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The SASB and CDSB Outline TCFD Readiness

Standards setters come together to support recommendations from the Task Force on Climate-related Financial Disclosures

Read the full paper here

18 September 2017

The Sustainability Accounting Standards Board (SASB) and the Climate Disclosure Standards Board (CDSB) today released a paper outlining how the two organizations are aligning with the G20 Task Force on Climate-related Financial Disclosures' (TCFD) recommendations. The paper, "Converging on Climate Risk: CDSB, the SASB, and the TCFD," stands as a statement of agreement by the SASB and CDSB to facilitate the disclosure of material and decision-useful climate-related information following the TCFD recommendations.

The tangible impacts of climate change on society, such as recent extreme weather events in the Caribbean, South Asia, and the U.S., extend to material impacts on companies regionally and around the world. Lack of transparency around corporate exposure to climate-related risks, however, makes it challenging for investors to accurately assess this risk.

To promote healthier financial markets and the transition to a low-carbon economy, the TCFD developed a set of recommendations that companies can use for the voluntary disclosure of information about climate-related financial risks and opportunities to keep investors, lenders, and insurance underwriters better informed. As standard-setting organizations, the SASB and CDSB are leveraging their own climate-related expertise to facilitate high-quality implementation of the TCFD recommendations.

"As the impacts of sustainability-related business risks on business and society - including those associated with climate change - have risen in prominence, a variety of reporting approaches have proliferated, creating confusion in the market over which one to use," said Jean Rogers, founder of the SASB and chair of the SASB Standards Board. "Alignment between the SASB, CDSB, and TCFD provides streamlined guidance for issuers, more useful information for investors and other decision makers, and increased stability and resilience for the broader capital markets."

CDSB, the SASB, and the TCFD share ample philosophical and technical common ground, which naturally aligns their work. For example, all three organizations focus on climate risks and opportunities that are financially material and promote disclosure of material information in mainstream financial filings.

The SASB and CDSB paper outlines how both organizations will continue to improve that alignment even further, and provides companies with the practical "how to" needed to begin delivering on the TCFD recommendations via complementary TCFD-ready frameworks that enable consistent, high-quality implementation.

"We have been working with the SASB for years through our Technical Working Group and, most recently, through our Board, and we are happy to strengthen our mutual agreement to support the work of the TCFD with this paper," said Richard Samans, Chairman, CDSB. "As we work together to improve global climate and environmental reporting practices, we hope to provide companies with more comprehensive guidance on how to move the climate conversation from the sustainability room to the finance and governance level. We thank the SASB for the great work they have done on climate risk and mainstreaming climate disclosure and we look forward to collaborating further in the future."

For more information and for technical details of this effort, please visit this link.

About the SASB
Established in 2011, the Sustainability Accounting Standards Board (SASB) is an independent standards-setting organization dedicated to enhancing the efficiency of the capital markets by fostering high-quality disclosure of material sustainability information that meets investor needs. The SASB develops and maintains sustainability accounting standards-for 79 industries in 11 sectors-that help public corporations disclose material information to investors in annual SEC filings. The SASB's rigorous process, that includes evidence-based research and broad, balanced stakeholder participation, yields standards that are valued by investors and corporations alike because they are cost-effective and decision-useful. The SASB standards board comprises nine members with diverse backgrounds and expertise encompassing capital markets regulation and policy; investing; financial accounting; securities law; corporate finance, and; sustainability. For more information, visit www.sasb.org and follow us @SASB.

About CDSB
The Climate Disclosure Standards Board (CDSB) is an international consortium of nine business and environmental NGOs. We are committed to advancing and aligning the global mainstream corporate reporting model to equate natural capital with financial capital. We do this by offering companies a framework for reporting environmental information with the same rigor as financial information. In turn this helps them to provide investors with decision-useful environmental information via the mainstream corporate report, enhancing the efficient allocation of capital. Regulators also benefit from compliance-ready materials. Recognizing that it is equally essential to have information about both natural capital and financial capital for an understanding of corporate performance, our work builds trust and transparency needed to foster resilient capital markets. Collectively, we aim to contribute to more sustainable economic, social and environmental systems. For more information, visit www.cdsb.net and follow us @CDSBGlobal.