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In his annual letter to CEOs, BlackRock CEO Larry Fink asked that CEOs "issue reports consistent with the Task Force on Climate-related Financial Disclosures."
In his annual letter to CEOs, BlackRock CEO Larry Fink asked
that CEOs "issue reports consistent with the Task Force on
Climate-related Financial Disclosures." As the head of
the biggest asset manager in the world, Fink's views carry
significant weight among businesses.
This announcement by Fink reflects a growing consensus among
both prominent businesses (e.g., State Street) and regulators
(e.g., SEC Chairman Gensler), that the disclosure framework
outlined by the TCFD for climate-related disclosures is the
appropriate model to adopt. Although prominent regulators in
the United States, such as the SEC, have not yet endorsed the TCFD
model--indeed, the SEC has not yet issued its rules on
climate-related disclosures, despite indicating that such
disclosures constituted a priority for the Biden Administration--it
is likely that the increasing embrace of this model by private
investors will impact the reasoning and eventual implementation
decision by regulators.
Notably, if many companies already feel compelled by investor
demands to issue TCFD disclosures, the imposition of similar
regulatory requirements may not inspire as much resistance as would
be provoked by other types of climate disclosures.
We focus on sustainability not
because we're environmentalists, but because we are capitalists
and fiduciaries to our clients. That requires understanding how
companies are adjusting their businesses for the massive changes
the economy is undergoing. As part of that focus, we are asking
companies to set short-, medium-, and long-term targets for
greenhouse gas reductions. These targets, and the quality of plans
to meet them, are critical to the long-term economic interests of
your shareholders. It's also why we ask you to issue reports
consistent with the Task Force on Climate-related Financial
Disclosures (TCFD): because we believe these are essential tools
for understanding a company's ability to adapt for the
future.
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
