During a Roundtable, organized by the Sustainable Finance Lab and Deloitte on September 27, the recently published recommendations of the Financial Stability Board on climate related financial disclosures were discussed among financial institutions, energy-intensive companies and regulators.
The Roundtable started with a brief introduction on the disclosures which are applicable for corporates and financial institutions and aim for decision-useful information about climate-related risks and opportunities. The Roundtable focused on a key subject in the new disclosure framework: the use of scenario analysis for assessing climate-related risks and opportunities. The participants expressed the need for reference scenarios on energy transitions and climate change followed by a discussion about eligible organizations like financial institutions, regulators or IPPC, to develop these reference scenarios.
The contribution of energy-intensive companies in the Mainport Rotterdam highlighted current initiatives and business opportunities towards a low carbon economy, as well as transition barriers. This resulted in a discussion about the risk appetite and pay back periods for both energy-intensive companies and financial institutions, as well as the need to account for externalities (emissions and natural capital). The urgency of financial institutions and asset owners to mitigate downside climate risks and the resulting need for forward looking information, was clearly sensible at the Roundtable.
A brief overview of current methods for finance professionals to assess and mitigate climate change risks and opportunities, was followed by a call for further sophistication of climate related financial disclosures.
This call fits very well within the mission of the Sustainable Finance Lab and we look forward to a follow up on this Roundtable to accelerate the transition to a low carbon economy by bridging theory and practice.
For further information, please contact Udeke Huiskamp (firstname.lastname@example.org).