Climate-related Financial Disclosures for the Public Sector
Adaptive Futures is pioneering the ways in which United States government entities will disclose climate-related financial risks to tax payers, credit rating agencies and other stakeholders. Inspired by the Task Force on Climate-related Financial Disclosures (TCFD), Adaptive Futures, in partnership with the National Aeronautics and Space Administration (NASA), created a concept for United States government entities to use in reporting climate-related financial risks.
In 2015, the Financial Stability Board (FSB), an international body that monitors and makes recommendations about the global financial system, launched the Task Force on Climate-related Financial Disclosures (TCFD). The Task Force is specifically focused on developing “voluntary, consistent climate-related financial risk disclosures for use by companies in providing information to investors, lenders, insurers, and other stakeholders.”
Based upon the mission and work of the TCFD, Adaptive Futures, in partnership with NASA, realized that a similar initiative was necessary for use by the public sector, including federal, state, local, and tribal government entities; accordingly, they created a concept for a framework that government entities can use in disclosing climate-related risks in their budgets, contracts, and other financial activities. The intent of the framework is to make the disclosure process as integrated, streamlined, and harmonized as possible; additionally, these types of disclosures from the public sector will ensure citizens’ tax dollars are used to protect government services from the impacts of climate change.
In order to bring the framework into fruition, Adaptive Futures pitched the idea to the National Academy of Science’s Board on Environmental Change and Society (BECS). The BECS Board agreed that this is a timely and relevant issue for all federal entities and is laying the path for a consensus study to advance climate-related financial disclosures for the U.S. public sector. The consensus study guarantees the development of impartial and objective recommendations that government entities can feel confident using to disclose their climate-related financial risks and prepare for the impacts of climate change. Adaptive Futures is currently supporting the BECS Board in developing the statement of task, finding funders for the study, and establishing an engaged stakeholder group.