Sustainability Groups “Converge on Climate Risk” with G20 Task Force Recommendations

Paper reveals how corporations can adopt transparency around extreme weather events.

A paper from the Sustainability Accounting Standards Board (SASB) and the Climate Disclosure Standards Board (CDSB) reveals how the two organizations are aligning with the recommendations of the G20 Task Force on Climate-related Financial Disclosure (TCFD).

The paper, “Converging on Climate Risk: CDSB, the SASB, and the TCFD,” reflects on how extreme weather events, such as those recently experienced in the Caribbean, South Asia, and the US, extend to material impacts on companies both regionally and worldwide. Lack of transparency around corporate exposure to such risks presents a challenge for investors to accurately assess them.

For financial markets to remain healthy and transition to a low-carbon economy, the TCFD developed a set of recommendations that companies can use for the voluntary disclosure of information about climate-related financial risks and opportunities. These recommendations can then be shared to keep investors, lenders, and insurance underwriters better informed.

“As the impacts of sustainability-related business risks on business and society—including those associated with climate change—have risen in prominence, a variety of reporting approaches have proliferated, creating confusion in the market over which one to use,” Jean Rogers, founder of SASB and chair of the SASB Standards Board, said in a statement. “Alignment between the SASB, CDSB, and TCFD provides streamlined guidance for issuers, more useful information for investors and other decision makers, and increased stability and resilience for the broader capital markets.”

All three organizations’ work naturally aligns through shared philosophical and technical beliefs, such as focusing on climate risk and financially material opportunities as well as promoting the disclosure of material information in mainstream financial filings. The paper outlines how the SASB and CDSB will continue to improve their relationship with the TCFD. It also provides companies with the basics for moving forward with the TCFD recommendations via complementary frameworks.

“We have been working with the SASB for years through our Technical Working Group and, most recently, through our Board, and we are happy to strengthen our mutual agreement to support the work of the TCFD with this paper,” Richard Samans, chairman, CDSB, said in a statement. “As we work together to improve global climate and environmental reporting practices, we hope to provide companies with more comprehensive guidance on how to move the climate conversation from the sustainability room to the finance and governance level. We thank the SASB for the great work they have done on climate risk and mainstreaming climate disclosure, and we look forward to collaborating further in the future.”

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