Physically Fit? How Financial Institutions Can Better Disclose Climate-Related Physical Risks in Line with the Recommendations of the TCFD
This paper discusses physical climate-related risk disclosure practices by financial institutions and provides a resource for developing such disclosures. Current practices and guidance often leave physical risk blind spots as they focus primarily on the potential transition risks of a shift toward a low-carbon economy. The Financial Stability Board’s Taskforce on Climate-related Financial Disclosures (TCFD) updated its implementation guidance in 2021. Financial regulators have also identified the gap in disclosures of physical climate risks.