So the Task Force has set out how firms can comply more effectively with existing disclosure obligations, by disclosing their climate-related financial risks and opportunities in their mainstream financial reports. In turn, this should ensure that consideration of climate-related financial risk, and opportunities, is properly embedded within, and subject to, firms’ corporate governance and risk management. Reporting on these risks cannot remain a niche activity. Decision-useful, actionable information  The disclosure recommendations deliver actionable information that will be useful in decision making. In particular, they focus on four areas critical to how real-world businesses operate: governance, strategy, risk management, and metrics. 4  See OECD (2015), “Climate Change Disclosure in G20 countries”. 4  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  4  The expectation is that qualitative and narrative disclosures will be complemented with quantitative ones as is the case for other disclosures made in financial statements. These are grouped into the categories of revenues, expenditures, assets and liabilities and capital. More specifically, all firms, from energy giants through to consumer goods producers, are encouraged to disclose their:  -  direct carbon emissions plus those from their energy consumption, in a consistent manner (i.e. scope 1 and 2), complemented by any emission reduction targets that companies may set for themselves. -  these can be supplemented, where judged appropriate, with upstream and downstream (i.e. scope 3) emissions  At the same time, the Task Force has set out sector-specific guidance for those sectors with the biggest carbon footprints and exposures.

A further important feature is the expectation that, where available, asset managers and owners will make disclosures of the aggregate greenhouse gas (GHG) emissions embedded in their investment portfolios. Achieving broad coverage will take time and obviously depends on adoption by issuers. Implementation  We are pleased that all Task Force member organisations, companies with market capitalisations of around $ trillion and financial institutions responsible for assets of $ trillion, have today announced their support for the disclosure recommendations. 5  With better disclosure, a market in the transition to a 2-degree world can be built. That market will expose the likely future cost of doing business, of paying for emissions, and of changing processes given both those charges and tighter regulation. And it will help smooth price adjustments as opinions change, rather than concentrating them in a short, dangerous space of time. Early disclosure rules allowed 20th-century financial markets to grow our economies by pricing risks more accurately. The spread of such standards internationally has helped lift more than a billion people out of poverty. Climate-related disclosures could be as transformative for 21st-century markets. 5  Bloomberg data and Bank calculations using market capitalisation as at 12 December 2016 and assets at end-2015. 6  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  6