In 2015, amid growing concerns over climate-related financial risks, the G20 Finance Ministers and Central Bank Governors asked the Financial Stability Board, an international body that monitors and makes recommendations about the global financial system, to review how the financial sector can account for climate-related risk. On December 4, 2015, the Financial Stability Board established the industry-led Task Force on Climate-Related Financial Disclosures ("Task Force"). The 32-member Task Force is chaired by Michael Bloomberg and includes members from global banks, insurance companies, asset managers, pension funds, accounting and consulting firms, credit rating agencies, and other nonfinancial companies.

The Task Force was asked to develop "voluntary, consistent climate-related financial disclosures that would be useful to investors, lenders, and insurance underwriters in understanding material risks." On December 14, 2016, the Task Force published its recommendations on climate-related financial disclosures. In developing the recommendations, the Task Force stated that it "drew on member expertise, stakeholder engagement, and existing climate-related disclosure regimes to develop a singular, accessible framework for climate-related financial disclosure."  

The Task Force's report includes four major recommendations applicable to all sectors, which are outline below. Within the four major recommendations are a total of 11 specific recommendations.

Governance. The Task Force recommends disclosing the organization's general governance concerning climate-related risks and opportunities. Specific recommendations include describing the board's oversight of these risks and opportunities, as well as management's role in assessing and managing these risks and opportunities.

Strategy. The Task Force recommends disclosing the actual and potential impacts of climate-related risks and opportunities on the organization's business, strategy, and financial planning. Specifically, organizations are encouraged to: (i) describe the climate-related risks and opportunities the organization has identified; (ii) describe the impact of these risks and opportunities on the organization's business, strategy, and financial planning; and (iii) describe the potential impact of different climate change scenarios on the organization's business, strategy, and financial planning.

Risk Management. The Task Force recommends disclosing how the organization identifies, assesses, and manages climate-related risks, including the processes for identifying and managing these risks and how these processes are integrated into the organization's overall risk management.  

Metrics and Targets. The Task Force recommends disclosing the metrics and targets used to assess and manage climate-related risks and opportunities, including greenhouse gas emissions and related risks, as well as performance against targets.  

The report also includes guidance for organizations in developing climate-related financial disclosures consistent with the Task Force's recommendations. The guidance provides additional context, suggestions, and examples to assist organizations with implementing the recommendations.  

The investor group Ceres immediately praised the Task Force's recommendations, stating that they "will help standardize how climate risks and opportunities are analyzed by companies, and generate critical information for investors to help them make better decisions." Ceres also noted that the recommendations were the result of corporate and G20 involvement that had not been seen before in the context of climate-related risk disclosure. Indeed, as has been reported extensively in The Climate Report, there has been much confusion and contention over climate risk disclosure.  

The effect of the Task Force's recommendations remains to be seen. The recommendations are voluntary; however, given the level of corporate involvement in developing the recommendations, they could prove to be a valuable starting point for companies amid growing pressure to disclose climate-related risk. Further, Ceres advocates for the recommendations to serve as the foundation for future mandatory disclosures, stating that "mandatory disclosure is the only way to ensure that reporting is truly comparable and consistent."