The Australian Council of Superannuation Investors (ACSI) has published the finding in its annual benchmark analysis of disclosures by ASX 200 companies, which has looked at entities’ corporate reporting up to 31 March.
The analysis has indicated that the Task Force on Climate-related Financial Disclosures (TCFD) framework, first rolled out in 2017, has now become the most common benchmark for companies’ reporting in high-risk sectors.
Riskthinking.AI’s forward-looking scenarios align with the TCFD framework and help decision-makers disclose their climate-related financial risks.
Risks related to climate change are some of the most significant threats facing the global economy, according to the World Economic Forum, which recently released its Global Risks Report 2018. In a report that scans a spectrum of economic, environmental, geopolitical, societal, and technological risks, extreme weather events, natural disasters, and failure to mitigate climate change took three of the Top 5 risks likely to have an impact on the global economy in the short term.
Increasingly, corporations are expected to report on the physical risks (e.g. wildfires, flooding, extreme storms), and transition risks (e.g. disruptions to their supply chains and potential for stranded assets) they face on account of climate change. We argue that such reporting is not only part of their fiduciary duty, but is part of smart decision-making that will help them to mitigate and hedge against such risks.
Despite a flurry of announcements from colossal fossils claiming great plans to decarbonize their operations, the companies’ actual performance shows they can’t be counted on to manage their own decline, Oil Change International concludes in a scathing new report that finds “failure across the board” in the industry’s climate plans.
The 21st century is shaping up as a world of global risks. We’ve seen the effects of global terrorism, systemic financial failure and pandemic, and we’ve adjusted (or are in the process of adjusting) to the policy responses deployed to contain these risks. Riskthinking.AI methodology is at the cutting edge of translating climate risks into financial risks; a crucial step in spurring companies to respond more effectively to the climate crisis.
No country has been able to control the virus without a “fence”- policies like travel bans, quarantines, or checkpoints that countries or states put in place to keep out infections. Fences are not enough to stop the virus on their own, but they’re a necessary part of the solution. European countries and U.S. states had hoped otherwise, but they opened their arms to their neighbours too soon and got infected in the hug. As long as states fail to control their borders, the coronavirus will come back.
Although Riskthinking.Ai’s scenarios typically map out climate-related financial risks, the same methodology is currently helping Canadian policy-makers confront the radical uncertainty of COVID-19. Please navigate to the Case Study page on the Riskthinking.AI website to learn more.
Since 1980, the U.S. has sustained 273 weather and climate disasters exceeding $1 billion in damages. Yet Americans still overwhelmingly consider climate change an “environmental issue” and a largely distant, future risk rather than a here-and-now problem. According to the Yale Program on Climate Change Communication, only 45% of Americans think people in the U.S. are being harmed by global warming “right now.”
Spurious methods used in neoclassical economics have resulted in a gross underestimation of the potential economic harm caused by climate change. Correcting for such errors makes it feasible that the economic damages from climate change are at least an order of magnitude worse than forecast by economists, and may be so great as to threaten the survival of human civilization.
The success of responses to COVID-19, and other global threats for that matter, hinges on the ability of humans to rapidly learn and change their behaviour. Riskthinking.ai’s forward-looking scenarios tools help decision-makers better understand the risks, and related costs, they face when it comes to threats like a global pandemic, and identify the kinds of behaviours and supportive policies that will have the biggest positive impact.