Climate change is a key point on the global political agenda in 2021 and politicians, regulators and financial market actors have started to discuss how to address the issue with the means of the market and how to best help companies to become more climate resilient. As global financial markets take steps towards better integrating climate risk and opportunities into pricing mechanisms, disclosure provides the bedrock for progress in the pursuit of a more sustainable global economy.
There is a growing demand for decision-useful, climate-related financial information in annual reports and financial filings which has led to an increased need for issuers to update their knowledge on climate-related risks and reporting frameworks. Following this same trend, there are rapid advances associated with regulation and policy frameworks aiming to support climate resiliency in markets. A number of leading economists and experts see climate change as representing the greatest commercial opportunities of our time. Those companies and countries most effectively navigating the transition to net zero and identifying the opportunities in providing solutions will not only be more resilient but will also achieve more sustainable growth.
Stock exchanges are uniquely positioned to advance climate disclosure through market guidance. They can support consistency and standardization of information that enables both local and global progress in climate reporting and use of climate-related data. Stock exchanges’ infrastructure, networks and experience can contribute to addressing climate change via capital markets. Working with and learning from their peers, can play an essential role in achieving climate-resiliency of our markets.
A newly published UN Sustainable Stock Exchanges model guidance on the Task Force on Climate Related Financial Disclosures (TCFD) adoption, assisting exchanges’ markets to implement the TCFD recommendations, as well as a new action plan, showing how exchanges can lead by example to make markets more climate resilient, are going to be the foundation for the session’s discussion.
Issues to be addressed
- Why is climate disclosure important?
- How can exchanges assist in implementing TCFD disclosure among their issuers.
- How to integrate climate disclosure guidance in the wider context of exchanges’ environmental, social, and corporate governance guidance.
- What can exchanges do to lead by example?
- How do markets connect climate disclosure to investment?