Major players across chemical and electric utility sectors share TCFD implementation experience

Today, through collaboration with the World Business Council for Sustainable Development (WBCSD), eleven leading companies across chemical and electric utility sectors provide an in-depth look at climate-related financial disclosure in two landmark reports.

Geneva, Switzerland, 16 July 2019: As part of the Task Force on Climate-related Financial Disclosures (TCFD) Preparer Forums for Chemicals and for Electric Utilities, AkzoNobel, BASF, DSM, Solvay, Sumitomo Chemical and CLP, EDF, EDP, EnBW, Enel, Iberdrola share examples, learnings and reflections in: “Climate-related financial disclosure by chemical companies: implementing the TCFD recommendations” and “Disclosure in a time of transition: climate-related financial disclosure and the opportunity for electric utilities” respectively.

These reports, in conjunction with other TCFD Preparer Forums, aim to help companies implement the TCFD’s recommendations on climate-related financial disclosure.

“The TCFD is an important catalyst accelerating action on climate change and movement towards a financial system that properly values and rewards sustainable business practices, mobilizing capital to deliver a low-carbon world, realized through sectoral, regulatory and capital market collaboration and engagement.” said Peter Bakker, President and CEO at WBCSD.

The reports released today highlight how electric utility and chemical sectors are implementing the TCFD recommendations, responding to climate-related risks and opportunities. The reports showcase examples of effective disclosure practice across governance, strategy, risk management, metrics and targets.

Highlights include:

• Illustrative climate-related financial metrics for electric utilities and chemical companies
• The integration of climate-related risks and opportunities into enterprise risk management and governance processes
  • An illustrative scenario analysis approach for chemical companies with specific insights relevant to the sector
  • Strategic responses to climate change and the energy transition realized through innovation and portfolio development
  • Perspectives and insights from users including equity and credit analysts

Building on the efforts of the TCFD Oil & Gas, Electric Utilities and Chemicals Preparer Forums, WBCSD is now initiating TCFD Preparer Forums for companies involved in construction & building materials: ArcelorMittal, CRH, LafargeHolcim, Lendlease, Saint-Gobain and Skanska and food, agriculture & forest products: Mondi, Nestlé, Olam, Unilever, Stora Enso and Syngenta.

Statements of support from TCFD Preparer Forum members:

“The Preparer Forum provided valuable insights into the status, opportunities and challenges of the implementation of the TCFD recommendations. The findings shared through the report can support companies on their way towards TCFD-related reporting,” said Dr. Hans-Ulrich Engel, Vice Chairman of the Board of Executive Directors and Chief Financial Officer, BASF SE.

“CLP has long been a staunch supporter of climate action. We were one of the first companies to publish a climate vision back in 2007 and remain focused on progressively decarbonizing our portfolio until 2050. We support the TCFD framework as it enables companies like us to create transparency in our reporting and get all our stakeholders including investors aligned of our strategic change over time. This would help the industry as a whole move forward for a low carbon future,” said Richard Lancaster, Chief Executive Officer, CLP Holdings Limited.

“The financial sector is facing the critical responsibility to make the investment decisions that will help deliver and live in a +1.5C world. As a company whose identity and strategy is driven by this low carbon transition envisioned in the Paris Agreement, it is of vital importance to EDF that financial players access consistent, comparable and reliable information. This has been the ambition of the TCFD from its inception. This collective initiative coordinated by the WBCSD is a significant step on the path to implementing its recommendations in our sector. This is certainly key for the climate but also to drive a fair and mutually beneficial economic transition,” said Xavier Girre, Senior Executive Vice-President, Group Finance, EDF.

“EDP is, and has been for many years, totally committed to a decarbonization strategy which is an integral part of our vision for the sector. We welcome this report as an important step towards transparency and comparability between companies regarding their climate strategy. It gives investors, and other stakeholders, a better understanding of the impact of climate change on the companies, not only its risks but also the huge opportunities ahead of us in order to achieve the Paris Agreement,” said Miguel Stilwell de Andrade, Chief Financial Officer, EDP.

“Climate change is undisputed as one of the most significant risks for future generations. Companies are confronted with the challenge of whether they are well positioned for the future and to what extent their business models are future-proof. It is therefore in their interest to identify climate related risks as well as opportunities in time. The TCFD recommendations promote to a high degree transparency about how climate change is managed by a company`s supervisory and executive board. This is not only in the interest of investors, but also in the interest of all stakeholders,” said Thomas Kusterer, Chief Financial Officer, EnBW AG.

“Our industry shall continue to work towards a decarbonized society by means of an increasing electrification of all sectors, a larger contribution from renewable generation, the use of storage systems as well as the digitalization of the grids and the innovative services to the customers: all these actions make the energy transition happen. This transformation is complex and to make sure we move forward at full speed, the business environment must clearly explain these necessary measures to investors and stakeholders to get them on board. We welcome the TCFD’s work to accelerate this change,” said Francesco Starace, Chief Executive Officer & General Manager, Enel.

“A decarbonized and more efficient energy model is critical if the Paris targets are to be achieved. The power sector is uniquely placed to make the most of the opportunities arising from the energy transition in which renewables, smart grids and the wider electrification of the economy will be key. For Iberdrola, the TCFD framework is a valuable instrument to showcase how we integrate climate change at all levels of the organization as well as align with a decarbonization pathway that mitigates risks and promotes opportunities. The TCFD’s work also provides a helpful common language between companies and users of the climate-related information,” said Carlos Sallé, Senior Vice President Energy Policies and Climate Change, Iberdrola.

“DSM has for many years been very proactive in addressing climate change, amongst other by introducing an internal carbon price over 3 years ago and setting a Science Based GHG emission reduction target. But clear communication on this topic with the capital markets is also key and DSM was therefore among the first companies to commit to implementing the TCFD recommendations. We were pleased to be given the opportunity to join the WBCSD Preparer Forum as this cannot be done well in isolation and we support the report that has resulted from this collaboration. We hope the report and the Forum’s focus on scenario analysis will serve as inspiration to our industry to identify and manage climate risks and opportunities,” said Geraldine Matchett, Chief Financial Officer, Royal DSM.

“At Solvay, we chose to commit to use the TCFD guidelines in June 2017, even though we didn’t have all the answers at the time. This Chemical Preparer Forum makes it very practical for all chemical companies how to be TCFD compliant. I encourage all chemical companies to take advantage of the work performed, and companies from other sectors to prepare similar guidelines. My hope is that it drives financial markets to make better use of the information we disclose to reward sustainable performance,” said Karim Hajjar, Chief Financial Officer, Solvay.

“Climate Change is one of the most important challenges that our society is facing. The Sumitomo Chemical Group strives to actively provide solutions for climate mitigation and adaptation. We believe that the TCFD recommendations and the sector guidance report will further encourage the chemical industry’s initiatives to realize the virtuous circle of the environment and economic growth through effective disclosure about climate-related risks and opportunities,” said Hiroshi Niinuma, Director and Senior Managing Executive Officer, Sumitomo Chemical Company Limited.