Special Report: Mandatory Climate Disclosures on the Near Horizon

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Special Report: Mandatory Climate Disclosures on the Near Horizon

Biden’s victory in the 2020 U.S. election adds new urgency for firms to quantify and analyze potential impacts of climate risk to their bottom lines.

“2020 has proven beyond a doubt that the private sector has much work to do to prepare for future disruptions. This is especially true regarding the risks that climate change presents to the stability of financial markets.”

—Dr. Jesse Keenan, Jupiter Intelligence Board of Advisors and Editor of the CFTC report “Managing Climate Risk in the U.S. Financial System”

Private and public sector leaders alike recognize climate change is a severe threat to both bottom lines and the economy as a whole. Following the Paris Climate Agreement in 2015, the release of the Task Force on Climate-related Financial Disclosures (TCFD) recommendations in 2017, and mounting year-on-year losses from an increasing number of severe weather events, climate-related issues topped the 2020 Global Risk Report for the first time. In response, countries have begun to institute regulations to mandate that publicly traded companies disclose their climate risks, with France, New Zealand and the United Kingdom chief among them.

Climate risk disclosures are becoming mainstream public policy and corporate governance tools for world leaders in government, business, and finance to measure and adapt to the physical and transitional risks of climate change. With Joe Biden as the next President of the United States, companies can expect the most action on climate change of any administration thus far. Thanks to a growing consensus of U.S. regulators about the need to do more to manage the risks of climate change, 2021 and beyond will mark a groundswell of executive branch support for mandatory climate disclosure.

Forward-thinking asset managers, lenders, insurers, retirement funds, and publicly traded firms—and those planning to go public—should recognize that these tailwinds will only intensify. The central banks of the largest, most important global financial hubs now view physical and transitional climate risks as materially important to their economies. Further, stricter, more comprehensive legislation that mandates climate risk assessment and disclosure are anticipated, especially in the United States, the European Union, and Japan.

Biden’s victory in the 2020 U.S. election adds new urgency for firms to quantify and analyze potential impacts of climate risk to their bottom lines.

“2020 has proven beyond a doubt that the private sector has much work to do to prepare for future disruptions. This is especially true regarding the risks that climate change presents to the stability of financial markets.”

—Dr. Jesse Keenan, Jupiter Intelligence Board of Advisors and Editor of the CFTC report “Managing Climate Risk in the U.S. Financial System”

Private and public sector leaders alike recognize climate change is a severe threat to both bottom lines and the economy as a whole. Following the Paris Climate Agreement in 2015, the release of the Task Force on Climate-related Financial Disclosures (TCFD) recommendations in 2017, and mounting year-on-year losses from an increasing number of severe weather events, climate-related issues topped the 2020 Global Risk Report for the first time. In response, countries have begun to institute regulations to mandate that publicly traded companies disclose their climate risks, with France, New Zealand and the United Kingdom chief among them.

Climate risk disclosures are becoming mainstream public policy and corporate governance tools for world leaders in government, business, and finance to measure and adapt to the physical and transitional risks of climate change. With Joe Biden as the next President of the United States, companies can expect the most action on climate change of any administration thus far. Thanks to a growing consensus of U.S. regulators about the need to do more to manage the risks of climate change, 2021 and beyond will mark a groundswell of executive branch support for mandatory climate disclosure.

Forward-thinking asset managers, lenders, insurers, retirement funds, and publicly traded firms—and those planning to go public—should recognize that these tailwinds will only intensify. The central banks of the largest, most important global financial hubs now view physical and transitional climate risks as materially important to their economies. Further, stricter, more comprehensive legislation that mandates climate risk assessment and disclosure are anticipated, especially in the United States, the European Union, and Japan.

This Jupiter Intelligence special report provides leaders with a breakdown of the complex and evolving regulatory environment as well as guidelines on best practices for monitoring, measuring and disclosing climate risks.

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