Blog
At the Forefront of Task Force on Climate-Related Financial Disclosures
By Lee Waite, Citi Country Officer for Japan April 12, 2022 10:30 AM
Earlier this year, Citi published its third TCFD Report and announced details of its Net Zero Declaration as part of its commitment to ESG. We understand that climate change is an increasingly important issue for our regulators, investors, and clients, and we believe the Task Force on Climate-Related Financial Disclosures' (TCFD) recommendations provide an important framework for recognizing, evaluating, and disclosing the associated risks and opportunities.
Amid an increasing need for stronger decarbonization support among our clients in all industries, last year we established the Sustainable Finance Office in Japan to build ESG/SDGs across divisions and enhanced our ESG/SDGs personnel and organizational structure. Indeed, Citi has been a member of the TCFD Consortium (*) since its inception in 2019. ESG is also one of Citi's strategic priorities in Japan. Leveraging the latest information, knowledge, and cases on disclosure and evaluation, both in Japan and overseas, Citi is putting every effort into rapidly building ESG partnerships that will strengthen the competitiveness of clients. Today, I would like to share our pioneering initiatives on the TCFD front.
Citi has consistently endorsed the Paris Agreement and was an early supporter of the TCFD. The TCFD promotes the understanding of climate-related risks and opportunities through enhanced climate disclosures. Citi has been outspoken in its support for the U.S. to remain in the Paris Agreement and was the first bank to sign the "We Are Still In" Declaration.
Citi endorsed the TCFD recommendations in 2017 and in 2018 became the first major U.S. bank to issue a TCFD report, Finance for a Climate-Resilient Future, for which we won an International Climate Reporting Award. The report presents information on Citi's business and operational climate performance, and on efforts to implement TCFD recommendations, including the climate scenario analyses that Citi undertook as part of the UN Environment Finance Initiative (UNEP FI) Banking Sector Pilot Project alongside 15 other financial institutions.
In 2020, Citi published its second TCFD climate disclosure report, Finance for a Climate-Resilient Future II. The report summarizes Citi's TCFD implementation progress, explains how climate change governance has been strengthened (from expanding board oversight to increasing senior engagement across businesses and conducting carbon price scenario analysis for our oil and gas exploration and production portfolio), and includes a credit exposure climate risk heat map.
Our adoption of the TCFD recommendations builds on more than two decades of work promoting sustainability. We will uphold our mission of enabling growth and progress and be proactive in driving an orderly transition, while recognizing the urgent need for climate action.
(*) TFCD consortium was established as a platform for corporations and financial institutions that support the TFCD recommendations to work together on initiatives that promote effective disclosure and discuss ways to link disclosed information to appropriate investment decisions by financial institutions. The Japanese TFCD working group has one of the largest number of supporting organizations in the world. https://tcfd-consortium.jp/en