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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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Events calendar

  • The Growth Mindset for Actuaries

    13 October 2021 - 8 December 2021

    Fully booked.

    This practical course is aimed at actuaries at any stage of their career who want to develop their own growth mindset and apply it to their work setting and personal or professional lifelong learning. The content of the course builds on the lecture given by Dr Helen Wright on Growth Mindset as part of the President’s 2021 Lecture series, and will be delivered over a period of 2 months, from mid-October to early December.

  • Spaces available

    The importance of biodiversity for finance, business and policy is being increasingly recognised. While many studies highlight the overall economic impact that biodiversity loss could have, it is much more difficult to quantify and understand the particular impact that is may have on individual businesses or communities. The management and measurement of these risks is a field where actuaries are well placed to contribute.

  • Spaces available

    The climate crisis and the degradation of our planet will affect societies everywhere. How we address these threats will require solutions that transcend borders. As a global profession, the actuarial community is well-placed to consider and propose effective risk management solutions to help manage the climate crisis.

  • GIRO 2021 Webinar Series

    Online
    8 November 2021 - 19 November 2021
    Spaces available

    Join leading experts to discuss key issues, emerging ideas and new research across the general insurance sector.

  • Spaces available

    This is a free webinar with an expert panel providing their views on the ongoing IFoA consultation for proposals regarding changes to the regulatory framework on climate change and sustainability.

    The regulatory consultation sets out, for feedback some proposed approaches that the IFoA are considering in relation to charter commitments under the UK’s Green Finance Education Charter (GFEC) and the regulatory framework, including the Actuaries’ Code.

  • Life 2021 Webinar Series

    Online
    22 November 2021 - 26 November 2021
    Spaces available

    Join leading experts to discuss key issues, emerging ideas, and new research across the Life insurance sector.

  • Spaces available

    The role of actuaries within the health sector varies considerably from one country to another, due to differences in the local evolution of health systems and the funding models for health services. 

  • Spaces available

    Content will be aimed at all actuaries looking to understand the issues surrounding mental health in insurance and in particular those looking to ensure products and processes widen access for, and are most useful to, those experiencing periods of poor mental health.
     

  • The Many Faces of Bias

    2 December 2021

    Spaces available

    This webinar looks at the many types of biases, both conscious and unconscious and the impacts they can have in the workplace.  Raising our own awareness and understanding of the issues can help us avoid the pitfalls of unconscious bias in particular.  We’ve all heard the phrase ‘office banter’ but are we sure that’s how those on the receiving end perceive it and is it ok to go along with it?