Past Events

TCFD Summit 2019

October 8 (tue), 2019

On-demand Video


The Digest of the TCFD Summit 2019

About TCFD Summit

  • The inaugural TCFD Summit was held in Tokyo, bringing together leaders of leading global companies, financial institutions to discuss the future direction of the TCFD toward accelerating a virtuous cycle of environment and growth
  • Japan released "Green Investment Guidance" as a guideline for investors to assess corporate disclosures and received wide support
  • Key Takeaways from the TCFD Summit : from divestment to engagement; the importance of assessment not only of climate change risks, but also of its opportunities

Group photo of Speakers
Group photo of Speakers

From TCFD SUMMIT 201
From TCFD SUMMIT

Summary of the TCFD Summit ①

  • Japan's Minister of Economy, Trade and Industry explained Japan's efforts to date for the TCFD and the importance of information disclosure. Participants also shared recognition of the importance of investment toward innovations and of measures against climate change no longer as a matter of cost but as a source of competitiveness.
  • Mr. Mark Carney, Governor, the Bank of England, stated that climate disclosure must become comprehensive, and that investing in a two-degree world must go mainstream.
Welcome Message Mr. Sugawara Isshu, Minister of Economy, Trade and Industry
Opening Remark Mr. Mark Carney, Governor, the Bank of England
Opening Session
(Expectations for
the TCFD Summit)
Prof. Ito Kunio, Chair of the TCFD Consortium / Professor, Ph.D. Graduate School of Business Administration, Hitotsubashi University
Mr. Peter Bakker, President and CEO, WBCSD
Ms. Mary L. Schapiro, Advisor, TCFD Secretariat
Mr. Mizuno Hiromichi, Principle for Responsible Investment (PRI) Board member / Executive Managing Director and Chief Investment Officer, Government Pension Investment Fund (GPIF)
Mr. Shindo Kosei, Representative Director and Chairman, Nippon Steel Corporation / Vice Chair, Japan Business Federation (Keidanren)
Mr. Charles O. Holliday, Chairman, Royal Dutch Shell Plc

Mark Carney
Mr. Mark Carney, Governor, the Bank of England

To bring climate risks and resilience into the heart of financial decision-making, climate disclosure must become comprehensive, climate risk management must be transformed, and investing for a two-degree world must go mainstream.…Now,…disclosure needs to go beyond the static to the strategic. Financial markets need information to assess which companies are resilient to climate change. To this end, companies, their banks, insurers and investors must:
1. Increasing the quantity and quality of disclosures by sharing best practices
2. Refining those disclosures to the most decision-useful metrics
3. Spreading knowledge on how to measure knowledge on strategic resilience
4. TCFD should begin to consider how asset owners could best disclose the extent to which their portfolios are positioned for the transition to net zero

→ At present of course one of the biggest hurdles to doing these is the huge variation in the measurement of ESG. Common taxonomy is to identify environmental outperformance, such as the EU's Green Taxonomy and the UN bond standard can help, but these taxonomies have tended to be binary, in other words either dark green or all brown, and mainstream sustainable investment will require a richer taxonomy, if you will, "fifty shades of green."

Summary of the TCFD Summit ②

  • In opening session (Expectations for the TCFD Summit), speakers representing co-organizers (WBCSD and TCFD Consortium), TCFD secretariat, investors and business entities gave speeches that set the scene for the TCFD Summit.
  • Prof. Ito, Chair of the TCFD Consortium and Professor at Hitotsubashi University, explained that the Guidance for Utilizing Climate-related Information to Promote Green Investment (Green Investment Guidance), publicized by the TCFD Consortium on the same date of the summit, focused on three areas: promoting constructive dialogue engagement; understanding and evaluating climate-related risks and opportunities; and promoting innovation and building mechanisms to facilitate appropriate fund flow. He underlined overcoming the dichotomy between environment and economy.
  • Mr. Bakker, President and CEO of WBCSD, stated that while business has a critical role to play in realizing the SDGs and the Paris Agreement, it was indispensable to transform the financial system and the most important catalyst that was out there to transforming the conversation between business and capital markets was the work of the TCFD.
  • Ms. Schapiro, Advisor of TCFD Secretariat, expressed her expectation that Japan would continue to take leadership in the world and the TCFD recommendations would become commonplace in financial disclosures.
Ito KunioProf. Ito Kunio, Chair of the TCFD Consortium and Professor at Hitotsubashi University
Peter BakkerMr. Peter Bakker, President and CEO, WBCSD
Mary L. SchapiroMs. Mary L. Schapiro, Advisor, TCFD Secretariat

