Why? It provides information to stakeholders, clients and counterparties on the consistency and contribution of the institution’s activities to low-carbon climate-resilient scenarios. Disclosure on alignment may become increasingly expected as many financial institutions have announced voluntary commitments to align with climate goals with an expectation that they will publicly disclose progress. Furthermore, regulators may request disclosure on this issue and the TCFD has begun work on this issue.
How? Financial institutions may publicly disclose the results of their alignment assessment with international climate goals. They may choose to report these results individually as part of their individual annual reports and/or within groups or initiatives of financial institutions. In the case of mandatory reporting, specific requirements may be asked by the regulator. Considering the heterogeneity of methodologies and their level of maturity, jurisdictions do not require institution to rely on specific methodologies yet.