short reads:
How we can help
Climate risk review
We can assess the current tracking and assimilation of climate risks and opportunities in an organisation. We can provide an indication of what’s right-sized, what requires attention and what steps will make progress in the priority areas.
This could include: a climate governance review; assessment of how climate risks are integrated with other risk management processes; approaches for tracking sectoral/geographical climate trends and determining what is material climate-wise.
Briefing the board
TCFD presents an emerging and far-reaching concept to organisations. The need to address TCFD recommendations often arrives through the request of others, rather than through an organisation’s own volition. It’s yet another strategic demand on top of many ESG and other fiduciary requirements of boards.
We can help boards understand how climate risks and opportunities show up for the organisation, and how to incorporate TCFD in the right way, alongside other risk and ESG considerations.
This could include: developing tailored briefings for boards specific to their organisation’s interests; devising and administering questionnaires of board members; sharing TCFD good practice in relevant sectors and peer companies.
OTHER SUSTAINABILITY SERVICES
Sustainability topics are vast and cover an array of issues - to effectively manage them requires a range of knowledge and understanding.
Many organisations, including at Board level, will already be addressing at least some sustainability issues, but are they addressing the topics that matter the most? Do they have a cohesive approach? Is sustainability embedded in the business? Are impacts tracked and reported to best effect?
Where to start?
Well that's exactly one of the many questions that the Red Links team can help you address.
For insights from the Red Links Sustainability Consortium on this area, click into the following short reads:
How we can help
We help in three broad areas, by answering the likes of the following questions:
Clarifying ESG
What should we stand for?
What do we do now?
What are our ESG risks and opportunities?
What’s our ambition, resources, commitment?
What do our peers do?
What do our investors and other external stakeholders expect?
How do we compare?
What’s looming?
What should we aim to achieve? By when?
Activating ESG
Who governs ESG?
Do we have the right policies and processes?
Is management focussed and accountable?
Is ESG embedded in the business and strategy?
Are we tracking results and impact?
Do our people know enough about ESG?
Communicating ESG
Who do we need to engage with?
What do they need to know?
How do we want them to respond?
Are messages balanced/authentic/clear/ consistent/timely?
Are we using appropriate channels?
Should we make more disclosures?
Other
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