Support companies to understand the risks and opportunities of climate change

Climate change is a global issue and the action of governments and institutions can not be enough: the private sector can play a primary role in combating climate change, concentrating the activities of reducing emissions in low-cost options and in the conscious choice of financing in line with company objectives and mission. A new model of climate risk management is finally emerging in the private sector.

Business benefits go far beyond reducing emissions, and companies that are able to assess and understand climate-related risks and opportunities will be able to make better long-term decisions and become a business opportunity.

More than a year has passed since the approval, in June 2017, of the recommendations published by the "Task Force on Climate-related Financial Disclosures", for the voluntary diffusion of relevant climate-related communications, to be carried out in the framework of official financial communications.

The recommendations have the main objective of leading the private sector to communicate in a clear, comparable and consistent way the information that investors, lenders and insurance companies need to properly assess the risks and opportunities related to the climate.

Michael R. Bloomberg, President of the Task Force, stated that the recommendations "represent an important commitment of the private sector to improve transparency on risks and financial opportunities related to the climate", underlining how "climate change is not just an environmental problem but also corporate, and it is necessary that the leaders of the companies adhere to the TFCD in the diffusion of these recommendations in their industrial sectors in order to make the markets more efficient and more stable, elastic and sustainable the economies ".

Task Force on Climate-related Financial Disclosures: concretely defining its climate change mitigation strategy

The Task Force's recommendations are the result of a first global attempt to establish a new model of Corporate Governance, just as stated by Larry Fink, CEO of Black Rock, who renewed the invitation to companies to make public their corporate strategic framework , for the creation of value over the long term; confirming that the company needs the action of the private sector to find an answer to the great global challenges.

Companies have a duty to demonstrate to the company their active contribution, and it is important to underline that the management of environmental issues can no longer be the sole responsibility of the sustainability teams, it must become a priority sector for the entire company management.

The focus of the Task Force is dedicated, in particular, to communications on the financial impacts of climate change on society rather than on the impact of a society on climate change. The main and most important feature concerns the adaptability to any type of organization operating in any sector and jurisdiction, allowing a consistent increase on the potential attention of risks and opportunities related to climate change and the transition to a low-carbon economy. carbon.

The TCFD is in line with the mission of the most important reporting system on greenhouse gas emissions in the private sector: the Carbon Disclosure Project. More than 6,000 companies have been called by CDP to communicate their strategies for measuring emissions and managing risks and opportunities associated with the effects of climate change.

Therefore, the new CDP questionnaires are aligned with the TCFD recommendations, providing companies and investors with comparable information to guide strategic decision-making.

Although the financial risks associated with climate change have been widely recognized, there has been little change in the information provided in the company reports. But the number of institutions that support the TCFD recommendations is drastically increasing and is working to implement them.

Towards a sustainable economy

At the end of 2017, over 240 companies, with a combined market capitalization of over $ 6.3 trillion, publicly expressed their support for the TCFD recommendations. In addition, Climate Action 100+, the initiative led by over 289 investors from 29 countries, with a total of over 30 trillion dollars under management, involved the largest emitters of greenhouse gases and other companies that have significant opportunities to lead the transition to a low-carbon economy and to achieve the objectives of the Paris agreement.

But what could really push companies to move even faster on the voluntary diffusion of relevant climate-related communications? Surely a positive fact and from which to start is that more and more investors are taking a strong public position in favour of greater disclosure.

In line with this and with the ambition to achieve an economy as sustainable as possible, in Italy too an important step has been taken to achieve the goals of sustainable development, thanks to the Memorandum of Understanding signed between the organization itself. international Carbon Disclosure Project and the Italian Ministry of the Environment.

This partnership also has the main objective of establishing sustainable and low-carbon economic growth in our country, and in line with the Paris Agreement, thanks to the increase in the number of Italian companies that actively monitor and manage their risks to the climate and their impact, involving 100 of the largest Italian companies in the compilation of the CDP questionnaires.

As the only CDP accredited partner in Italy, Carbonsink helps companies in assessing and quantifying the company's climate risk at both strategic and operational levels. Supporting the organization in the collection of data and in the calculation related to the emissions produced water within the various activities.

The private sector can play a predominant role in achieving Carbon Neutrality by contributing to raising the level of awareness on global climate change.

Support companies to understand the risks and opportunities of climate change