With ferocious typhoons, recordbreaking heatwaves and major landslides, Japan is already at the sharp end of a new pattern of devastating extreme weather events. 1  Full list of current TCFD supporters available at: https://www.fsb-tcfd.org/tcfd-supporters/. Climate.nasa.gov. Available at: https://climate.nasa.gov/vital-signs/sea-level/. 3 Source: Climate Action Tracker. Data available at: https://climateactiontracker.org/global/temperatures/. 2  2  All speeches are available online at www.bankofengland.co.uk/news/speeches  2  The transition to a low carbon economy will also bring its own risks and opportunities. Changes in climate policies, new technologies and growing physical risks will prompt reassessments of the values of virtually every financial asset. Firms that align their business models to the transition to a net zero world will be rewarded handsomely. Those that fail to adapt will cease to exist. The longer that meaningful adjustment is delayed, the greater the disruption will be. Like virtually everything else in the response to climate change, the development of a more sustainable financial system is not moving fast enough for the world to reach net zero. To bring climate risks and resilience into the heart of financial decision making, climate disclosure must become comprehensive climate risk management must be transformed, and investing for a two degree world must go mainstream. Today, I want to focus on how the TCFD can help achieve these goals. TCFD: progress to date Only two years after the final TCFD recommendations were published, support has sky-rocketed and conversations about climate-related financial risks have moved from the fringes to the forefront. The demand for TCFD disclosure is now enormous.

Current supporters control balance sheets totalling $ trillion and include the world’s top banks, asset managers, pension funds, insurers, credit rating agencies, accounting firms and shareholder advisory services.4 The supply of disclosure is responding, with four fifths of the top 1100 G20 companies now disclosing climate-related financial risks in line with some of the TCFD recommendations.5 On every recommended metric in TCFD, disclosures have been steadily increasing, rising from an average of 2.8 to 3.6 over the past three years. Three quarters of investors are now using TCFD disclosures when investing and the same percentage report a marked improvement in the quality of climate disclosures.6 Japanese TCFD supporters increased from 9 to 199 in just over a year and now have a market cap of almost $ trillion. Japanese government support through the Implementation Study Group and the TCFD Consortium has catalysed action and created a blueprint for other countries in “how-to-TCFD”. 4  Full list of current TCFD supporters available at: https://www.fsb-tcfd.org/tcfd-supporters/. The TCFD’s June 2019 Status Report assessed, using artificial intelligence, 1100 companies reports over three years from 2016 to 2018 inclusive. Full report available at: https://www.fsb-tcfd.org/wp-content/uploads/2019/06/2019-TCFD-Status-Report-FINAL053119.pdf. 6 TCFD Status Report (2019) 5  3  All speeches are available online at www.bankofengland.co.uk/news/speeches  3  Chart 2: Changes in TCFD disclosures by recommendation 2016 – 2018  As the volume of disclosures has increased, so has their sophistication. Companies, financial firms and policymakers increasingly recognise that disclosures must go beyond the static to the strategic.