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Data and Disclosure

An efficient, resilient financial system requires identification, pricing and management of material risks. As pointed out by the 2017 G20 Green Finance Synthesis Report, environmental risks can be material, with financial impacts on a company’s revenues, expenditures, asset valuation and cost of financing. Put simply, better information about climate and environmental risks is a prerequisite to growing green financial markets.

China is already implementing a mandatory environmental disclosure framework and promoting green and sustainable investment practice. And the UK is a leading contributor to global debates about data, risk and disclosure.

Harmonising disclosure standards, sharing well-established methodologies, metrics and target-setting for disclosure will be crucial to growing global green finance. The UK and China have an opportunity to set the bar for data and disclosure.

Projects

UK-China climate and environmental disclosure pilot

China and the UK launched a joint TCFD pilot programme, in which 10 leading financial institutions would adopt TCFD recommendations and curate the practical lessons they learned for subsequent adopters.

The purpose of the pilot is to:

  • establish a platform for peer exchange on climate and environmental risk disclosures between UK and Chinese financial institutions;
  • raise awareness of the materiality of climate and environmental risk factors and build capacity in both countries; and
  • pilot disclosures against an agreed action plan on an annual basis before the UK-China Economic and Financial Dialogue.

Since the announcement, pilot participants have met several times and in the process developed a joint three-year action plan. Each side is free to determine the details of their own plan, with the intention that each year will build on the last.

Advancing the UK – China’s Green Finance agenda through disclosure and demand-led capacity building for both financial firms and listed companies

CDP, with support from the BEIS ICF Technical Assistance Program, is working to support and incentivize China’s transition to a more environmentally sustainable growth model by employing green finance strategies. CDP is working with regulators in china, and investors and companies to integrate actions and explore synergies between the components of the financial system, resulting in better disclosure of their ESG impact.