In a memo addressed to the Financial Stability Board, UN climate hitman Mark Carney issued recommendations on how to make “better“ climate disclosure standards and make them mandatory in view of the next United Nations Framework Convention on Climate Change (UNFCCC), COP26 conference in Glasgow. https://www.piie.com/sites/default/files/documents/carney-2020-12-rtge-memo.pdf
“The time has come to move from voluntary, market-led disclosure to establishing pathways to mandatory climate disclosure for the largest companies in the largest jurisdictions,” the memo says.
“The FSB can help ensure that there is no divergence between competing standards and that the international community can agree on minimum baseline standards, which can be adapted for local jurisdictions. This coordination is especially important, as it will help make any disclosures decision-useful and comparable for users of the information and efficient for companies who disclose the information. The International Financial Reporting Standards (IFRS) Foundation is a mechanism by which to achieve this. Its role in overseeing the International Accounting Standards Board (IASB) and accountancy standards, as well as the depth of its existing standards in over 140 countries, ensures that it is well placed to take the TCFD recommendations forward in a manner that can achieve global consensus.“
Carney is not satisfied with the EU taxonomy: “Managing climate-related financial risks requires that disclosure go beyond the static (a company’s carbon footprint today) to the strategic (their plans to manage down their emissions). Risk management means assessing such forward-looking disclosures to judge the resilience of firms’ strategies to the transition.“