Summary of the TCFD Summit ③

  • Mr. Mizuno, PRI Board member / Executive Managing Director and CIO, GPIF stated that GPIF published the reporting in line with the TCFD recommendations in its ESG report this August, and that when portfolio of GPIF which is universal owner would become aligned with the two degrees, then the world would become aligned with the two degrees scenario.
  • Mr. Shindo, Representative Director and Chairman, Nippon Steel Corporation / Vice Chair of Keidanren, said that the Japan Iron and Steel Federation had promoted initiatives such as formulation of a long-term vision for the industry "A Challenge towards Zero-carbon Steel" last November. He stated that in order to realize the virtual cycle of the environment and economic growth, the assessment of opportunities needed to be further focused and investment should be driven not by divestment ideas, but by technological development towards a future society.
  • Mr. Holliday, Chairman of Shell stressed that it should not scare us to have an energy transition and we're in that period now where we're seeing those opportunities. He said that even though Shell had been doing scenario planning for 48 years, to achieve this, it set a goal for 2035 and 2050 of their carbon reductions and tied a three-year goal on carbon to our executives' compensation.
  • Video message from Vice-President Dombrovskis, EC, said that public money won't be enough for achieving the Paris Agreement goals so that EC presented sustainable finance action plan like taxonomy to mobilize private finance toward sustainable growth. He also extended Japan a welcome to its leadership on climate-related disclosures and its work towards a public-private initiative including "Green Investment Guidance" to scale up green investment.
Mizuno HiromichiMr. Mizuno Hiromichi, PRI Board member / Executive Managing Director and CIO, GPIF
Shindo KoseiMr. Shindo Kosei, Representative Director and Chairman, Nippon Steel Corporation / Vice Chair, Keidanren
Charles O. HollidayMr. Charles O. Holliday, Chairman, Royal Dutch Shell Plc
Valdis DombrovskisVideo message from Mr. Valdis Dombrovskis, Vice President, European Commission (EC)

Summary of the TCFD Summit ④

  • In panel 1 (From Divestment to Engagement), panelists shared their recognition that divestment only shifts the emissions; it does not eliminate them so that it is important to encourage companies to change themselves through engagement; the Green Investment Guidance (GIG) will be a useful tool in facilitating dialogues between corporates and investors.
Panel
Discussion 1
(From Divestment
to Engagement
)
Facilitator:
Mr. Mizuno Hiromichi, PRI Board member / Executive Managing Director and CIO, Government Pension Investment Fund (GPIF)
Panelists:
Mr. Martin Skancke, Chair of Principle for Responsible Investment (PRI) Board
Mr. Gordon J. Fyfe, CEO&CIO, British Columbia Investment Management Corp (BCI)
Mr. Yu Ben Meng, CIO, The California Public Employees' Retirement System (CalPERS)
Ms. Yoo-Kyung Park, Head of APAC Responsible Investment & Governance, APG AM
Mr. Mark Lewis, Global Head of Sustainability Research, BNP Paribas AM
Ms. Helle Kristoffersen, President Strategy-Innovation; Member of the Executive Committee, Total

A scene from Panel discussion 1
A scene from Panel discussion 1

Helle KristoffersenMs. Helle Kristoffersen
Total
  • Engagement is key to become winner or loser. GIG strongly emphasized in there.
  • We cannot afford to miss out on existing low-carbon solutions, even if they are not entirely dark green. Progress like energy transition bonds issued by energy companies should be recognized.
Gordon J. FyfeMr. Gordon J. Fyfe
BCI
  • There's a lot more opportunity to engage; to advocate for change; to have influence. If you divest, all really you're doing is just moving the emissions somewhere else.
  • Not only ESG team, but also decision-making portfolio managers must go and talk to companies.
Yu Ben MengMr. Yu Ben Meng
CalPERS
  • Divestment simply shifts the emission from your portfolio to someone else's portfolio and is against our fiduciary duty because of losing the diversification benefit of your investment
  • Engagement is a much more effective approach maintaining the seat at the table and raising voice.
Yoo-Kyung ParkMs. Yoo-Kyung Park
APG AM
  • We will divest, if there's nothing working, and then this is the only way to warn the company. As a fiduciary manager and responsible manager, we need to do everything that we can.
  • "Beautiful" material only made by external consultants leads investors to wrong kind of solution.
Martin SkanckeMr. Martin Skancke
PRI
  • While divestment is such a visible and symbolic tool, engagement takes a lot of time; effort; patience.
  • Investors need to be more transparent around their engagement efforts so that you can build up its credibility as a longer-term tool, and alleviate some of the pressure to divest.
Mark LewisMr. Mark Lewis
BNP PARIBAS AM
  • Through engagement, we focus on trying to move management towards the trajectory that we want them to be particularly on the climate change issue.

