PARIS
Multinationals worth $3.5 trillion and financial institutions managing $25 trillion in assets pledged on Thursday to follow new guidelines for disclosing exposure to climate change risk in both operations and investments.
Spearheaded by former New York mayor Michael Bloomberg, recommendations by the Task Force on Climate-related Financial Disclosures should help shareholders determine if businesses are aligned with the global shift toward a low-carbon economy, and not unduly burdened with assets that could be stranded during that transition.
“Climate change present global markets with risks and opportunities that cannot be ignored, which is why a framework around climate-related disclosures is so important,” Bloomberg said in a statement.
“The Task Force brings that framework to the table.”
Financial and insurance companies whose CEOs have endorsed the recommendations, laid out in a 75-page report, include Bank of America, Barclays, AXA Group, Allianz SE, and Industrial and Commercial Bank of China.
Industrial powerhouses such as Unilever, Dow Chemical Company, Tata Steel and PepsiCo have also backed the move towards climate transparency, along with the “Big Four” professional services giants, and ratings agencies Moody’s and S&P Global.
Royal Dutch Shell is, so far, the only oil and gas company to tender its support.
The fossil fuel industry is especially vulnerable to questions about climate risk as the race to decarbonise the world economy gathers pace.
A report released earlier this week found that, on average, 30 per cent of investments planned by 69 oil and gas majors over the next decade — worth more than $2 trillion — could be wasted if the world economy retools to cap global warming at two degrees Celsius, researchers warned Wednesday.
The 2 degree Celsius target is the cornerstone of the 196-nation Paris Agreement, inked in 2015.
