{"id":32449,"date":"2016-12-14T12:00:34","date_gmt":"2016-12-14T12:00:34","guid":{"rendered":"http:\/\/www.climatechangenews.com\/?p=32449"},"modified":"2016-12-14T11:02:36","modified_gmt":"2016-12-14T11:02:36","slug":"g20-panel-tells-energy-giants-to-come-clean-on-climate-risks","status":"publish","type":"post","link":"https:\/\/www.climatechangenews.com\/2016\/12\/14\/g20-panel-tells-energy-giants-to-come-clean-on-climate-risks\/","title":{"rendered":"G20 panel tells energy giants to come clean on climate risks"},"content":{"rendered":"<p><strong>The world&#8217;s top\u00a0energy companies, banks and pension funds will be asked to start working on\u00a0detailed climate change plans under proposals released in London by a G20-mandated panel of financial experts.<\/strong><\/p>\n<p>Exxon-Mobil, Shell, BP and Chevron\u00a0will be among those required\u00a0to\u00a0explain\u00a0how their long term\u00a0plans could be impacted if governments adopt tougher low carbon policies, or when global warming starts to impact supply chains.<\/p>\n<p>Businesses should &#8220;take into account&#8221; national climate plans submitted as part of the 2015 Paris climate deal, and estimate their\u00a0performance under a greenhouse gas\u00a0emissions trajectory consistent with holding the increase in the global average temperatures to below 2C.<\/p>\n<p>\u201cWhat gets measured better gets managed better,&#8221; said\u00a0former New York mayor Mike Bloomberg, chair of the 32-strong panel.\u00a0Without transparency on the risks linked to climate change, he warned, the financial sector could blunder into another crisis to rival 2008&#8217;s sub-prime crash.<\/p>\n<p>The report comes with the support of companies valued at US$1.5 trillion and with\u00a0assets of $20trn in management &#8211; among them\u00a0Aviva, Blackrock, Barclays, Deloitte, Dow, HSBC and TATA.<\/p>\n<p>&#8220;The increasing attention on climate change deserves further efforts in either industry commitment and disclosure,&#8221; said Claudio Descalzi, CEO of Italian oil giant Eni, another company to participate in the study.<\/p>\n<div class=\"page\" title=\"Page 18\">\n<div class=\"layoutArea\">\n<div class=\"column\">\n<p>Gu Shu, president of the Industrial and Commercial Bank of China, said the report would stand as a &#8220;brand-new benchmark to report climate-related financial risks.&#8221;<\/p>\n<\/div>\n<\/div>\n<\/div>\n<blockquote><p><a href=\"http:\/\/www.climatechangenews.com\/newsletter-sign-up\/\" target=\"_blank\"><strong>Weekly briefing:<\/strong>\u00a0Sign up for your essential climate politics update<\/a><\/p><\/blockquote>\n<p>Their thinking is simple: if big corporations\u00a0wait till the water is lapping at the factory door, or a carbon price makes their products too expensive, it\u2019s going to shock the system.<\/p>\n<p>Disclosure of threats to the bottom line will help steer investment\u00a0into\u00a0climate-proofed assets.<\/p>\n<p>Until\u00a0now, it\u2019s been unclear how businesses should go about this.\u00a0Guidelines in today&#8217;s <a href=\"https:\/\/www.fsb-tcfd.org\" target=\"_blank\">150-page report<\/a>\u00a0produced under the authority of the Financial Stability Board and the G20 aim to put that right.<\/p>\n<p>Under the proposals, companies would need to come clean on climate governance, strategy, risk management and targets.<\/p>\n<p>\u201cInadequate information about risks can lead to a mispricing of assets and misallocation of capital and can potentially give rise to concerns about financial stability since markets can be vulnerable to abrupt corrections,\u201d the report warns.<\/p>\n<blockquote><p><strong>FSB &amp; G20 climate risk recommendations<\/strong><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-32450\" src=\"http:\/\/www.climatechangenews.com\/files\/2016\/12\/FSb_picture.jpg\" alt=\"FSb_picture\" width=\"800\" height=\"450\" srcset=\"https:\/\/cdn.climatechangenews.com\/files\/2016\/12\/FSb_picture.jpg 800w, https:\/\/cdn.climatechangenews.com\/files\/2016\/12\/FSb_picture-112x63.jpg 112w, https:\/\/cdn.climatechangenews.com\/files\/2016\/12\/FSb_picture-300x168.jpg 300w, https:\/\/cdn.climatechangenews.com\/files\/2016\/12\/FSb_picture-768x432.jpg 768w, https:\/\/cdn.climatechangenews.com\/files\/2016\/12\/FSb_picture-600x337.jpg 600w\" sizes=\"(max-width: 800px) 100vw, 800px\" \/><\/p>\n<p><em>*The recommendations are voluntary and won\u2019t come into effect until the G20 meeting in July, where leaders will be asked to support the measures<\/em><\/p><\/blockquote>\n<p>In a development hailed by one analyst as a game-changer, the report\u00a0recommends firms release regular scenarios assessing how they might fare if policies were in place to limit warming to 2C, or conversely if temperatures spiral to 4C or 5C.