Abstract
It is clear that climate change poses both risks and opportunities for business. Investors have therefore been increasingly paying attention to ESG as a proxy to assess potential risks in their financial investments. However, participants in the financial markets have not yet reached the point where they receive enough reliable financial disclosures from entities in their investment portfolios on the possible impact of climate-related risks and opportunities. These outstanding concerns have led to the establishment of the Taskforce on Climate-related Financial Disclosures (TCFD), which sets a global standard for disclosing climate-related financial information. The TCFD framework is expected to play an important role in internalizing a company’s climate-related financial disclosures, which should help build a more holistic risk valuation and contribution to financial stability.
This study examines the methodology and framework for climate-related financial disclosures, recommended by the TCFD and the degree to which climate-related financial disclosures are published by globally important banks. It also identifies the current outstanding issues and explores possible ways forward to accelerate the implementation of climate-related financial disclosures.
