BlackRock, the world’s largest investor, has said that climate risk will be a key issue for engagement in 2017.
The investor’s statement also offers an early sign that it expects directors to heed the advice issued recently by the Task Force on Climate-Related Financial Disclosures TCFD), a board set up by the Financial Stability Board and led by Michael Bloomberg.
And BlackRock will expect the directors of some companies to know their climate risks in detail.
The news comes in a statement issued by the fund manager to clarify its core engagement concerns and the procedures it will follow with engagement.
“Over the course of 2017 we intend to engage companies most exposed to climate risk to understand their views on the recommendations from the TCFD and to encourage such companies to consider reporting against those recommendations in due course.
“For directors of companies in sectors that are significantly exposed to climate risk, the expectation will be for the whole board to have demonstrable fluency in how climate risk affects the business and management’s approach to adapting and mitigating the risk.
“Assessments will be made both through corporate disclosures and direct engagement with independent board members, if necessary.”
The TCFD issued its advice in mid-December offering companies, regulators and legislators a route map to improved disclosures about climate-related risks.
Mark Carney, governor of the Bank of England and chair of the Financial Stability Board, said: “The disclosure recommendations will give financial markets the information they need to manage risks, and seize opportunities, stemming from climate change.
“As a private sector solution to a market issue, the Task Force has focused on the practical, material disclosures investors want and which all capital-raising companies can compile.”