CFRF Guide 2023: Climate Disclosures Dashboard 2.0 [pdf]

The Climate Financial Risk Forum (CFRF) – comprised of representatives of the FCA (Financial Market Conduct Authority), the PRA (Prudential Regulation Authority), and from industry – has published a new guide, namely the CFRF Guide 2023: Climate Disclosures Dashboard 2.0. The guide builds upon the previous Dashboard 1.0 and reflects regulatory changes and industry progress since 2021 as regards the disclosure of climate-related risks and engagements. Specifically, the guide sets out metrics that asset managers, insurance undertakings, and / or banks may use to assess and disclose their level of exposure to the following risks and their impacts from engagements in the following (mitigating) activities:
(1) transition risks
(2) physical risks
(3) financed emissions and portfolio alignment (activity engagement)
(4) financing the transition (activity engagement)
(5) other engagements.
For each of these areas, the guide further
– describes various metrics (basic (foundation), so-called „stretch“, and „advanced“ metrics) that can be used for assessing or disclosing exposures or effects from engagements depending upon the degree and depth of intended disclosures;
– describes – whenever possible – the relationship between the used metrics and financial impacts;
– identifies the data needed for each metric and the corresponding data sources;
– describes specific issues that may be relevant for or should be considered by asset managers, insurers, or financial institutions when using a particular metric; and
– summarizes key benefits from using a particular metric.
Additionally, and most importantly, the document provides a large number of „real life“ use cases for the application of the metrics.