{ "title": "Disclosure and Data on Climate Change", "publication": "IMF News, April 1, 2021", "sourceUrl": "https://www.imf.org/en/news/articles/2021/04/01/sp040121-disclosure-and-data-on-climate-change", "canonical": "https://www.imf.org/en/news/articles/2021/04/01/sp040121-disclosure-and-data-on-climate-change", "overlayPath": "/en/news/articles/2021/04/01/sp040121-disclosure-and-data-on-climate-change/index.md", "summary": "Remarks by Tobias Adrian, Financial Counsellor and Director of the Monetary and Capital Markets Department, IMF.", "publishDate": "2021-04-01", "sections": [ { "heading": "Overview", "content": "- Remarks by Tobias Adrian, Financial Counsellor and Director of the Monetary and Capital Markets Department, IMF.\n- Event: New Economy Forum, 2021 Spring Meetings.\n- Date: April 1, 2021.\n- Purpose: Outline the IMF’s perspective and priorities on climate-related disclosures, data gaps, and the information architecture needed to assess climate risks to the financial system." }, { "heading": "Urgency and systemic relevance of climate risks", "content": "- Climate risks are framed as an \"urgent global imperative\" with potential for \"catastrophic global scenarios\" that could have \"devastating effects on societies, economies, and the financial system.\"\n- The COVID crisis illustrates how extreme \"tail events\" can cause extensive disruption of economic activity and informs approaches to assessing climate risks.\n- The IMF has made understanding implications of climate change for the global financial system and financial stability an important additional priority." }, { "heading": "Financial-stability implications and supervisory priorities", "content": "- Climate-related disclosures matter for:\n - Financial stability assessments.\n - Informed market pricing of physical and transition risks.\n - Growth of sustainable finance.\n- Stress-testing, sensitivity analysis, and scenario analysis are identified as important tools to assess potential financial implications of climate risk.\n- Over the past decade, \"one in five Financial Sector Assessment Programs (FSAPs) conducted by the IMF contained an examination of climate-related physical risks, with transition risks becoming an increasing focus.\"\n- Regulatory and supervisory frameworks should be strengthened to ensure:\n - Supervisors identify and monitor key exposures of financial institutions to climate-related financial risks.\n - Clear expectations are set for governance and management of those risks by financial institutions.\n- Taking the global dimension into consideration will be increasingly important given the financial-stability implications of climate change." }, { "heading": "Information architecture needed to assess climate risks", "content": "- The IMF views the information architecture around climate risks as consisting of three components:\n 1. Reliable and high-quality data.\n 2. A harmonized and consistent set of climate disclosure standards.\n 3. A broadly agreed upon global taxonomy.\n\n- Data:\n - The IMF is active through:\n - Co-chairing the Network for Greening the Financial System’s \"Bridging the Data Gaps (BDG) Workstream\".\n - Internal work on developing a database on climate indicators.\n - Bridging climate-related data gaps is challenging due to issues of data availability, reliability, and comparability.\n - The NGFS BDG has adopted a user-centric approach based on:\n - Categorizing use cases.\n - Classification of metrics.\n - Links to data sources.\n - The IMF’s workplan to develop climate-change indicators for macroeconomic analysis will complement NGFS work and address a subset of BDG-identified data gaps.\n\n- Climate disclosures:\n - The current space is \"fragmented\" with multiple frameworks, creating an \"urgent need for convergence toward a harmonized and consistent set of climate disclosure standards.\"\n - The IMF strongly supports the International Financial Reporting Standards Foundation’s initiative on global sustainability reporting standards to align with financial reporting and assurance by auditors.\n - The IMF commends the alliance of leading standard-setters on sustainability for developing prototype standards.\n - The IMF encourages use of insights from the Task Force on Climate-related Financial Disclosures (TCFD) as a framework to build on; TCFD \"has gained strong support\" and \"can serve as a basis for greater climate-related disclosures.\"\n - Outstanding issues include:\n - Pathways to mandatory adoption.\n - Approaches on materiality.\n - Interaction with jurisdictional approaches.\n - Scope of what is covered within climate disclosure standards.\n\n- Taxonomies:\n - Steps toward globally agreed-upon taxonomies are \"probably less advanced,\" though efforts by the European Union and others are notable.\n - Given the absence of harmonized metrics that accurately measure climate-change-related risks and opportunities, taxonomies can:\n - Facilitate information about climate risk to investors.\n - Foster sustainable finance markets.\n - Help monitor financial risks associated with climate change.\n - A minimum agreed-upon global taxonomy combined with good quality data would enhance effectiveness and quality of disclosure.\n - Identifying opportunities for convergence toward a common taxonomy is important to ensure consistency and a consolidated and uniform framework for climate-related disclosures." }, { "heading": "IMF roles, collaboration, and expected outcomes", "content": "- The IMF’s roles highlighted:\n - Participation in NGFS BDG as co-chair.\n - Internal development of a database on climate indicators.