TCFD framework: Global Progress Report for the Banking Sector Published
****** PRESS RELEASE******
BCS Consulting research evidences significant support for Climate Disclosures in the Banking industry, however, there remain a high proportion of large banks that are yet to endorse the framework.
BCS Consulting has produced its second comprehensive analysis of the implementation of the reporting framework outlined by the voluntary Task Force on Climate-related Financial Disclosures (TCFD) in the banking sector. The framework was created by the Financial Stability Board to develop consistent climate-related financial disclosures for organisations globally in 2017, with the aim of helping investors, lenders, and insurance underwriters improve their understanding and analysis of climate-related risks and opportunities.
Mardi McBrien, Managing Director, Climate Disclosure Standards Board (CDSB) says,
“To achieve our global climate ambitions, high quality, decision-useful climate information is required for investors and other decision-makers. The report highlights important progress in the sector, but it also shows us how TCFD capabilities can be enhanced to meet this requirement”
With a foreword by Sir Roger Gifford, Chair, UK Green Finance Institute, the report by BCS Consulting is a follow-up to the first detailed assessment of progress by the global banking sector in implementing the TCFD recommendations in October 2019.
Key research findings include:
- Of the 111 banks that endorse the TCFD framework only 76 started disclosing
- Europe is leading TCFD framework implementation, US and Asia-Pacific are significantly lagging behind
- Currently, 38 of the world’s top 100 banks have not yet endorsed TCFD
- The most advanced area of disclosure is banks’ own environmental operational footprint, whereas carbon impact of services banks provide and impact on strategy are the least mature
Jo Paisley, Co-President of Global Association of Risk Professionals (GARP) Risk Institute said, “Banks need to address climate risk now to remain resilient in the future. This report highlights the work still required across the sector and provides practical advice for banks to improve and meet the ambition of the TCFD framework.”
For this report, BCS Consulting Sustainable Finance team have:
- analysed the size and geographical distribution of the banks that have endorsed the TCFD framework as of June 5th 2020
- reviewed against a maturity framework the external disclosures of those that have started disclosing on the TFCD framework by December 30th 2020
- identified current best practices
- provided recommendations on how banks can improve their implementation of TCFD
The research demonstrates the real need for broad and deep collaboration across the industry and with external parties. Additionally, more prescriptive industry and regulatory guidance is required to assist organisations and achieve more standardisation for comparability.
Commenting on the report, Hector Fontaine, BCS Consulting Sustainable Finance Lead said: “Our findings highlight the progress made in framework adoption and quality of disclosures across the banking industry. However, we find that there is still considerable room to expand endorsement of TCFD, enhance information quality to facilitate achievement of Paris aligned goals, and develop consistency to provide value to key stakeholders”
Please contact Kate Garnham for any queries.
Head of Brand & Communications – BCS Consulting
The full report can be downloaded here: