Michael Bloomberg to head up new climate task force
Former New York City mayor Michael Bloomberg is to lead a new industry-led task force which will offer climate change-related financial risk disclosures to companies and investors.
Announced at the COP21 climate change conference in Paris today (4 December), the task force will provide transparent information and recommendations to investors and companies; helping financial markets understand the implications of climate-related risks.
It has been launched by the Financial Stability Board (FSB) - the G20 financial body that monitors the financial system. It will begin with 10 voluntary members, which the FSB says could quickly rise to at least 30.
Speaking at the COP21 conference earlier, FSB chair Mark Carney said: “The FSB is asking the Task Force on Climate-related Financial Disclosures to make recommendations for consistent company disclosures that will help financial market participants understand their climate-related risks.
“Access to high quality financial information will allow market participants and policymakers to understand and better manage those risks, which are likely to grow with time. Michael’s experience working on climate change issues, his unparalleled track record of execution in a broad range of fields and his lifelong commitment to open and transparent financial markets make him the ideal leader for the Task Force.”
Bloomberg will head up the global taskforce in an attempt to aid financial markets in understanding the growing climate-change risks. As part of his work, Bloomberg will ensure the Task Force conducts public outreach.
Speaking about his role, Bloomberg said: “It’s critical that industries and investors understand the risks posed by climate change, but currently there is too little transparency about those risks. When Governor Carney laid out the idea for a Task Force on Climate-related Financial Disclosures, I offered him my full support to help make it a success.
“While the business and finance communities are already playing a leading role on climate change, through investments in technological innovation and clean energy, this task force will accelerate that activity by increasing transparency. And in doing so, it will help make markets more efficient, and economies more stable and resilient.”
Report & invest
The FSB says the task force will conduct and complete its work over the next 12 months, across two stages, laying out recommendations for the physical, accountable and transition risks associated with climate change.
The role of investors in mitigating climate risks has already seen global corporate emissions reduced by 641 million tonnes through collaboration with CDP's Carbon Action initiative.
The announcement comes just a day after KPMG warned that it is practically impossible for stakeholders to compare performances because of inconsistent carbon reporting.
Mark Campanale, founder and executive director, Carbon Tracker
“Carbon Tracker welcomes further steps to progress the Task Force on Climate-related Financial Disclosures. A key challenge the Task Force faces will be to identity and agree reliable, independent information on ‘carbon bubble’ and ‘stranded assets’ risks, to help market participants manage their transition to a low carbon economy. We remain ready to support this process.”
Stephanie Pfeifer, chief executive of IIGCC - a European network of Institutional Investors with €13 trillion in assets
“Access to high quality information can only help accelerate the reallocation of capital by investors in ways that will accelerate the low carbon transition. More consistent and reliable carbon disclosure will make it easier for investors to evaluate climate risk in their portfolios and understand where the opportunities in clean energy and other essential low carbon technology lie.”
Fiona Reynolds, managing director of the PRI (Principles for Responsible Investment)
“Investors are increasingly aware of the material risks associated with climate change, which has been underscored by a number of policymakers, including Bank of England Governor Mark Carney, who has warned of the risks associated with stranded assets. In the past, investors were content to let governments act; now, we are seeing a real shift, with investors being much more proactive and taking the lead in urging governments, policymakers and other stakeholders to take action on climate change.”
Alice Garton, Company and Financial Lawyer for ClientEarth
“This increased focus by the FSB, and our own litigation programme designed to create a step-change in climate risk reporting, will drive investors’ capital away from businesses who are unable to demonstrate they are adapting to climate change to those that are. Those businesses that fail to adapt to the new normal will find it impossible to survive.”