Guernsey, the global specialist financial services centre, has welcomed the move from the United Nations' Principles of Responsible Investment to introduce mandatory reporting on some climate risk indicators by 2020.
The new reporting requirements support the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and is a high priority for the PRI. They provide a global framework for translating information about climate into financial metrics. Strategy and governance indicators reporting will be mandatory.
Dr Andy Sloan, deputy chief executive, strategy, at Guernsey Finance, said that the development was in line with standards set by the world-first innovation of the Guernsey Green Fund, launched last year.
"We welcome this move by the UN PRI that should help drive momentum towards greater adoption of green and sustainable finance," he said.
"Our approach in developing the Guernsey Green Fund was in anticipation of a world of increased demand for verifiable green product, driven by policymaker requirements. This move by the UN PRI validates our approach."
Guernsey is positioned at the forefront of the development of green and sustainable finance as a member of the UN's International Network of Financial Centres for Sustainability (FC4S).
Last July it launched the Guernsey Green Fund, an official verification of a fund's green and sustainable credentials.
Guernsey Green Finance is the organisation driving the strategy and engagement of green and sustainable finance in the island.
There are more than 2,000 signatories worldwide to the PRI, including more than 1,500 investment managers.Climate-related risks and opportunities are set to grow in the coming years. The impacts of 1.5C of warming are now better understood with the Intergovernmental Panel on Climate Change reporting that the world is set to miss a manageable level of warming by a wide margin.
The PRI is concerned that the longer the world goes without a safe trajectory on climate change, the greater the risks for investors of an abrupt policy response,
Commenting on this announcement, Fiona Reynolds, CEO of the PRI said: "It is increasingly important for investors to incorporate emerging mega risks such as climate change into their view of the future. TCFD provides the best available framework for systematically including climate-related risks and opportunities into investment strategy.
"The PRI is pleased to further incorporate TCFD into our Reporting Framework and continues to be a strong supporter of the task force's recommendations."
Our approach in developing the Guernsey Green Fund was in anticipation of a world of increased demand for verifiable green product, driven by policymaker requirements. This move by the UN PRI validates our approach"