How finnCap can help businesses respond to climate risk disclosures

As we mark World Environment Day this Sunday, the work of the International Financial Reporting Standards Foundation in making climate disclosure more meaningful is attracting attention on the global stage. Pressure is growing for better disclosure standards and in the UK, climate-related TCFD (Task Force on Climate-Related Financial Disclosure) financial disclosure regulations have now come into force. Around 1,300 of the largest UK-registered companies and financial institutions have been impacted by these regulations and this number is expected to include all businesses by 2025.

The focus for businesses to reach Net Zero carbon emissions has grown from an emerging trend to a mainstream requirement – climate change is here, and businesses must act now. Just this month, more than 30 UK companies were issued with fines of more than £27 million by the Environment Agency as part of efforts to reduce greenhouse emissions. The message is clear: businesses must ensure they are compliant with these schemes and are playing their part in tackling climate change.

The introduction of mandatory disclosures reflects the government’s commitment to increase the quantity and quality of climate-related reporting across the UK business community. Every business’s climate risk is different and as many businesses are now discovering, climate risk reporting can be complex and difficult to navigate. Clearly, there is a huge amount for businesses to do – and quickly.

CDP’s platform provides the mechanism for reporting in line with the TCFD recommendations. It allows companies to submit climate change-related data to a nonprofit environmental disclosure platform, demonstrating their plans to transition to a low-carbon economy. Businesses which disclose through CDP are doing so in line with the TCFD recommendations, in a comparable and consistent way that is relevant and accessible to the global economy.

The pathway to effective and robust climate target setting and risk disclosure offers rich opportunities. It’s not simply a box-ticking exercise or reporting mechanism but rather an opportunity to protect and create value, even resetting business strategy in the context of climate change and the transition to net zero. At finnCap, we call this Sustainable Advantage.

We recently announced our acquisition of a 50% interest in Net Zero and sustainability consultancy, Energise, to help support our clients in meeting their climate change challenge. It’s about equipping our clients with the specialist, bespoke support they need on the journey towards Net Zero carbon, whatever that journey might look like. When it comes to responding to TCFD, CDP or creating carbon reduction strategies, Energise can provide a full response service and support on a scoring gap analysis.

Growth companies in particular need support on their sustainability journey and to get things started finnCap has developed an easy ESG scorecard to help identify gaps and simplify the ESG reporting process. To help build the business of tomorrow, it’s imperative we tackle the pressing challenges of today.