February 24, 2020
TCFD-based reporting to become mandatory for PRI signatories in 2020

The strategy and governance indicators, as part of the PRI’s climate risk indicators, will become mandatory for all signatories to report on beginning 2020.

Giving support to the adoption of the Task Force recommendations on Climate-related Financial Disclosures (TCFD) is a high priority for the PRI, in their drive to provide a global framework for translating information about the climate into financial metrics.

As part of their programme that seeks to champion climate action in 2018, the PRI brought in TCFD-aligned indicators to its Reporting Framework. Even though the indicators were voluntary, more than 480 investors, representing US$42 trillion, chose to complete the indicators and submit responses. The climate indicators will be voluntary again in 2019.

Going forward from 2020, the PRI intends to make the climate indicators within SG 01 CC, SG 07 CC, and SG 13 CC mandatory to report, but voluntary to disclose. The remaining PRI climate risk indicators will remain voluntary, but with a possibility of becoming mandatory as good practice develops.

Signatories maintain the option of making their responses to this module either private or public. To support signatories as they develop a response to individual climate indicators, the PRI has consolidated guidance notes, investor case studies, webinars, and a matrix of climate reference scenarios. These are available on their resource page.

Climate-related risks and opportunities are set to grow in the near future. The fallout from 1.5°C of warming are now better understood, and as a result IPCC reports state that the world is on track to miss a manageable level of warming by some distance.

The PRI has expressed its concern that the longer Earth goes without a safe climate change trajectory, the greater the risks for investors of an abrupt policy response.

Fiona Reynolds, CEO of the PRI, said:

“It is increasingly important for investors to incorporate emerging mega risks such as climate change into their view of the future. TCFD provides the best available framework for systematically including climate-related risks and opportunities into investment strategy.

”The PRI is pleased to further incorporate TCFD into our Reporting Framework and continues to be a strong supporter of the task force’s recommendations.”

Source: UNPRI