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The Paris Agreement and the Task Force on Climate-related Financial Disclosures

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              The TCFD Recommendations were published in June 2017.

Although some climate scientists might disagree, it can be said that work on climate change came of age in 2015 at COP21. Held in Paris that year, the United Nations Framework Convention on Climate Change (UNFCCC) annual event, which progresses the UN’s work on climate change, led to the Paris Agreement. This Agreement came into force during 2016 when the required hurdle of formal country commitments was reached.

The Paris Agreement is a comprehensive global commitment to tackle climate change. The Conference of the Parties (COP) process is part of the UNFCCC governance process. COP26, due to have been held in Glasgow in late 2020, was postponed because of the Covid-19 crisis and will now be held from 1–12 November 2021.

The Paris Agreement’s central aim is to strengthen the global response to the threat of climate change by keeping the global temperature rise this century to well below 2 degrees celsius above pre-industrial levels, and to pursue efforts to limit the temperature increase even further to 1.5 degrees celsius. Additionally, the agreement aims to strengthen the ability of countries to deal with the impacts of climate change. The temperature rise is already above 1 degree.

These goals are covered in Article 2.1 (a) and (b) of the Agreement while Article 2.1 (c) states the supportive: Making finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development.

Limiting temperature rise to achieve the Paris Agreement’s central aim is referred to as one possible future ‘scenario’. Other scenarios with higher temperatures are also possible if global efforts are not successful. The different ways that these end-century scenarios might evolve are referred to as ‘pathways’. Different pathways might be driven by transition from carbon-based to carbon-free energy at different pace (or no transition), linked to government policy actions at different times and resulting in different impacts on financial markets.

At the Paris COP21, the Financial Stability Board (FSB) launched the Task Force on Climate-related Financial Disclosures (TCFD). TCFD’s goal was to develop voluntary, consistent climate-related financial risk disclosures. The TCFD Recommendations were published in June 2017.

Since that time, the recommendations have been embraced globally by companies and other financial institutions. There is a general move to make them mandatory in some countries and in some sectors, for example in the UK.

In November 2020 the UK government announced that the UK is heading towards mandatory disclosure within five years: TCFD taskforce interim report and roadmap. The TCFD Knowledge Hub offers an extensive selection of resources.

2015 was also the year that Transforming our world: the 2030 Agenda for Sustainable Development with its 17 Sustainable Development Goals (SDGs) was adopted by all UN member states. The agenda is a universal call to action to end poverty, protect the planet and improve the lives and prospects of everyone, everywhere. While SDG13 is specifically about climate action, the SDGs are deliberately interdependent and many of the other goals are also relevant to climate change, for example SDG7 Affordable and Clean Energy. The SDGs are a mechanism with which to hold governments to account for progress on the agenda.

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  • Spaces available

    Climate-Related Risk - This free to view webinar on Climate-Related Risk is the first in a series focusing on some of the ‘Hotspots’ identified in the JFAR Risk Perspective bringing the Risk Perspective to life with practical illustrations and insights from subject experts from the IFoA and other Regulators

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    Recent decades have seen institutions, such as employers and financial services, give people more choice and flexibility, but these freedoms have come with more responsibilities. Individuals are now responsible for managing more of their own financial risks, from ensuring they put enough money into their pension to securing affordable protection to be financially resilient.

  • Actuarial Innovation in the COVID-19 era

    This event is online. 
    26 April 2021 - 7 May 2021
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    Join us for this brand new IFoA webinar weries comprising of a fortnight of webinars, panel sessions and a hackathon, that showcase the range of ways in which the actuarial profession has added value, in the public interest, to the understanding and management of the current and future pandemics through insight and learning.

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    This event is also repeated on Tuesday 27 April, 09.00-10.30. Please click here to register your place if Tuesday is your preferred choice.

    Actuaries have a lot to offer biodiversity management over the next decade as the world develops more depth to its response to this global challenge. This sessional offers an opportunity to learn about this emergent risk, to contribute to our thinking as a profession and help us develop the next steps forward.

  • Europe Town Hall

    28 April 2021

    Spaces available

    IFoA Immediate Past President John Taylor would like to invite you to the Institute and Faculty of Actuaries’ (IFoA) virtual Europe Town Hall, hosted by John Taylor with IFoA Council Members Alan Rae, Jennifer Hartley, Maribel Vasquez Flores and IFoA Chief Executive, Stephen Mann.

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    Sessional Meeting - Free to viewMis-estimation risk is a key element of demographic risk, and past work has focused on mis-estimation risk on a run-off basis.  However, this does not meet the requirements of regulatory regimes like Solvency II, which demands that capital requirements are set through the prism of a finite horizon like one year.  This paper presents a value-at-risk approach to mis-estimation risk suitable for Solvency II work

  • Finance & Investment Virtual Conference 2021

    Available to watch globally in May.
    10-12 May 2021
    Spaces available

    This year's Finance and Investment Virtual Conference takes on the timely theme of ‘resilience’, something we have all learnt a lot more about in the last year! Our diverse range of talks will explore the theme of resilience in a variety of ways including in building robust investment portfolios, in the incorporation of ESG factors, in govern

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    This talk will explore the potential benefits that wearable tech can bring to health & protection insurers and their customers. The traditional approach of integrating wearables into insurance has largely focused on measuring steps and using rewards-based incentive programs to encourage more activity.

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    Join us for this talk with Professor Sir Adrian Smith as part of the 'Dr Patrick Poon Presidential Speaker Series'. Professor Smith joined The Alan Turing Institute as Institute Director and Chief Executive in September 2018. In November 2020, he became President of the Royal Society, in addition to his leadership of the Turing. He is also a member of the government's AI Council, which helps boost AI growth in the UK and promote its adoption and ethical use in businesses and organisations across the country. He received a knighthood in the 2011 New Year Honours list.


  • CILA 2021

    Available to watch globally in May.
    19-21 May 2021
    Spaces available

    We continue to live in a world of global uncertainty. Survival depends on our ability to simultaneously navigate through the diverse root-causes, ranging from: the consequences of Climate Change; on-going financial consequences of the COVID pandemic; or self-imposed changes in regulatory requirements and accounting standards.

  • Pensions Conference 2021

    Online webinar series
    16-22 June 2021
    Spaces available

    Welcome to the programme for our 2nd Virtual Pensions Conference. This year's conference features 11 webinars offering members and non-members the opportunity to get up to date content from leading experts in the pension industry. There will also be opportunity to ask questions and contribute to the discussion.