In March 2022, the United States Securities and Exchange Commission (SEC) proposed that all publicly listed US companies be mandated to report their climate data in alignment with Taskforce on Climate-related Financial Disclosures (TCFD) recommendations.
Today, the TCFD is one of the most commonly used disclosure frameworks across the globe, with countries such as the UK and New Zealand among the first to require TCFD-aligned climate reporting. In fact, the TCFD is now set to move into the administration of the International Sustainability Standards Board (ISSB), a merger that is expected to bring further cohesion among the plethora of sustainability standards and frameworks available for asset managers. Thankfully in the past six years, financial institutions have recognized that climate risks are intertwined with financial risks, motivating them to drive emissions down.
🌟 Key Benefits:
• 🕒 Save Time: Reduce the time and cost spent on TCFD reporting by 70%.
• 🔍 Enhance Clarity: Transition from laborious qualitative (open-ended) responses to scenario-based multiple-choice questions.
• 📊 TCFD Automation & Insights: Streamline TCFD reporting, complete with scores and suggestions for data-driven decision-making.
• 🌱 Stay Ahead of the Curve: Lay a strong foundation for future compliance with evolving standards such as the ISSB Climate Disclosure Standards and more.
In 2017, the Task Force on Climate-related Financial Disclosures (TCFD) introduced a framework to help organizations report their climate-related financial information and assess climate risks and opportunities.
Today, the TCFD is one of the most commonly used disclosure frameworks across the globe, with countries such as the UK and New Zealand among the first to require TCFD-aligned climate reporting. In fact, the TCFD is now set to move into the administration of the International Sustainability Standards Board (ISSB), a merger that is expected to bring further cohesion among the plethora of sustainability standards and frameworks available for asset managers. Thankfully in the past six years, financial institutions have recognized that climate risks are intertwined with financial risks, motivating them to drive emissions down.
Originally published in March 2022, the SEC proposed that all publicly listed US companies be mandated to report their climate data in alignment with reporting recommendations from the Taskforce on Climate-related Financial Disclosures (TCFD).
When the proposal was then opened for public comment, the SEC received over 3,400 letters, significantly more than it customarily does when seeking public input.
While the SEC ruling applies to public companies, given the current global regulatory environment, along with calls for greater scrutiny of ESG claims within the private equity industry, it is only a matter of time before similar climate considerations be asked of private funds. Moreover, although the proposal will almost certainly face some measure of legal challenges, this will likely not deter 98% of companies from implementing climate reporting, according to a PricewaterhouseCoopers survey of 300 senior executives at US public companies with at least $500 million in revenues
Explore how private equity firms can prepare for enhanced Diversity, Equity, and Inclusion (DEI) reporting in light of ILPA’s updated guidelines. Learn about the importance of robust data collection, effective benchmarking, and automation to meet investor demands and foster a more equitable industry. Discover how ESGTree’s tailored solutions can streamline your DEI data management and reporting processes.
In February of this year, private equity multinational The Carlyle Group publicly committed to hitting net zero greenhouse gas emissions by 2050 across its entire portfolio. The commitment makes much sense; private equity and venture capital firms are ideally suited to lead the charge towards net zero. Unlike their public market asset management peers, they are more directly involved in their portfolio companies, often holding board seats, and therefore able to influence ESG strategy. Because their role is to help their companies grow, we believe it is imperative for private capital firms to build carbon accounting into the DNA of their investments.
By market size alone, impact investing might be far smaller than ESG investing, but its unique profile makes it a critical part of sustainable finance. Its obligation to actively “do good” and contribute towards a positive net change in the communities it engages, rather than concern itself purely with risk mitigation, means that the pursuit of ESG isn’t left to the machinations of pure capitalism. In fact, its unique “do active good” mandate serves as an important “best practices” guide when it comes to ESG reporting and measurement in general. This is because we’ve learned that impact investors can optimize their ESG data using the three major methods below:
The rallying cry of the American Revolution – no taxation without representation – is today taken as self-evident but deserves a re-examination in light of the climate crisis and sustainable development and ESG efforts. In fact, it could be argued that the whole field of sustainability is an example of taxation without representation.
By 2025, ESG assets are estimated to exceed USD$50 trillion. In other words, one third of Assets Under Management (AUM) will be classified as ESG assets in the next three years.Some recent developments spurring the push for ESG include: In 2020, the Big Four accounting firms launched a set of unified metrics on ESG disclosures. The same year, the Chartered Financial Association (CFA) Institute unveiled its first-ever global consultation on ESG.
The rallying cry of the American Revolution – no taxation without representation – is today taken as self-evident but deserves a re-examination in light of the climate crisis and sustainable development and ESG efforts. In fact, it could be argued that the whole field of sustainability is an example of taxation without representation.
By market size alone, impact investing might be far smaller than ESG investing, but its unique profile makes it a critical part of sustainable finance. ESG assets are on course to hit USD$50 trillion over the next three years, while impact investments are gauged to hover around USD$1 trillion. This begs the question: as ESG continues its meteoric rise, what will happen to impact investing?
By now, it’s well established that ESG integration is not only good for the world but also good for business net win, in other words.Indeed, study McKinsey concluded that “the value at stake from sustainability (ESG) concerns can be as high as 70% of earnings before interest, taxes, depreciation and amortisation.” Put another way, up to 70% of a business’s potential earnings could be lost to ESG risks.
Indeed, a study by McKinsey concluded that “the value at stake from sustainability (ESG) concerns can be as high as 70% of earnings before interest, taxes, depreciation and amortisation.” Put another way, up to 70% of a business’s potential earnings could be lost to ESG risks.
