AP6 has declared its support for the international recommendations stating that companies and investors should be reporting climate-related risks and opportunities in their financial statements. The recommendations have been issued by the Task Force on Climate-related Financial Disclosures (TCFD), which recommend reporting on governance, strategy, risk management, metrics and targets. The recommendations cover such things as reporting carbon footprint and analysis of future climate-related risks that could impact companies in the portfolio and thereby the portfolio’s return. In 2019, AP6 compiled its first high-level analysis of physical climate risks in the portfolio. Although it does not go into great depth, it does indicate that there are medium-high risks in nearly half of the portfolio. It is not currently possible for AP6 to, at the portfolio level, assess other climate-related risks like changes in consumer behavior or more regulation of products and emissions.
The core of AP6’s focus on climate is to show the importance of the climate issue from an investor perspective and to promote greater transparency on climate-related issues. AP6 welcomes the recommendations launched on how companies and investors can report climate-related information. Behind the new recommendations is the Task Force on Climate-related Financial Disclosures (for more information www.fsb-tcfd.org).
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