Companies are being asked to disclose climate-related financial risk in their regular market reports by a G20 task force aimed at tackling global warming.
The Task Force on Climate-Related Financial Disclosures (TCFD) recommended this week that companies disclose how they identify, assess and manage climate risks and opportunities and how risks in the short, medium and long term impact their business and financial planning. The measures are voluntary, but some of the TCFD's 32 member companies are calling for them to become mandatory.
Companies should also describe the potential impact of global temperature rises being limited to 2 degrees Celsius on their business, and how greenhouse gas emission cuts will impact their bottom line.
There are fears by some market participants that some assets are being mispriced due to their vulnerability to climate change, which could threaten financial market stability.
The TCFD wants all financial and non-financial organisations with public debt or equity such as asset managers, insurance companies, endowments and foundations to implement its recommendations.
