The New Zealand Government’s recent announcement, requiring all banks, asset managers and insurance companies with more than NZ$1 billion in assets to disclose their climate risks—in line with the emerging global standard from the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD) by 2023—should and must be welcomed.
This marks the first Government in the world to make the framework mandatory. It provides a common legislative framework, thereby creating a level playing field with known rules and standards, something that businesses often use as a reason not to push too far ahead of the pack.
It also allows for like-for-like comparison and assessment between companies given the common standard set by the framework —an important start to benchmarking performance and progress.
It is remarkable to note the success of the TCFD, a voluntary agreement that only started at the end of 2015, which can now boast over 1,400 company signatories. And other countries are starting to take note, for example the TCFD Consortium launched in Japan with their Ministry of Economy, Trade and Industry, all welcome steps in the right direction.
So who will be next? Will the Bank of England make good on its intent to decarbonise its quantitative easing programme, or to attach climate conditions to asset purchases? And what about other European Central Banks? Will they be brave enough to tie some climate conditions to their economic recoveries during and post Covid-19?
We would hope that given we now have a precedent in New Zealand that others will dare to follow.
What this announcement signifies is that organisations can no longer ignore the evidence. Whether it be science, socio-economic impacts or data and technology, identifying the potential risks that climate presents, action needs to be taken.
Cervest can help organisations understand the climate risks that threaten their future. It quantifies the climate risk for any physical asset on Earth, for any timescale and scenario through an open and automated platform, using Earth Science AI, a blend of physical science, data engineering and automation and AI. Organisations can access this actionable intelligence via an open platform so climate intelligence can be shared for all connected parties such that they may have a shared view of reality, thereby avoiding ‘self declared’ assessments. The independent analysis based on credible science with clear data provenance provides the basis for a non-biased assessment that can serve all parties, thereby allowing for the democratization of climate intelligence, a cornerstone element if we are to stand a chance of combating the climate crisis.
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