Page 27 - Risk Management Bulletin January-June 2023

RMAI BULLETIN JANUARY - JUNE 2023

(iv) Metrics and Targets - Disclose the metrics and targets used to assess and manage
relevant climate-related risks and opportunities where such information is material.
Recommended Disclosure Illustrative Examples
a) Disclose the metrics used by the REs may disclose:
organisation to assess and • Risk and alignment metrics and targets used to assess the
manage relevant climate-related impact of (physical and transition) climate-related risks and
risks and opportunities where opportunities on their business activities in the short,
such information is material. medium, and long term
b) Disclose Scope 1, Scope 2 and, if • Breakdown of metrics and targets by industry, geography,
appropriate and feasible, Scope 3 credit quality and average tenor
GHGs emission26, and the • Scope 1 and 2 emissions of RE’s own operation
relevant risks. • Scope 3 emissions for their lending, investing and other
c) Describe the targets used by the financial intermediary business activities where data and
organisation to manage climate- methodologies may allow
related risks and opportunities • Amount and percentage of carbon-related assets relative to
and performance against targets. total assets as well as the amount of lending and other
financing connected with climaterelated opportunities
• Methodology used in relation to such metrics and targets
(e.g., calculation, standard adopted)
• Any verification and assurance of the disclosed metrics (e.g.,
emission)
• The extent to which their lending and other financial
intermediary business activities, where relevant, are aligned
with a well below 2°C scenario, using whichever approach
or metrics best suited to their organizational context or
capabilities

D.4.3 Operating Guidelines • the materiality of climate-related risks RE is
a. REs may explore aligning their Climate-related exposed to.
Financial Disclosures on the lines of the FSB’s TCFD
framework, which has increasingly been D.4.4 Considering the evolving disclosure landscape,
recognised as a suitable basis for climate-related REs may keep themselves updated on the global and
financial disclosures. Adapting the same would domestic developments in this regard and should plan
also help improve the consistency and to progressively enhance their disclosures. For instance,
comparability of the Climate-related Financial while most REs may be less ready at this stage to report
Disclosures of the REs with their counterparts Scope 3 emissions or concentrations of credit exposure
globally. to carbon-related assets, they should start chalking out
a plan to obtain relevant information such as by
b. REs may make such disclosures annually, to begin
collecting emission data from their customers.
with. They may use their sustainability reports,
annual reports, website, or a combination of them
Discussion Question 5: What could be the overall
to facilitate public access.
timeline for implementation of disclosure / TCFD
c. In view of the evolving developments in climate- framework, and which recommendations should
related disclosures, a “comply-or-explain” be prioritized? Should it begin with disclosure
approach may be adopted by the REs, considering: around the qualitative aspects first, followed by
• the significance of an RE’s operation, including disclosure around quantitative aspects or both
the nature and size of its business, and, together?

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