It was thought that climate change had nothing to do with business. To think about it in the long term, do you dare?
Let’s talk about it. You are running a business. In a disaster triggered by climate change, your staff may not be able to go to work for alarming weather warnings. A storm may ruin your office building. The climate event is disruptive enough to cease the productivity.
There is a will; there’s a way. Before acting, stop and think about what you need. Do you have a figure about how likely your business will be impacted? What about the model for your future investment in the climate change era, which seems unlikely to get well soon? We are almost getting there – what you need is the climate-related financial numbers for your decision making.
The Financial Stability Board has created the TCFD (the Task Force on Climate-Related Financial Disclosures) to support the idea of transparency in climate-related financial reporting. Numbers of recommendations are extracted here from the TCFD report for you to realise the objectives and guidelines.
First, Governance – to disclose the organization’s governance around climate-related risks and opportunities.
Secondly, Strategy – to disclose the actual and potential impacts of climate-related risks and opportunities on the organization’s businesses, strategy, and financial planning where such information is material.
Risk management – to disclose how the organization identifies, assesses, and manages climate-related risks.
Metrics and targets – to disclose the metrics and targets used to assess and manage relevant climate-related risks and opportunities where such information is material.
The four core elements of recommendations are based on the principles for effective disclosure.
Principles for effective disclosures: 1) represent relevant information, 2) be specific and complete, 3) be clear, balanced, and understandable, 4) be consistent over time, 5) be comparable among companies within a sector industry or a portfolio, 6) be reliable, verifiable, and objective, and 7) be provided on a timely basis
It may be hard for you to imagine what will happen to your business in a catastrophe. Scenario analysis is recommended for you to consider the future impact.
As suggested by TCFD, the scenario analysis may not give you an accurate impact result; it still leads you to think about your business’s worst-case. Sustainable development is all about the environment and human development, what makes your business to be sustainable.
The TFCD recommendations are boundlessly applicable across various industries and countries. It is time to think forward and act on it.
By: ANewR Consulting Limited, a digital environmental consultant headquartered in Hong Kong since 2008. Our expertise has grown into the context of air and water qualities, noise, green building, waste management, and remediation. With extensive know-how in environmental planning and assessment, feasibility study and policy review, ecological design, monitoring, and audit (EM&A), ANewR has matured to be a leading management consultancy. Standing in the digital transformation reign, ANewR has participated in various environmental digital projects – interactive 3D visualisation, immersive automation virtual environment, Virtual reality, automation system, and monitoring platforms.
(Website: https://anewr.com, LinkedIn: ANewR Consulting Group, Twitter: ANewR – Everyday Newer, YouTube: https://www.youtube.com/channel/UCnpvmxnR9hbNxytSfBdfV8Q/videos)