The GIP Webinar on TCFD Leading Practices and Carbon Accounting was held on May 13, 2021. The Webinar was run by the GIP secretariat of the Beijing office. Experts from Société Générale Group, PCAF, and CDP were invited to share best practices in TCFD disclosure and carbon accounting.

Adam VUARAN, the Head of CSR APAC at Société Générale, addressed the importance of the TCFD reporting framework and China’s role in energy and environmental transition. “The TCFD framework of reporting on climate governance, climate strategy, environmental risk, management, and the metrics and targets support this transition by providing a framework for taking stock on how much progress we each made thus far, and also how much further we need to go,” he said.

Paul GRIMAL, the Senior Climate Specialist at Société Générale, presented an overview of Société Générale’s TCFD reporting. The bank’s climate strategy focuses on double materiality, which is how corporates are exposed to risk and how they create risks for others. It also plays a role in accompanying its real-economy clients in the low- carbon transition. A significant chunk of its reporting is on risk assessment and management, including monitoring various risks stemming from climate change and their financial implications, both directly and indirectly.

Chenguang ZHAO, Sustainable Finance Policy Manager at CDP, shared some of the findings from CDP’s latest Sustainable Finance Financial Service Disclosure Report, including the increasing popularity of sustainable finance products and services, enhanced level of engagement on climate-related issues with clients. More and more financial institutions are assessing portfolio exposure to climate- related issues and requesting climate- related information as part of portfolio due diligence. However, the disclosure of financed emission and exposure to carbon-related assets is still rare.

Jialiang ZHANG, the Asia Pacific Lead at PCAF, shared some insights about the PCAF methodologies. The PCAF methodology is currently available and recognised under the TCFD. Built upon the GHG protocol, it helps financial institutions measure and disclose their finance missions from six asset classes, including loans, corporate bonds, and project finance. ZHANG also pointed out that data remains one of the key challenges, specifically the emission of individual investors, as the PCAF methodology is the aggregation of all the various investors that make up the actual portfolio.

In the Q&A session, GRIMAL summarised two takeaways from Société Générale’s experience. The first is to have an appropriate governing body to make effective climate decisions. The second is to allocate resources towards climate reporting. Alignment with the Paris Agreement, measurement of biodiversity- related risks, and strengthening internal incentives will be the future direction.

Underlining the pressing needs for action, ZHANG encouraged GIP members to start preparing early and engage with clients, peers, and regulators for collaboration,a sentiment which was echoed by other speakers at the webinar.