<\/p>\n<p>It means accounting for carbon pricing, litigation from campaigners, shifts in customer behaviour and preferences, and physical risks from extreme weather.<\/p>\n<p>Energy firms with fossil fuel-heavy portfolios\u00a0are an obvious target for this: assets they invest in now may last until\u00a02100, well beyond the Paris climate deal goal of zero emissions from fossil fuels after 2050.<\/p>\n<p>But they\u2019re not the only game in town. The panel wants banks, insurers, asset managers, transport companies and other major investors like pension funds to play ball.<\/p>\n<blockquote><p><strong>G20 &amp; FSB reporting principles<\/strong><br \/>\n&#8211; Disclosures should be\u00a0relevant,\u00a0specific, clear, balanced,\u00a0consistent over time<br \/>\n&#8211; Disclosures should be comparable among companies within a sector, industry, or portfolio<br \/>\n&#8211; Disclosures should be reliable, verifiable, objective and timely<\/p><\/blockquote>\n<p>The focus is risk, but also opportunity: how will efficient transport, energy security from investing in renewables and diversification new markets impact companies in the future?<\/p>\n<p>Instead of being hidden away in specific climate studies, the taskforce wants them to integrate their findings into annual reports, and detail how boards and management are tackling the issue.<\/p>\n<p>Information on climate risk has been sketchy, according to Bank of England governor Mark Carney, chair of the Financial Stability Board, a global body that assesses market vulnerabilities.<\/p>\n<p>\u201cThe disclosure recommendations will give financial markets the information they need to manage risks, and seize opportunities, stemming from climate change,\u201d he said in a statement.<\/p>\n<p>\u201cAs a private sector solution to a market issue, the Taskforce has focused on the practical, material disclosures investors want and which all capital-raising companies can compile.\u201d<\/p>\n<blockquote><p><a href=\"http:\/\/www.climatechangenews.com\/2015\/03\/11\/climate-one-of-top-risks-facing-insurance-industry-mark-carney\/\" target=\"_blank\"><strong>Mark Carney:<\/strong>\u00a0Climate one of \u201ctop risks\u201d facing insurance industry<\/a><\/p><\/blockquote>\n<p>The measures are voluntary, but the combined authority of the FSB, Carney, Bloomberg and the financial giants who have invested time into the report&#8217;s delivery mean they count, say analysts and business leaders.<\/p>\n<p>\u201cMy expectation is that companies will take note. There has been a lot of interest among big and small companies \u2013 and there\u2019s a sense it could be a big report,\u201d said Cameron Hepburn, co-director of the Net Zero Carbon Investment Initiative at the Oxford Martin School.<\/p>\n<p>\u201cThis is a step change from what has been going on in the past \u2013 but it doesn\u2019t go far enough\u2026 what we need is a cumulative total of corporate emitters. Only then can we see how far off track we are.\u201d<\/p>\n<div class=\"page\" title=\"Page 29\">\n<div class=\"layoutArea\">\n<div class=\"column\">\n<p>&#8220;I am particularly happy, that the climate change discussions have now moved into the corporate boardrooms and financial portfolios, which for years were limited to environmental activists and philanthropic groups,&#8221; said Koushik Chatterjee, a board member at Tata Steel.<\/p>\n<div class=\"page\" title=\"Page 29\"><\/div>\n<p>&#8220;I strongly believe that addressing climate change has come to the front and center of board deliberations and failure to have meaningful debate and strategy around the subject will cause existential risks for the company.&#8221;<\/p>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"Voluntary rules for climate disclosure will force companies to evaluate role and strategy in a carbon-constrained world, say experts","protected":false},"author":2,"featured_media":32452,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[2434,607,3863,6,3859],"tags":[],"coauthors":[],"class_list":["post-32449","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-2c","category-carbon-markets","category-finance","category-energy","category-world","type-news"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v23.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>G20 panel tells energy giants to come clean on climate risks<\/title>\n<meta name=\"description\" content=\"Voluntary rules for climate disclosure will force companies to evaluate role and strategy in a carbon-constrained world, say experts\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link 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