From ESG Data to Decisions and Disclosures

Mastering Climate Risk Management

As more climate-related regulations are introduced globally, there is growing awareness among corporates that assessing and forecasting their future climate exposures is critical. In this in-depth interview, two experts from FIS and PwC discuss the latest compliance issues and how their firm’s respective work has resulted in an innovative solution to help firms model and assess their risk.

Eleanor Hill, TMI (EH): What are the most impactful financial compliance and disclosure regulations around climate risk management today, in your view? What do TMI readers need to be aware of?

Martin Sarjeant, FIS (MS): The regulatory environment has evolved significantly over the past 10 to 15 years from being fairly uncoordinated across governments and regulators globally to an increasingly concerted approach. The International Sustainability Standards Board [ISSB], which was formed as recently as 2021 and issued its inaugural standards just under a year ago, is certainly starting to help with that critical objective, most notably regarding corporate reporting.

The current key requirement, though, is for sustainability regulations to be adopted and promulgated across different territories. Last year we saw the EU’s Corporate Sustainability Reporting Directive [CSRD] come into force. The UK has pushed ahead with its corporate reporting measures under the Task Force on Climate-related Financial Disclosures [TCFD] initiative. In the US, the Securities and Exchange Commission [SEC] finalised climate change disclosure rules in March. Government and regulators across many other countries, including Canada and Australia, are also now active on this front.

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