Sector introduction: Financial Services (FS)
Activities in the financial services sector include bank lending, investing (asset management and/or asset ownership) and insurance underwriting. The recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) highlight the important role of the financial sector as preparers of climate-related financial disclosures. Disclosure by this sector will enable investors, central banks, regulators/supervisors and other relevant stakeholders to better understand the concentrations of carbon-related assets in the financial sector and the financial system’s exposures to climate-related risks. The supplemental guidance provided by the Task Force focuses on the importance of considering the impacts of climate-related issues in the context of their financial activities such as lending, financial intermediary, investment and/or insurance underwriting activities. Organizations in the FS sector should respond to the CDP climate change questionnaire in the context of these financing activities, in addition to operational activities where appropriate. Along with new sector-specific questions and modifications to existing questions, specific guidance has been included to clarify the type of information banks, insurance companies and asset managers should consider in their response. The questionnaire shifts focus from Scope 1 and Scope 2 emissions to a more in-depth disclosure of Scope 3 category 15 “Investments” emissions.
CDP’s financial services questions focus on the following topics:
- Portfolio exposure to climate-related risks and opportunities;
- Climate-related issues in the organization’s policy framework;
- Exclusion policies;
- Engagement with clients and investee companies;
- Portfolio impact (Scope 3 category 15 “Investments” emissions or alternative exposure metrics);
- Portfolio alignment to a well below 2-degree world; and
- Climate-related considerations in employment-based retirement schemes.
This CDP sector aligns with the TCFD’s Financial Sector including Banks, Insurance Companies, Asset Owners and Asset Managers.
