Important Updates from COP27's Finance Day

Finance Day was momentous at COP26 in Glasgow last year, with high-profile investor coalitions launched and bold commitments from the likes of the UK to transform finance sectors into green drivers of the net-zero transition.

Yesterday’s COP27 Finance Day saw global carbon markets, African commodity drives and the world’s most-detailed emissions inventory taking centre stage. While the launches and announcements may not seem as big in scale as Glasgow’s finance-themed onset of announcements, it did offer us important updates to coalition drives, a huge new emissions report, and key carbon market formations steered by both major economies and developing states.

Among key deliveries, the Treasury Minister James Cartlidge welcomed the next step towards companies demonstrating how they will align their business with net zero. The publication of the UK Transition Plan Taskforce’s Disclosure Framework and Implementation Guidance for consultation sets out how companies can show consumers, investors and the public what steps they are taking to align their business with net zero. These documents set out clear recommendations for how firms can prepare and disclose their plans in the short-medium term.

The government launched the Transition Plan Taskforce (TPT) in May to create the gold standard for transition plans. This comes after the Government committed at COP26 to move towards mandatory transition plan disclosures, with the FCA already introducing initial disclosure rules for transition plans from January.

The Government has taken world-leading action to green the global financial system, with London having ranked first in the world for a third consecutive year as a leading hub globally for sustainable finance, according to the Global Green Finance Index 10.

On top of this, the UK has raised over £20 billion from green gilts and NS&I’s Green Savings Bonds since September 2021 to finance projects in the UK and across the world to tackle climate change and other environmental challenges. Transactions in May and September contributed over £4 billion towards this.

Financial resources and sound investments are needed to address climate change, reduce emissions, promote adaptation to impacts and build resilience. The benefits from these investments dramatically outweigh any upfront costs.

There has been a surge in interest from companies and some major investors in adopting sustainable business plans compatible with a 1.5°C future, as decision-makers recognize the vast growth opportunities in the global transition to a decarbonized economy by 2050. 

Identifying and managing climate risks and opportunities remains a crucial undertaking to advance low-carbon, climate-resilient growth. Climate risk disclosure and reporting frameworks, such as the Task Force on Climate-Related Financial Disclosures (TCFD), can allow financial actors and companies to address climate risks and benefit from transitioning to low-carbon, climate-resilient economies.

With Scope 3 emissions set to be included as part of required company disclosures, Rio ESG can help build your disclosure. Rio ESG can support on all aspects of TCFD disclosure; engaging with the workforce, establishing the key climate-related financial risks and opportunities, TCFD reports.

What is TCFD? 

ESG software typically allows organisations to keep track of information for sustainability reporting purposes, such as mandatory GHG emission reporting or governance documents, including policies and staff information. A software which helps organisations to report against common ESG frameworks such as TCFD is essential in accelerating progress against key targets, legislation and trajectories such as Net Zero Carbon.

Dedicated sustainability software like Rio can streamline the process of data collection, analysis and reporting based on TCFD and other popular frameworks.

 Though it’s one of the most popular, TCFD isn’t the only ESG reporting framework, and it’s often combined with other frameworks.

Use our in-depth ESG Framework Guide to find the best reporting framework for your organisation and talk to one of our team members to discuss how Rio can assist with your TCFD disclosure needs.