City leaders: Make climate change disclosure obligatory

NEW voluntary rules calling on firms to declare how they are affected by climate change need “real bite” by being made compulsory, Aviva chief Mark Wilson said today.

His comments came as Bank of England Governor Mark Carney and billionaire ex-New York mayor Michael Bloomberg launched the recommendations of a new task force set up by the Financial Stability Board last year.

The task force’s proposals — supported by some of the world’s biggest fund managers owning some $20 trillion (£15.8 trillion) in assets — aim to give more information to investors, lenders, and insurance underwriters. They include more detailed disclosure on elements such as board oversight of climate change risks, the effect of scenarios such as a 2-degree rise in global temperatures, and disclosure of the explicit targets used to measure the potential impact of the phenomenon.

Wilson, a member of the task force, said: “What gets measured, gets managed and what gets disclosed and published gets managed even better.

“We should give the disclosure real bite by making these recommend-ations mandatory, not voluntary. Only then will climate risk become integral to corporate governance.”

HSBC chief executive Stuart Gulliver added: “Less than a quarter of companies currently disclose their environmental impact. This makes it near impossible for analysts and investors to assess and compare how green these companies are.”

The task force has put its proposals out to consultation until February. Carney, who chairs the FSB and has been vocal on the impact of climate change, said: “The disclosure recommendations will give financial markets the information they need to manage risks, and seize opportunities, stemming from climate change.”

Bloomberg added: “Climate change is not only an environmental problem, but a business one as well. We need business leaders to join us.”