The recommendations of the Task Force on Climate-related Financial Disclosure (TCFD) was published mid-2017, and since then there has been a push to normalise the recommendations in corporate disclosures and business decision making.
An increasing number of countries are asking for TCFD-aligned climate risk disclosures in the annual reporting process. Indeed CDP has incorporated the recommendations of TCFD into its disclosure cycle, and investors are asking businesses to prove their future resilience and sustainability using TCFD alignment.
The Ecometrica Platform is the only software solution which can incorporate organisational sustainability reporting, detailed spatial analysis, and climate science all in one place. Ecometrica leading software platforms are used in conjunction for the most effective TCFD disclosure possible.
One of the challenges of TCFD reporting is that different industry sectors and geographies have varying physical climate risks. Knowing which risks to focus on requires understanding your business, mapping the global footprint of its operations, and assessing the impact of different future climate scenarios.
Ecometrica’s global TCFD risk assessor comes pre-loaded with multiple future climate scenarios covering a wide range of temperature outcomes, including Paris-aligned scenarios. By mapping your business’ direct operations and suppliers, you will quickly be able to understand the headline physical climate risks for each location.
In particular, our tool focuses on physical risk metrics for heat extremes including heatwaves, precipitation extremes / flooding, drought conditions and sea level rise, with additional new indicators in progress. It also makes use of climate vulnerability and readiness scores to assess risk in the context of current country-level conditions.
Transition risks are those associated with the move to a lower-carbon economy, such as policy and legal, technology, market, and reputation. Understanding transition risks can be a challenge as they can change instantly depending on a government or international agreement, or changes in the market or public opinion.
We use a combination of our expertise and industry leading technology to provide insight on potential transition risks material to your business. By mapping your direct operations and suppliers’ Greenhouse Gas emission data at the asset level, you can assess the potential transitional risk associated.
Scenario analysis is an important component of TCFD reporting – but it can also be a very complex part of the process.
To help simplify things, we translate data from authoritative climate models with projections for Paris-aligned scenarios and Shared Socioeconomic Pathways (SSPs). With everything together in one place, we can help you understand potential physical impacts across your global operations and how these impacts are expected to change in future decades across a range of best-case to worst-case scenarios.
Our advanced analysis tools can break down the information further, allowing businesses to quickly identify and prioritise their operations or suppliers which are in regions that are anticipating the most dramatic change.
Risks vs opportunities
Investors and other stakeholders are interested not just in the risks posed to business from climate change, but also the opportunities. Including both shows that you have not just thought about how to protect your business but also how you can generate growth and profits in the years to come making your organisation a solid investment.
While traditionally corporate sustainability disclosures have focused on the business impact on the climate, TCFD alignment requires thinking about how the business will adapt to a changing climate.
Reporting in line with TCFD communicates to stakeholders that the company understands the importance of dual materiality when addressing climate change and it shows you understand that you not only have an impact on the climate but also that climate change has the potential to have a material impact on your business.