Financial Implications of Climate ChangeBy MBN Staff | Mon, 06/29/2020 - 11:45
The Task Force on Climate-Related Financial Disclosures (TCFD) announced the launch of the Spanish translation of its recommendations regarding climate change. The translations encourage wider adoption of climate disclosure practices across the entire Spanish-speaking business community.
TCFD describes its mission as providing recommendations for companies to disclose climate-related risks and opportunities and the financial implications of climate change on businesses through the TCFD’s globally recognized voluntary disclosure framework. Increased transparency on climate-related issues, as a result of disclosures, will help to promote more informed financial decision-making by investors, lenders and insurance underwriters, says the company.
“Businesses across Latin America have a vast opportunity to become global leaders in disclosing and addressing the financial threats of climate change – and helping build a more resilient global economy,” said Mary Schapiro, Head of the TCFD Secretariat and Vice Chair for Global Public Policy at Bloomberg LP. “We are proud to make the TCFD recommendations more accessible to the business community across Latin America and hope that the translations will foster accelerated uptake across the region,” she added.
“While countries of Latin America are unique and diverse, we are unified by the fact that greater disclosure of climate risk will help the financial community better allocate capital toward companies and industries across the region that are best prepared to address those risks,” said Alan Gómez, TCFD Member and Vice President of Sustainability at Citibanamex.
“Greater implementation of the TCFD recommendations will increase transparency and provide information to the international market and global investment funds seeking to invest in companies and projects in the region that are prepared to tackle the long-term risks of climate change to their business,” said Cristian Lefevre, EY Chile Chairman.
As of June 2020, more than 1,300 organizations around the world are official supporters of the TCFD. By publicly declaring their support for the TCFD and its recommendations, these companies and organizations demonstrate their commitment to building a more resilient financial system through climate-related disclosure. There are two operators with assets in Mexico that publicly support TCFD: Fresnillo plc and Pan American Silver.
TCFD describes the mining industry as being “typically capital intensive, requiring high investments in plants, equipment and buildings that are (relatively) fixed in terms of location and dependent on sources of raw and refined materials. This may reduce the flexibility of organizations in this group to adapt to risks of climate change. Many of this group’s activities result in financial exposures around high greenhouse gas emissions and high energy consumption. Furthermore, a number of industries in this group are dependent on water availability and vulnerable to the effects of acute or chronic physical risks from weather events.”
TCFD recommends miners to focus their disclosures on qualitative and quantitative assessments and potential impacts of the following:
- Stricter constraints on emissions and/or pricing carbon emissions and related impact on costs
- Increasing frequency and severity of acute weather events or increasing water scarcity that could impact the operating environment
- Opportunities for products (or services) that improve efficiency, reduce energy use and support closed-loop product solutions