COP26, TCFD & UK ESG LEGISLATION
COP26, held between 31 October to 12 November aims to address critical goals set out in the 2015 Paris Agreement related to global warming and climate change, with countries uniting to outline their plans related to the net-zero by 2050 goal.
Companies for the most part remain outside of the formal UN climate discussions nevertheless their activities have a major impact on the road to reaching the climate targets. Consequently sustainability related legislation is a powerful tool in driving the greening of our planet and reducing the dangerous rates of global warming.
Whilst the majority of sustainability reporting is not currently obligatory, the UK is looking to develop a regulatory landscape suitable for the UK market and define commitments that establish the UK’s financial system as the greenest in the world.
On the back of this, the UK announced their commitment towards mandatory climate-related disclosures in line with the Taskforce on Climate-related Financial Disclosures (TCFD) recommendations, becoming the first G20 country to do so. These regulations are set to become mandatory in April 2022.
What is TCDF?
Taskforce on Climate-Related Financial Disclosures (TCFD) is an industry-led group which aims to increase the consistency of companies’ climate-related disclosures and thus creating a transparent comparison for all stakeholders.
Consequently enhancing investor transparency and leading to better understanding of risks and opportunities. Initially launched at the Paris COP21 in 2015 by the Financial Stability Board (FSB) and Mark Carney, the UN Special Envoy on Climate Action and Finance and UK Finance Adviser for COP26.
What does it entail?
The core elements of the 11 TCFD disclosures fall within the following categories:
GOVERNANCE
The board’s oversight of climate-related risks and opportunities
STRATEGY
The actual and potential impacts of climate-related risks and opportunities
RISK MANAGEMENT
The processes used by the organisation to identify, assess and manage climate-related risks
METRICS AND TARGETS
Metrics and targets used to assess and manage relevant climate-related risks and opportunities
Who does TCFD include?
Over 1,300 of the UK’s companies and financial institutions will be covered by the incoming legislation. Amongst those affected are many of the UK’s largest traded companies, banks, and insurers, as well as private companies with more than 500 employees and £500m turnover.
In order for companies to thrive through changing legislation, they need to be forward thinking and in control of their sustainability-related information. This data is often complex and widely distributed, placing a strain on a company’s time and resources.
At APlanet, our mission is to bring sustainability to the forefront of businesses by integrating the ESG criteria into their strategy. By harnessing technology, we help to revolutionise sustainability management. With APlanet Sustainability you will be able to visualise all of your information, to report on your social and environmental impact aligned with global standards and reduce the administrative burden associated with the elaboration of reports.
If you are involved in sustainable development and you would like to learn more about our platform, its functionalities, advantages and how we can help with the management of non-financial information, request your demo with our team.
