IAIS and SIF publish Issues Paper on the Implementation of the Recommendations of the TCFD
IAIS calls for action on strengthening climate related financial disclosures
The International Association of Insurance Supervisors (IAIS) and Sustainable Insurance Forum (SIF) published an Issues Paper on the Implementation of the Recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).
A vast majority of insurers expect climate change to affect their business; however, while the largest globally active insurers have made progress on implementation of TCFD-aligned disclosures, implementation is low across the sector as a whole.
Recognising the diversity of supervisory frameworks across jurisdictions, the Paper identifies a number of areas where supervisors can encourage strengthened disclosures through the
application of existing supervisory tools.
To support supervisors’ efforts to assess the impact of climate-related risks to the insurance sector and help resolve challenges, including around public disclosure, the IAIS and SIF will do further work on climate-related risk in the insurance sector over the course of 2020, focussing specifically on topics such as enterprise risk management, corporate governance, investment and disclosure.
Vicky Saporta, IAIS Executive Committee Chair: In tackling climate change, there is a need for decisive action in the face of uncertainty. For this, it is important to have reliable, consistent and comparable information. This Paper will provide a valuable resource for supervisors taking action to enhance disclosures on climate-related financial risks.
Geoff Summerhayes, IAIS Sustainability Champion, Chair of the Sustainable Insurance Forum: Given the variability of practice, disclosure may need to transition to mandatory regimes over time in order for climate-related risks to be effectively priced within the financial system and real economy.
Mary Schapiro, Special Advisor to the Chair, Task Force on Climate-related Financial Disclosures: We welcome the IAIS’ support for wider adoption of the TCFD framework. Disclosure of climate-related financial information is important for insurers not only to manage and price climate risks appropriately, but to take appropriate investment and underwriting decisions. The TCFD recommendations provide a consistent framework for firms, including insurers, to set out their climate-related financial risks and opportunities. Insurers should also encourage the firms they invest in or for which they provide underwriting cover to make TCFD
The Issues Paper can be found here.