The Task Force on Climate-Related Financial Disclosures (TCFD) was created in 2015 by the Financial Stability Board (FSB) to develop consistent climate-related financial risk disclosures for use by companies, banks, and investors in providing information to stakeholders. Increasing the amount of reliable information on financial institutions’ exposure to climate-related risks and opportunities will strengthen the stability of the financial system, contribute to greater understanding of climate risks and facilitate financing the transition to a more stable and sustainable economy.
Following the publication of the final recommendations by FSB’s TCFD in June 2017, UNEP FI began a series of ‘TCFD Pilot Projects’ for banks, investors, and insurers. Participants in these pilots explored physical and transition risks (and litigation risks for insurers) and also pioneered practical approaches for evaluating these risks using climate scenario analyses. Almost 100 financial institutions (banks, investors, and insurers) from all around the world have participated in these pilots. These institutions have been supported by nearly a dozen technical partners from climate modelers to climate risk experts.
These experiences have allowed UNEP FI to take a leadership role in developing good practices regarding climate risk in the financial sector. The pilot programmes have created numerous tools, frameworks, and guides to empower both participating institutions and those throughout the financial industry to better manage and disclose their climate risks.
The prior TCFD banking pilots have yielded valuable insights about the key challenges faced by the financial sector in addressing climate risks. As the Phase III pilot programme nears completion, our vision for 2022 is to use the convening power of UNEP FI to bring together financial institutions, regulators, researchers, academics, and tool providers to address critical questions about identifying, assessing and disclosing climate risks for the financial sector. As we develop the next phase of the TCFD programme, UNEP FI will continue working with its member institutions on achieving depth, granularity and nuance to their climate risk assessment. As a global coordinating platform, UNEP FI will also further expand its regional TCFD programmes to help support capacity building for financial firms facing unique challenges in various regions around the globe. If you are interested in participating in the TCFD programme in 2022 or would like to learn more, please contact David Carlin or Maheen Arshad.
Further detail about the content and outputs of each project can be found in the menu on the right-hand side.
NEW for December 2021:
UNEP FI’s TCFD programme has launched a Good Practice Guide to Climate Stress Testing. It has been created to assist financial institutions in their climate stress testing journey and should be adapted to meet the needs of a given firm. You can access it here.
UNEP FI’s vision is to use the convening power of the UN to bring together financial institutions, regulators, climate researchers, and sector experts to address critical climate risk questions for the financial sector. With our diverse membership and our view that the climate crisis is a global crisis, we intend to work with institutions from across the world. Our prior pilot programs have demonstrated our ability to balance comparability and alignment with a recognition of the unique challenges faced within different regions. We are uniquely positioned to be a global coordinating platform that will empower institutions to better manage their climate risks and play a positive role in the low-carbon transition.
By systematically engaging global stakeholders, our TCFD programs help financial institutions add depth, granularity, and nuance to their climate risk assessments, consolidate best practices in climate risk management, and help standardize climate disclosures across the industry.
The First region-wide study on how Latin America & Caribbean banks are incorporating Climate Change into their risk management was released in August 2020.