Local finance firms urged to adhere to best practice in climate reporting

Monday 15 November 2021

During a breakfast event held by the Institute of Directors, two expert financiers relayed the importance of adhering to new regulatory standards of sustainable reporting.

The event focused on the Task Force for Climate-Related Financial Disclosures, which was created to improve and increase reporting of climate-related financial information, which it is hoped will promote sustainable practices without 'greenwashing'.

It was formed by the Financial Stability Board to address the problem of financial institutions not paying proper attention to climate risks. The Financial Stability Board is an international body which monitors and make recommendations about the global financial system. It was established after a G20 summit in London in 2009.

Recommendations associated with the Task Force were initially pursued on a voluntary basis but are rapidly becoming mandated in various jurisdictions around the world.

Guernsey is yet to make the recommendations mandatory, despite the Guernsey Financial Services Commission amending its finance sector code earlier this year to allow boards to make disclosures “where they deem it appropriate”.

“There’s no specific climate disclosure regime that has been mandated - the GFSC intentionally didn’t want to re-invent the wheel, but rather give the boards flexibility to look to establish frameworks such as the TCFD,” said Senior Audit Manager from PwC, Amy Pickering, who spoke at the event.

Pictured: Ms Pickering said 2,600 firms across the globe support the TCFD proposals.

"The GFSC finance sector code was amended earlier this year, and a requirement will be for the board to consider climate change and make disclosures where they deem it appropriate,” she said. The changes took effect from 1 October.

She was joined by Director of ESG and Net Zero, Ali Cambray, who said Guernsey businesses need to take note of changing attitudes to climate change.

“Whilst world leaders are in Glasgow to accelerate global progress on climate change at COP26, we all have our part to play. I encourage Guernsey’s business leaders to join our discussion on effective climate governance and best practice for climate risk reporting," she said. 

The message was supported by the Chair of the Institute of Directors, who said Guernsey has an important part to play in tackling climate change and should take its responsibility seriously.

“As a green finance hub, Guernsey has a significant opportunity to accelerate the urgently needed transition to a zero carbon, more sustainable economy," said Wendy Dorey.

"This session will give directors a real insight into how to deliver climate reporting with substance, as well as how to better understand climate risk."

It was also argued that businesses should prepare to be flexible. If the Paris Agreement fails and the target is missed of limiting temperature rises to not more than 1.5 to 2 degrees, global regulations may become tighter, and the meeting was told that finance firms need to be prepared for this.