The Task Force on Climate-related Financial Disclosures set up by the Financial Standards Board has outlined the principles and objectives for its work. In its first report the Task Force said that despite a range of initiatives the existing climate-related disclosure remained fragmented and incomplete and there was only a limited number of reporting regimes focusing on the financial risks posed by climate-related impacts. However, generally existing laws and regulations already require disclosure of climate-related risk in financial filings if it is deemed material.

The Task Force said it plans to build on existing work to provide a framework that promotes alignment and focuses on financial risks stemming from physical and non-physical climate-related impacts to better meet the specific needs of users and preparers. By the end of the year the task force will  set out specific recommendations and guidelines for voluntary disclosure by identifying leading practices to improve consistency, accessibility, clarity, and usefulness of climate-related financial reporting.

In its work the task force said it would target climate-related financial disclosures pertaining to near-, medium- , and long-term physical and non-physical impacts faced by both non-financial companies and the financial sector, with the goal of furthering market understanding and evaluation of relevant financial risks and opportunities. The Task Force will consider the features and characteristics of information to be disclosed—including quantitative, qualitative, historical, and forward-looking metrics—and how disclosures are used, analysed, and aggregated.

Its recommendations will be primarily for issuers of public securities, listed companies, and key financial-sector participants. The Task Force said it would seek to promote and drive voluntary adoption by ensuring that its recommendations reflect a consensus view of leading practices for disclosure; advance principles of good governance, fiduciary duty, and stewardship; and provide a basis for consistent and comparable application by firms in countries throughout the G20.

Mindy Lubber, president of the nonprofit sustainability group Ceres and director of the Investor Network on Climate Risk (INCR), welcomed the report and said, “The TCFD’s plans represent a robust and comprehensive approach to providing investors the information they need."

A public consultation on the report has now be launched with comments requested by May 1, 2016.