Using Metrics and Targets in Climate Risk Disclosure

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1 Using Metrics and Targets in Climate Risk Disclosure K. Sadashiv

2 Metrics and targets form one of the core elements of recommended climate-related financial disclosures Page 2

3

4 Recommended disclosures i. Organizations should provide the key metrics used to measure and manage climate-related risks and opportunities. ii. Organization should quantify its Scope 1, Scope 2, and, if appropriate, Scope 3 emissions in line with GHG Protocol methodology. iii. iv. Organizations should describe their key climate-related targets such as those related to GHG emissions, water usage, energy usage, etc. organizations should provide a description of the methodologies used to calculate targets

5 The Task Force shared guidance for multiple sectors Page 5

6 Exploring the TCFD s Supplemental Guidance Page 6

7 Alignment of TCFD with existing reporting frameworks Page 7

8 Examples of metrics highlighted in the guidance for non-financial sector Energy Group Page 8

9 Examples of metrics highlighted in the guidance for non-financial sector Energy Group (cont d.) Page 9

10 Examples of metrics highlighted in the guidance for non-financial sector Transportation Group Page 10

11 Examples of metrics highlighted in the guidance for non-financial sector Materials, Buildings Group Page 11

12 Examples of metrics highlighted in the guidance for non-financial sector Agriculture, Food and Forestry Group Page 12

13 Supplemental guidance for the Financial Sector: Banks, Insurance companies, Asset Owners, and Asset Managers Supplemental guidance for Banks Page 13

14 Supplemental guidance for the Financial Sector: Banks, Insurance companies, Asset Owners, and Asset Managers Supplemental Supplemental guidance guidance for Insurance for Banks companies Page 14

15 Supplemental guidance for the Financial Sector: Banks, Insurance companies, Asset Owners, and Asset Managers Supplemental guidance for Asset Owners and Asset Managers Page 15

16 Supplemental guidance for the Financial Sector: Banks, Insurance companies, Asset Owners, and Asset Managers Supplemental guidance for Asset Owners and Asset Managers Page 16

17 Using Metrics and Targets in Climate Risk Disclosure An open discussion

18 Climate-related risks and opportunities Risks Policy and Legal Introduction of new policies such as carbon pricing; and risk of legal litigations Page 18

19 Climate-related risks and opportunities Risks Policy and Legal Introduction of new policies such as carbon pricing; and risk of legal litigations Technology Substitution of existing products and services with lower emissions options Page 19

20 Climate-related risks and opportunities Risks Policy and Legal Introduction of new policies such as carbon pricing; and risk of legal litigations Technology Substitution of existing products and services with lower emissions options Market Changing customer behavior Page 20

21 Climate-related risks and opportunities Risks Policy and Legal Introduction of new policies such as carbon pricing; and risk of legal litigations Reputation Shift in consumer preference and stigmatization of sector Technology Substitution of existing products and services with lower emissions options Market Changing customer behavior Page 21

22 Climate-related risks and opportunities Risks Policy and Legal Introduction of new policies such as carbon pricing; and risk of legal litigations Reputation Shift in consumer preference and stigmatization of sector Technology Substitution of existing products and services with lower emissions options Market Changing customer behavior Physical risks e.g. changes in precipitation patterns and extreme variability in weather patterns Page 22

23 Climate-related risks and opportunities Risks Opportunities Policy and Legal Introduction of new policies such as carbon pricing; and risk of legal litigations Reputation Shift in consumer preference and stigmatization of sector (transition risks) Technology Substitution of existing products and services with lower emissions options Physical risks e.g. changes in precipitation patterns and extreme variability in weather patterns Market Changing customer behavior Resource efficiency Reduced operating cost by improving energy efficiency Energy source Transition to low emission energy alternatives Products/services Innovate and develop low-emission products and services Markets Pro-actively seek opportunities in new markets or types of assets Resilience developing adaptive capacity to respond to climate change Page 23

24 Let s continue the conversation EY contact details: K. Sadashiv Managing Director (ASEAN) K.Sadashiv@sg.ey.com

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