Investors are increasingly demanding climate risk disclosure information from companies (for example, Task Force for Climate-Related Financial Disclosures (TCFD), shareholder resolutions), and proposed climate risk disclosure regulations are emerging. However, many investors and other stakeholders are unfamiliar with the science, and unsure how climate risk assessment and disclosure could and should be done. Over the last few years, EPRI has been actively assessing the science, addressing scientific gaps, and developing technical resources and guidance related to company climate-related risk assessment, climate scenarios, greenhouse gas goal (GHG) setting, and GHG accounting. This work has informed company reports and reporting, risk assessment methods and analysis, and recent activities by stakeholders such as the TCFD and Moody’s. This technical brief summarizes critical technical considerations derived from EPRI’s research relevant to a climate risk disclosure rulemaking. Climate risk disclosure rules will likely have a significant impact on how things proceed. However, they could promote or hinder accurate and reliable risk assessment, risk management, and properly informed decision-making—company and investor. The technical issues identified in this technical brief will be important to consider. Doing so will facilitate grounded risk assessment and management and make the resulting disclosure information more reliable, transparent, and comparable for investors.
Authors Steven Rose