Summary of the TCFD Summit ⑤

  • In panel 2(How to Develop Opportunity Assessment?), panelists from companies introduced positive feedback on disclosing climate-related corporate information. While ESG indexes companies/asset managers said that they're developing metrics and framework for assessing opportunities, but there's still a lack of data, particularly on small and midcap, SASB pointed out that there's a problem with not a lack of data, but a problem with the quality of data as well as inconsistency of data, which requires different models of raters to be consistent.
  • In panel 3(Disclosure in Asia: Challenges and Opportunities), panelists discussed the challenges in promoting disclosure in line with the TCFD recommendations in Asia where rapid growth and huge demand of green investments are envisaged. There were remarks: in Asia making up of highly emitting sectors, how do we encourage these companies to report more while we deal with growth, access to energy and a just transition; more practical way of assisting the business corporation and financial institution could be developing certain transition taxonomy type of instrument.
Video message Mr. Valdis Dombrovskis, Vice President, European Commission (EC)
Panel
Discussion 2
(How to Develop
Opportunity
Assessment?)
Facilitator:
Ms. Mardi McBrien, Managing Director, Climate Disclosure   Standards Board (CDSB)
Panelists:
Mr. Tokura Masakazu,Chairman of the Board, Sumitomo Chemical Co, Ltd
Mr. Pierre Breber, Vice President and Chief Financial Officer, Chevron Corp
Mr. Nicholas Akins, Chairman, President & CEO, American Electric Power
Mr. Waqas Samad, CEO, FTSE Russell
Mr. Baer Pettit, President, MSCI Inc.
Mr. Stanislas Pottier, Chief Responsible Investment Officer, Amundi
Dr. Madelyn Antoncic, CEO, Sustainability Accounting Standards Board (SASB)
Panel
Discussion 3
(Disclosure in Asia:
Challenges and
Opportunities)
Facilitator:
Ms. Rebecca Mikula-Wright, Executive Director, Asia Investor Group on Climate Change (AIGCC)
Panelists:
Mr. Ikeda Satoshi, Chief Sustainable Finance Officer, Japan Financial Service Agency (JFSA)
Ms. Emily Chew, Manulife Investment Management ESG Global Head
Mr. Richard Pan, Managing Director; Head of QFII Investment and International Business, China Asset Management
Mr. Georg Kell, Chairman, Arabesque
Mr. Matthew Arnold, Global Head of Sustainable Finance, J.P. Morgan
Closing Remark Mr. Peter Bakker, President and CEO, WBCSD

A scene from Panel discussion 2
A scene from Panel discussion 2

A scene from Panel discussion 3
A scene from Panel discussion 3

Summary of the TCFD Summit ⑥

  • In closing remark, Mr. Bakker, President and CEO, WBCSD, co-organizer of the summit, stated the following message as key takeaways of the summit.
Peter Bakker
Mr. Peter Bakker, President and CEO, WBCSD

Abstract of key takeaways from the TCFD summit

  • In order to accelerate a virtuous cycle of environment and growth, we need constructive mechanisms that can improve corporate value and generate a positive flow of finance with increased returns on investments. The "Green Investment Guidance" released today by the TCFD Consortium will be a useful tool in facilitating these dialogues between corporates and investors.
  • We need to progress the transition to a more sustainable finance system by having a clear understanding of the risks of climate change and how to price them, but also of the opportunities that the transition to a net-zero society offers business as a channel for innovation.
  • We have heard that in order to accelerate the realization of a virtuous cycle of environment and growth, divestment as a strategy has its limitations; rather constructive engagement is a more powerful tool to generate a more a positive flow of finance towards an energy transition.
  • In Asia, where rapid growth, infrastructure investments and increasing demand for green investments are envisaged, it is essential to promote climate-related disclosures in line with the TCFD implementations. It is important that we adopt a pragmatic approach in this region to support a smooth transition towards a low-carbon society, which supports Asia's continued economic development. Equally, it will be important to showcase the suite of low carbon technologies that have the potential to contribute to the transition in the region, with the understanding that these solutions may represent "50 shades of green".
  • We have also heard clear calls for continued efforts to bring together a wide range of stakeholders, including global industry, the financial community, the public sector, regulators and international institutions to support the TCFD and focus the work towards the implementation of its recommendations. This will be a key catalyst in sparking the virtuous cycle of environment and growth on a global scale.
  • Therefore it is our intention to convene this summit again in Tokyo next year and we look forward to the opportunity to hear more about the progress the TCFD community is making. In the meantime, we can rely on the Japan's TCFD Consortium to continue to support our efforts through its commitment to collect and disseminate best practice from around the world, including Asia.
  • Finally I would also like to add that it is also abundantly clear from today's discussion that the TCFD is playing a critical role with regard to guiding our transition to a low carbon economy. It is therefore of the utmost importance that the work of the TCFD should continue and that it should go on providing a platform and an impetus for these of vital discussions and learning opportunities.