A report by the British parliament’s Environmental Audit Committee, published yesterday (June 4), calls for mandatory public reporting by large companies and asset managers, particularly pension funds, on their exposure to climate change by 2022.
Right now, there are no such requirements. The closest thing is the reporting guidelines established by the Task Force on Climate-related Financial Disclosures (TCFD), an international organization that includes Bank of England governor Mark Carney and former New York mayor Michael Bloomberg. But these disclosures are voluntary, and while the U.K. government supports them, the committee argues no action has been taken to actually see them used.
A KPMG report late last year found 72 percent of large- and mid-cap companies worldwide didn’t acknowledge the financial risks of climate change in their annual reports. However, these risks are clearly high. Insurance company Swiss Re estimates the global economic cost of natural disasters, including those caused by human-induced climate change, in 2017 was $337 billion, and that climate change is likely to increase the frequency and severity of such events.