Why? It provides information to shareholders, clients and counterparties on the volume of activities specifically contributing to climate objectives. International development finance institutions are already asked to report on this as part of North-South climate finance reporting. As a growing number of countries and regions are developing taxonomies for climate-related activities, mandatory reporting for all financial institutions could accelerate in the coming years.
How? Institutions may publicly disclose the results of the tracking of the volume or share of climate-related activities and investments. Institutions may choose to report results of this measurement individually or within groups or initiatives of financial institutions – such as the Multilateral Development Banks (MDBs) or the International Development Finance Club (IDFC). In the case of mandatory reporting, a specific taxonomy may be required as a reference and specific requirements may be asked by the regulator.