TCFD and BoE Conference on Climate Scenarios, Financial Risk and Strategic Planning

The Task Force on Climate-related Financial Disclosures (TCFD) held a two-day conference in collaboration with the Bank of England (BoE) discussing scenario analysis and how it can help companies assess climate risks in their strategic planning and risk management processes.

Day 1 provided a high-level overview of the TCFD recommendations with regard to the use of scenario analysis; what scenario analysis is and why it is useful for assessing climate-related risks; how climate-related scenario analysis works in practice today – who is using it; experiences; and available tools. Day 1 is was hosted by the FSB TCFD and was open to press.

Day 2 brought together business practitioners, leading researchers from academia, and finance professionals to discuss in more detail how climate-related scenarios can be used for strategic and financial risk analysis and how scenarios could be improved. The goal was to highlight successful approaches, and identify further work and collaboration needed in this area. Day 2 was hosted by the Bank of England and was held under Chatham House rules.

Stakeholder presentations, videos and photo gallery plus introductions can be found here.

World’s biggest sovereign wealth fund proposes ditching oil and gas holdings | The Guardian

The Norwegian central bank, which runs the country’s sovereign wealth fund – the world’s biggest – has told its government it should dump its shares in oil and gas companies, in a move that could have significant consequences for the sector.

Norges Bank, which manages Norway’s $1tn fund, said ministers should take the step to avoid the fund’s value being hit by a permanent fall in the oil price.

The fund was built on the back of Norway’s hydrocarbon wealth, and around 300bn krone (£27.73bn), or 6%, is invested in oil and gas companies.

 More

UK Government releases £2.5bn climate change plan | Independent

<

UK Ministers launch group to help boost green business investment | The Guardian

A new group led by investors and leading figures from the City of London has been brought together by the government to draw up measures to encourage “green finance” in the UK.

The Green Finance Taskforce will have six months to come up with proposals on how to increase investment in the low-carbon economy and will work with banks and other financial institutions. Chaired by Sir Roger Gifford, former lord mayor of London, the taskforce will look at measures to make the UK’s planned investments in infrastructure, for instance on energy and transport, more environmentally sustainable.

Why UBS Is Bringing Its Climate-Proofing Strategy to Proxy Voting | Bloomberg

$200 billion clean energy financing commitment | JP Morgan Chase

Download the fact sheet here

Market Inflection Points | Governance Direction

Rapid changes in market dynamics have a material impact on the success of businesses. International agreements to limit global warming will restrict the amount of fossil fuels that can be burned in the future. This may create difficulties for the fossil fuel industry, including ‘stranding’ assets.

Author: Ben Scheltus, CEO, Climate Alliance Limited

Re-printed with the kind permission of the Governance Institute Australia

Breaking the tragedy of the horizon - climate change and financial stability | speech by Mark Carney

California state pension funds to divest from coal | Climate Home

Half of CEOs are investing in low carbon – poll | Climate Home

The cost of inaction: Recognising the value at risk from climate change | The Economist

The asset management industry—and thus the wider community of investors of all sizes— is facing the prospect of significant losses from the effects of climate change. Assets can be directly damaged by floods, droughts and severe storms, but portfolios can also be harmed indirectly, through weaker growth and lower asset returns. Climate change is a long-term, probably irreversible problem beset by substantial uncertainty. Crucially, however, climate change is a problem of extreme risk: this means that the average losses to be expected are not the only source of concern; on the contrary, the outliers, the particularly extreme scenarios, may matter most of all. The findings in this report indicate that climate change is likely to represent an obstacle for many asset owners and managers to fulfil their fiduciary duties.

Author: The Economist Intelligence Unit

Mark Carney set for new 'stranded assets' intervention | Climate Home

$283B of liquefied natural gas ‘uneconomic’ to 2025 | Carbon Tracker