Climate-related financial disclosure is a hot topic at the moment. Since the Task Force on Climate-Related Financial Disclosures (TCFD) was formed in 2015, a growing number of businesses, investors and solution providers have been working to better understand, and inform one another, of the risk climate change poses.

And in light of the pandemic, and its global economic ramifications, interest in climate-related financial disclosure has accelerated further. 

But, for many organisations, how climate risk data and finance intersect remains unclear. And this lack of clarity is understandable; if there’s one thing our global climate and global financial systems have in common, it’s their complexity! 

To help you get up to speed with what it’s all about, here we outline four key things you need to know, as well as pointers to useful resources for those ready to take a deeper-dive into the important world of climate-related financial disclosure.

  • The TCFD pathways are the place to start 

When it comes to disclosure on climate, the TCFD is the leading authority. Chaired by Michael Bloomberg, the TCFD first began issuing recommendations on climate disclosure in 2017, with the aim to help companies share more transparent information relating to climate that can inform markets and investors. 

Today, the TCFD has a whole range of online resources providing a comprehensive route for businesses ready to get to grips with climate-related financial disclosure. These include its own set of recommendations and an e-learning knowledge hub with over 300 different courses, insights, tools and more designed for companies, investors and finance professionals. 

While the TCFD’s best practices are voluntary, as regulators start to enforce disclosure, their established frameworks are likely to play a significant role in informing eventual standards, metrics, and legislation. Familiarisation and preparation with them now is highly recommended to prepare for integration into risk management, operations, reporting, and governance. 

  • The impetus to provide climate-related financial disclosure will only grow

Climate-related financial disclosure isn’t mandatory today, but all signs point toward that changing in the near future. The UK’s Green Finance Strategy last year outlined plans to have all listed companies and large asset owners provide climate-related financial disclosures. Meanwhile, national banks across the G7 are discussing how to make disclosure mandatory (the Bank of England notably disclosed theirs, voluntarily, for the first time this June, demonstrating commitment) and the TCFD announced earlier this year that it had more than 1,000 supporting organisations

Across the globe, businesses need to start treating climate-related financial disclosure as a matter of when, not if. And, this offers an opportunity to business—climate-related financial disclosure isn’t a tick-box exercise or more red-tape to wade through. It’s an essential part of future-proofing and adding value to a business. 

The fact is, environmental factors go hand in hand with good business, rather than presenting an unnecessary burden. The green finance sector is flourishing with estimates suggesting last year it was worth £23.8trn. Meanwhile, huge portfolios like BlackRock are divesting from fossil fuels and moving funds to more sustainable investments

It’s increasingly clear that investors and regulators know the future is green, and will be looking to businesses to prove their credentials. However any discussion on investment in 2020 can’t ignore the impact of the pandemic. 

  • COVID-19 means investors will be scrutinising risk more than ever

After a crisis, investors seek security. And the pandemic will have left many funders reeling.  

The fact that green funds are growing doesn’t mean investors won’t scrutinise their options. The global pandemic has shown the fragility of our globalised system of trade and supply chains, as well as the crucial importance of transparent access to shared knowledge. 

Investors will be taking heed, because without the right action to build climate security, the disruptive force of the climate crisis could dwarf the pandemic. For organisations that wish to secure funding in a post-COVID world, demonstrating a thought-out approach to disclosing climate risk has to be top of mind. 

Beyond the TCFD recommendations, businesses seeking granular, actionable insights into their climate risk that can better enable their ability to share climate-related financial disclosure, should explore how new technology can reveal exactly how their value chain could be impacted. 

  • Technology can demystify climate risk and enhance disclosures 

Thinking about climate risk can often feel abstract and overwhelming to businesses, particularly those that haven’t yet experienced the direct impact from a physical climate risk through, for example, flood or fire damage. 

Technology can play a powerful role in demystifying the factors impacting climate security, forecasting extreme events, and can provide businesses with actionable insights to build into future strategies, as well as inform climate-related risk disclosures. 

Cervest’s solution does this by combining recent advances in artificial intelligence and Earth science to make sense of the vast, interconnected and always-changing climate systems that impact organisations and their value chain. By drawing on global climate data and analysing it, Cervest can present businesses with clear insights into their specific climate risks. This will enable you to predict and manage the short and long term effects of the changing climate. 

Overall, while grasping the fundamentals of climate-related financial disclosure can seem intimidating, there’s never been a better time for businesses to embrace them. 

To learn more about how Cervest can help your business build its climate security, understand its climate risk and inform climate-related financial disclosures, please get in touch with the team at sachin@cervest.earth.

Ernesta Baniulyte

Ernesta Baniulyte 
Product Designer

Ernesta has been a full-stack product designer for more than five years. She has valuable experience in the B2B, B2C and B2B2C worlds, and while working at both agencies and product/service companies, she has learned to develop UX research infrastructures to support strategy.

At Cervest, Ernesta contributes to all stages of the product development process – from initial ideation to the exacting detail of UI design – finding new ways to visualise data, and ensure our product is intuitive and user friendly.

Ernesta’s decision to join Cervest was inspired by her desire to make the world a safer, better and more aware place.

Ramani Lachyan 
Junior Research Scientist

Ramani joined Cervest after obtaining her Master’s in Physics from ETH, Zurich. She brings with her valuable experience gained through working on model building and data simulation pertaining to neutrino physics.

Ramani has joined Cervest as a Junior Research Scientist and will be working on creating algorithms that allow for the extraction of physical observables from data from a range of sources.

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Lukas Scholtes 
Statistical Scientist

Lukas completed his maths BSc at ETH Zurich, followed by an MSc in statistics at Imperial College. He wrote his MSc thesis in collaboration with Cervest, on the modelling of North American wheat yields via Bayesian parametric and non-parametric methods.

Following an internship in the NGO sector in Bangladesh and a stint in the world of fintech, Lukas comes to Cervest, excited to apply himself to the challenges that are arising as a consequence of unsustainable land-use policies and climate change.

Aidan Coyne
Junior Researcher

Aidan is currently pursuing a Bachelor of Arts and Sciences in Science and Engineering at University College London with a focus on computer science and data informatics.

At Cervest, Aidan is working on researching and assimilating a database of articles categorising the reasons for extreme decreases in crop yields across Europe. The information will be used to help predict the impact of weather events on crop yield and contribute to  Cervest’s ability to bring clarity to decision making around climatic and extreme events.

While studying, she also volunteers with environmental conservation groups and youth engagement programmes.

Alex Rahin
Chief Product and Technology Officer

Alex is an entrepreneurial technology leader with over 25 years of hands-on experience in developing and executing innovative product and technology strategies.

Prior to Cervest, Alex served as Chief Product & Technology Officer at Beamly, a technology and data company delivering data platforms & infrastructure, data & content management solutions, and AI-powered eCommerce analytics, leading Beamly to a successful exit in 2020.

Before working at Beamly, Alex served as Chief Data Officer at Just Eat, where he built an end-to-end data organization, leading the company’s data-driven transformation with the launch of a unified customer data platform and scalable machine learning products

Earlier in his career, Alex held prominent roles at Zalando, Amazon, Microsoft, Intel, Hewlett Packard, and three technology startups achieving successful exits in all three.

Alex holds a BSc in Electrical Engineering & Computer Science from UC Berkeley.