I international standards guiding financial institutions to disclose environmental, social and governance information
(1) General guidelines for environmental, social and governance information disclosure?
1. United Nations Sustainable Development Goals (SDGs)?
On September 25th, 20 15, 193 UN Member States formally adopted 17 Sustainable Development Goals (SDGs) at the summit, which covers food security, public health, human rights equality, sustainable cities and communities, labor practice, responsible consumption and production, climate change and biodiversity. ?
2. TCFD report on the recommendations of the Working Group on Climate-related Financial Information Disclosure?
From June 2065438 to June 2007, the Working Group on Climate-related Financial Information Disclosure (TCFD) issued the Report on the Recommendations of the Working Group on Climate-related Financial Information Disclosure, which took "governance, strategy, risk management, indicators and objectives" as the four core elements of organizational operation and provided relevant suggestions for financial institutions to disclose environmental information. At the level of risk management, indicators and targets, financial institutions need to describe the identification, assessment and management process of climate-related risks, as well as the indicators used; At the level of governance and strategy, financial institutions need to describe the supervision and management of climate-related risks by the board of directors and management, as well as the adaptability and flexibility of strategies in different climate scenarios.
3. Global Reporting Initiative (GRI)?
Global Reporting Initiative (GRI) was founded in 1997, and was jointly sponsored by CERES, an American non-profit environmental economic organization, and the United Nations Environment Programme. GRI standard is mainly composed of general 100 series and three special standards of 200, 300 and 400. It has three levels of requirements, suggestions and guidelines for the quality of information disclosure, and the requirement is "compulsory order". "Suggestions" are encouraged, but not necessary. "Guidelines" include background information, explanations and examples.
(2) Environmental, social and governance information disclosure requirements of different types of financial institutions.
In order to further promote financial institutions to implement the UN 2030 Sustainable Development Goals (Sustainable Development Goals) and the Paris Agreement in detail, the United Nations Environment Programme issued the ESG Practice Principles for Insurance Financial Institutions, Banking Financial Institutions and Securities Financial Institutions on 20 12 and 20 19 respectively, which set different requirements for ESG information disclosure of different types of financial institutions. That is, the principle of sustainable insurance, the principle of responsible banking (PRB) and the principle of responsible investment. ?
1. Banking financial institutions
For banking financial institutions, the Principles of Responsible Banking requires banks to ensure that their business strategies are consistent with the Agreement on Sustainable Development Goals and the Paris Agreement. At the goal level, banks are required to continuously improve their positive influence and reduce the negative impact of their business activities, products and services on human beings and the environment. Standardize bank behavior from the dimensions of customers, stakeholders and corporate governance; Finally, banks are required to regularly evaluate the implementation of the principles by individuals and the whole, publicly disclose the positive and negative impacts of banks and their contributions to social goals, and be responsible for the related impacts.
In addition to the Principles of Responsible Banking for Banking Financial Institutions, TCFD is also required to identify short-term, medium-term and long-term risks and opportunities from a strategic perspective in the Supplementary Guidelines for Financial and Non-financial Industries. At the level of risk management, the process of risk identification and evaluation should be described emphatically; In terms of indicators and targets, it focuses on the indicators used by banks in assessing climate-related risks and opportunities. ?
2. Securities financial institutions
For financial institutions in the securities industry, the principle of responsible investment requires them to incorporate ESG issues into the investment analysis and decision-making process in asset management practice, become active owners and appropriately disclose their own ESG information, so as to further promote the acceptance and implementation of PRI principles in the entire investment industry and create an economic, efficient and sustainable global financial system.
In addition to the principle of responsible investment of financial institutions in the securities industry, TCFD also requires asset managers to strengthen the disclosure of strategic content and strategic flexibility (considering different climate-related scenarios) at the strategic level in the Supplementary Guidelines for Financial and Non-financial Industries: at the risk management level, the risk identification, assessment and management processes should be described emphatically; As far as indicators and targets are concerned, it focuses on the indicators used to assess climate-related risks and opportunities and greenhouse gas emissions.
3. Insurance financial institutions
For financial institutions in the insurance industry, the principle of sustainable insurance first requires the insurance industry to combine ESG issues with the business decision-making process of insurance companies, encourage insurance companies to innovate products for insurable risk points in the ESG field, and share the ESG risks of customers and society. This principle reflects the uniqueness of the insurance industry. In addition, insurance companies are required to regularly disclose the progress of implementing the PSI principle, demonstrate the accountability mechanism and transparency of decision-making, and engage in dialogue with customers, regulators and rating agencies.
In addition to the principle of responsible investment of insurance financial institutions, TCFD also requires asset owners to strengthen the disclosure of strategic content and strategic flexibility (considering different climate-related scenarios) at the strategic level in the Supplementary Guidelines for Financial and Non-financial Industries; At the level of risk management, it focuses on the process of risk identification, assessment and management. In terms of indicators and targets, it focuses on indicators used in assessing climate-related risks and opportunities. ?
In the aspect of establishing publishing institutions, the international standards and guidelines on ESG information disclosure of financial institutions are dominated by large international organizations, which reflects the international community's emphasis on ESG performance of financial institutions. The core working groups of TCFD and PRB/PSI are from industries, so most of their disclosures are from the perspective of investors to help the community understand how organizations view and evaluate climate-related risks and opportunities.
In terms of the forms and requirements of information disclosure, TCFD mainly puts forward the guiding opinions of information disclosure from four aspects: governance, strategy, risk management and objectives, while PRB, PRI and PSI put forward specific principles for different stakeholders, providing a template for the reporting party, which is concrete and practical guidance; The sustainable development goal is a framework guide, in which the consistency principle of PRB is to ensure that the business strategy is consistent with the individual needs and goals described in the sustainable development goal.
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