\n - Development of a workplan for climate-change indicators for macroeconomic analysis.\n - Support for convergence on disclosure standards and taxonomies.\n- Collaboration across jurisdictions, standard-setters, private sector, and international organizations is emphasized.\n- The goal is to build a climate-resilient financial system globally by focusing on key priorities, coordinating efforts, and delivering necessary outcomes." }, { "heading": "Key findings and priorities (bulleted)", "content": "- Climate risks can cause \"catastrophic global scenarios\" with systemic effects.\n- Experience from COVID underscores relevance of analyzing extreme \"tail events\" for climate risk assessment.\n- One in five FSAPs over the past decade included examination of climate-related physical risks; transition risks are an increasing focus.\n- Three critical components of information architecture: data, disclosure standards, global taxonomy.\n- IMF actively contributes to BDG and is developing climate indicators for macroeconomic analysis.\n- Support for IFRS Foundation’s initiative on global sustainability reporting standards and use of TCFD insights.\n- Need to resolve issues on mandatory adoption, materiality, jurisdictional interaction, and scope of disclosure standards.\n- Need for convergence toward a common taxonomy to improve consistency and disclosure quality.\n\nRemarks by Tobias Adrian, Financial Counsellor and Director of the Monetary and Capital Markets Department, IMF; New Economy Forum, 2021 Spring Meetings; April 1, 2021.\n\n---\n\n\n References\n\n- Tobias Adrian\n- Speeches\n- PRESS CENTER\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2021/04/01/sp040121-disclosure-and-data-on-climate-change" } ], "bullets": [ "[Markdown version](/en/news/articles/2021/04/01/sp040121-disclosure-and-data-on-climate-change/index.md)", "[Structured JSON version](/en/news/articles/2021/04/01/sp040121-disclosure-and-data-on-climate-change/index.json)", "[Bundle manifest](/en/news/articles/2021/04/01/sp040121-disclosure-and-data-on-climate-change/bundle-manifest.json)", "Published: April 1, 2021", "Remarks by Tobias Adrian, Financial Counsellor and Director of the Monetary and Capital Markets Department, IMF.", "Event: New Economy Forum, 2021 Spring Meetings.", "Date: April 1, 2021.", "Purpose: Outline the IMF’s perspective and priorities on climate-related disclosures, data gaps, and the information architecture needed to assess climate risks to the financial system.", "Climate risks are framed as an \"urgent global imperative\" with potential for \"catastrophic global scenarios\" that could have \"devastating effects on societies, economies, and the financial system.\"", "The COVID crisis illustrates how extreme \"tail events\" can cause extensive disruption of economic activity and informs approaches to assessing climate risks.", "The IMF has made understanding implications of climate change for the global financial system and financial stability an important additional priority.", "Climate-related disclosures matter for:", "Stress-testing, sensitivity analysis, and scenario analysis are identified as important tools to assess potential financial implications of climate risk.", "Over the past decade, \"one in five Financial Sector Assessment Programs (FSAPs) conducted by the IMF contained an examination of climate-related physical risks, with transition risks becoming an increasing focus.\"", "Regulatory and supervisory frameworks should be strengthened to ensure:", "Taking the global dimension into consideration will be increasingly important given the financial-stability implications of climate change.", "The IMF views the information architecture around climate risks as consisting of three components:", "Data:", "Climate disclosures:", "Taxonomies:", "The IMF’s roles highlighted:", "Collaboration across jurisdictions, standard-setters, private sector, and international organizations is emphasized.", "The goal is to build a climate-resilient financial system globally by focusing on key priorities, coordinating efforts, and delivering necessary outcomes.", "Climate risks can cause \"catastrophic global scenarios\" with systemic effects.", "Experience from COVID underscores relevance of analyzing extreme \"tail events\" for climate risk assessment.", "One in five FSAPs over the past decade included examination of climate-related physical risks; transition risks are an increasing focus.", "Three critical components of information architecture: data, disclosure standards, global taxonomy.", "IMF actively contributes to BDG and is developing climate indicators for macroeconomic analysis.", "Support for IFRS Foundation’s initiative on global sustainability reporting standards and use of TCFD insights.", "Need to resolve issues on mandatory adoption, materiality, jurisdictional interaction, and scope of disclosure standards.", "Need for convergence toward a common taxonomy to improve consistency and disclosure quality.", "[Tobias Adrian](http://www.imf.org/external/np/bio/eng/ta.htm)", "[Speeches](https://www.imf.org/en/news/searchnews)", "[PRESS CENTER](http://presscenter.imf.org/)", "[https://www.imf.org/en/home](https://www.imf.org/en/home)" ], "alternates": { "markdown": "/en/news/articles/2021/04/01/sp040121-disclosure-and-data-on-climate-change/index.md", "json": "/en/news/articles/2021/04/01/sp040121-disclosure-and-data-on-climate-change/index.json", "bundleManifest": "/en/news/articles/2021/04/01/sp040121-disclosure-and-data-on-climate-change/bundle-manifest.json" }, "generatedAtUtc": "2026-09-26T00:17:13.865Z" }