SHARE is collaborating on an investor initiative with over 100 investors pushing for banks to back the recent recommendations of the Taskforce on Climate Related Financial Disclosures (TCFD).
The TCFD recommendations compel banks to disclose more information on their climate change strategies. The initiative is being coordinated by Boston Common Asset Management and ShareAction in the UK with support from SHARE in Canada.
The investor group wrote to the CEOs of sixty of the world’s largest banks, including six Canadian banks calling for enhanced disclosure of banks’ climate-related risks and opportunities and of how these are being managed by banks’ boards and senior executives. Specifically, the investor group is looking for more robust disclosure in four key areas: climate-relevant strategy and implementation, climate-related risk assessments and management, low-carbon banking products and services, and banks’ public policy engagements and collaboration with other actors on climate change.
The information requested in the letter builds on the framework that SHARE laid out in its report Banking on 2-Degrees: The Hidden Risks of Climate Change for Canadian Banks and on SHARE’s recommendations to Canadian Securities Administrators for enhanced climate-related disclosure regulations.
A recent study estimates that the value at risk under business-as-usual scenarios may be equivalent to a permanent reduction of between 5% and 20% in portfolio value in just over a decade. Bank’s financing activities span all sectors of the economy, making them particularly vulnerable to climate change related risks. Moreover, as providers of capital, banks will have a key role to play in the Paris Agreement’s goal of “making finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development”
SHARE will continue engaging with Canada’s banks as part of our long-standing engagement with the sector on how they are managing and disclosing climate-related risks and opportunities.