Fully signed up
There is no shortage of options for companies to sign up to as a means of demonstrating their sustainability credentials. Choosing the most relevant ones is important – and the Task Force on Climate-Related Financial Disclosures (TCFD) is front and centre for Commonwealth Bank of Australia (CommBank).
MACFARLANE Like the other major banks in Australia, we have aligned with the TCFD recommendations. In fact, 2018 was the first year we reported against this framework. We devoted 13 pages in our annual report to our TCFD reporting and have received a fantastic response on our transparency from external stakeholders at the institutional-investor and nongovernmental organisational levels.
Per the recommendations of the TCFD, we have undertaken scenario analysis on transition and physical risk. Our physical analysis was on our homebuying and insurance book and the transition-risk analysis was across part of the wealth business as well as our business-lending portfolio.
For year one, our goal was to undertake comprehensive scenario analysis to understand and report against the drivers of risk and opportunity from our analysis.
From here it will be about continuing to embed these results into our business, thinking about how we manage the climate risk more directly in the portfolios and also how we identify opportunities to support our customers and our product suite in the transition to a low-carbon economy.
This is a process. The TCFD provides the ‘guard rails’ and now it’s about how we as a sector up the ante year-on-year to improve our transparency and disclosures on climate risk. The snowball has started to roll – there is no going back on climate disclosure and these processes will only become more comprehensive and nuanced from here.
MACFARLANE We are signatories and participants to the Equator Principles, the UN Global Compact, the UN Guiding Principles on Business and Human Rights, and many more.
Institutions can become participants and signatories to a wide gamut of different pacts and principles. We want to take part where we believe we can have the most impact using measurements we deem to be most appropriate. We don’t want to overcommit but rather to ensure we have a core group of networks, committees and pacts we are aligned to, that enable us to keep ourselves accountable.
This doesn’t mean we will narrow down the number of pacts and principles we are part of. Rather, it’s about taking a balanced view around what we sign up to in order to ensure we can meet the requirements. This will also allow us to set a benchmark that will drive better business, social and environmental outcomes over time.
