Climate changes your business. Wim Bartels 28 February, 2018

Transcription

1 Climate changes your business. Wim Bartels 28 February, 2018

2 2018 KPMG N.V., registered with the trade register in the Netherlands under number , is a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG 2

3 Climate-related financial risks and opportunities Climate-related reporting today: Focus on business models carbon footprint. Business Business impact on climate change Impact of climate change on the business model Climate change Reporting promoted by Task Force on Climate-related Financial Disclosures (TCFD): Focus on financial impact of climate change on business models KPMG N.V., registered with the trade register in the Netherlands under number , is a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG 3

4 The impact of climate change (1) 4

5 The impact of climate change (2) 5

6 The impact of climate change (3) 6

7 The impact of climate change (4) 7

8 The impact of climate change (5) 8

9 The tragedy of the horizons 9

10 The Task force on Climate-related Financial Disclosures G20 Finance Ministers and Central Bank Governors asked the Financial Stability Board (FSB) to review how the financial sector can take account of climate-related issues. The FSB established the Task Force on Climaterelated Financial Disclosures (TCFD) to develop recommendations for more effective climaterelated disclosures that: could promote more informed investment, credit, and insurance underwriting decisions and, in turn, would enable stakeholders to understand better the concentrations of carbon-related assets in the financial sector and the financial system s exposures to climate-related risks. Industry Led and Geographically Diverse Task Force The Task Force s 31 international members, led by Michael Bloomberg, include providers of capital, insurers, large non-financial companies, accounting and consulting firms, and credit rating agencies

11 The Task force on Climate-related Financial Disclosures 11 11

12 Climate risks: in real estate Fossil fuel energy Carbon emissions Extreme weather Drought Water availability Damage to property Migration Energy transition Carbon pricing Profit & Loss Cash flow Asset value 12 12

13 The key recommendations 13 13

14 Supplemental guidance for certain sectors For the financial sector and certain non-financial sectors and industries, the Task Force provides supplemental guidance to highlight important sector-specific considerations. Financial Sector Banks Insurance Companies Asset Owners Asset Managers Nonfinancial sectors and Industry Groupings Energy Oil and Gas Coal and Consumable Fuels Electric Utilities Renewable Electricity Transportation Air Freight and Logistics Airlines Marine Road and Rail Automobiles Transportation Infrastructure Materials and Buildings Chemicals Construction Materials Metals and Mining Capital Goods Real Estate Development and Management Agriculture, Food and Forest Products Paper and Forest Products Beverages Food Products, including Agriculture Products and Packaged Foods and Meats Non-Food Agriculture 14

15 Challenges reporting climate-related issues Some companies have limited knowledge of sustainability, which inhibits the capture of emerging sustainability risks. Only 29% of the material issues included in sustainability reports are also included as risks in a company s financial filings. 1 Many of the reasons identified for differences between risks included in sustainability reports and financial filings can be addressed through better coordination across functions and knowledge sharing. Sustainability risks are often more challenging to quantify than traditional risks. The sustainability risk outlook timeline is longer than that of traditional risks. Existing risk management frameworks may not provide enough guidance to companies to manage sustainability risks. There is often a lack of collaboration between sustainability and enterprise risk management functions. Financial filings use different language than sustainability reports. 1. World Business Council for Sustainable Development. Sustainability and enterprise risk management: The first step towards integration. January 18,

16 Thank you Wim Bartels KPMG Advisory Partner, Sustainability Tel: bartels.wim@kpmg.nl