Our new free-to-use resource helps fund managers in emerging markets to navigate climate risks and opportunities.
Climate change is having a significant impact on communities and businesses all over the world and is something that investors should consider. The countries where we invest in Africa, Asia and the Caribbean are amongst the most vulnerable to climate change, and businesses are already feeling its effects through changing weather patterns or extreme weather events which in turn affect yields, disrupt supply chains and impact returns.
As the pace of climate change continues to accelerate, investment fund managers have a critical role to play in supporting the transition to low-carbon and climate-resilient economies.
Many fund managers we work with, both within our portfolio and those who attend our workshops, have told us that they would like to do more to proactively address climate risks and opportunities, but they’re not sure how to go about it. Whilst there is some existing guidance available for asset managers, it does not consider the specific context of investors that are active in developing markets, or who may be at the beginning of their journey addressing climate change.
Our new toolkit fills this gap, providing tailored step-by-step guidance and practical tools for the full spectrum of fund managers in developing markets, regardless of where they are on their journey in addressing climate change.
The toolkit focuses on the Taskforce on Climate-related Financial Disclosures (TCFD), a market-leading standard that helps fund managers to assess and integrate climate-related risks and opportunities into their investment processes and decision-making. It is also increasingly forming the basis of regulatory requirements around the world.
The main features of this toolkit include:
- An introduction to the structure and core pillars of the TCFD
- The TCFD maturity matrix tool – a self-assessment tool for fund managers to evaluate their level of maturity in implementing the TCFD recommendations.
- Practical step-by-step guidance notes and stand-alone templates for each of the TCFD pillars – governance, strategy, risk management, and metrics and targets. Wherever feasible, these are broken up for fund managers starting their climate change journey and for fund managers that are more advanced. Examples of available tools include: Terms of Reference for a climate change risk assessment; guidance, content, and examples of a climate change policy; and a table of recommended climate-related metrics.
This toolkit is based on current guidance and practice, and we expect it to evolve as new requirements are brought into force. We hope that it provides clarity and support to fund managers as they implement the TCFD recommendations.