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Carney says TCFD will go on into 2019 and launch resource hub and best practice guidance

Speech to Network for Greening the Financial System central banks and regulators group.

Mark Carney, the Governor of the Bank of England and Chair of the Financial Stability Board that oversees risks in the financial system, has told a major gathering of central bankers and supervisors in Amsterdam today that the work of the Task Force on Climate Related Financial Disclosure (TCFD), will continue beyond the Argentine G20 Summit in late 2018 and into the Japanese G20 presidency in 2019, backed by two new initiatives to measure progress on company and investor support.
Carney launched the TCFD, chaired by Michael Bloomberg, at the end of 2015 under the auspices of the Financial Stability Board. Its final report was delivered In June last year and outlined a voluntary framework for companies to disclose climate-related information in their financial filings. It recommended that investors gauge the long-term financial relevance of that information based on scenario analysis against climate science and global warming levels. The TCFD says 252 companies with a market cap of over $6.6 trillion and 37 other organizations have publicly expressed support for the initiative so far, including four governments and 23 financial regulators. The 252 companies include more than 160 financial firms responsible for assets of over $86.2 trillion. Latest joining supporters in March included pan-European stock exchange Euronext, the Financial Services and Markets Authority (FSMA) in Belgium, the National Bank of Belgium (NBB) and the Belgian Minister of Finance.
Carney was speaking at a conference of Central Banks and Supervisors that have formed the Network for Greening the Financial System, a group from eight countries that together account for over a third of both global financial assets and carbon emissions. Carney said investors were upping the anté on climate disclosure by companies. He pointed out that 2017 was a record year for climate-related shareholder resolutions, with a threefold increase in motions (184 vs 63) and with investment managers controlling over 45% of global assets under management backing shareholder actions on carbon disclosure.But he said the TCFD was pushing two initiatives to support this. First, in time for the Argentine G20 Summit in November this year, he said the TCFD would draw on work by the Big Four accounting firms to report on TCFD implementation experience, focusing on examples of good practice to foster wider adoption of the its Recommendations. Second, he said the Task Force would launch a Resource Hub to provide technical support, data, and collaborative partnerships – all aimed at helping companies implement the recommendations in as effective and efficient a manner as possible.
Carney said: “As preparers, financials and investors ‘learn by doing’, a virtuous cycle will be created where more and better information creates the imperatives for others to adopt the TCFD and for everyone to up their game on the quality of information they provide.
He added: “In particular, it will be important to get feedback from investors on which disclosures are truly decision useful so that this process is as efficient and effective as possible.”
In his speech, Carney said governments were taking some of the necessary policy actions for avoiding dangerous climate change, including a tightening of the EU Emissions Trading Scheme (ETS), which is due to come into effect from 2021, and which he said had driven carbon prices above €10 per tonne for the first time in six years. But he noted that government targets for economic action would need to tighten further to meet commitments to the Paris COP21 Agreement: “Even so, the national determined contributions towards meeting the Paris goals, summed to more than 2.7°C, making it clear climate policy will need to tighten further if the Paris commitments are to be achieved.