Climate-related Reporting Services for Financial Institutions

The financial sector has been pivotal to climate change mitigation and adaptation by mobilizing and shifting capital to decarbonize the economy. The financial industry itself also increasingly realized the importance of preparing itself to negative effects and growth momentums brought by climate-related risks and opportunities. In this regard, the market has witnessed relevant regulatory requirements and public expectations escalating. Financial institutions are expected to enhance climate- and environment-related disclosures and related management for its sustainable development.

Task Force on Climate-related Financial Disclosures (TCFD) recommendations and evolving regulatory landscape

In 2015 when the Paris Agreement was adopted, the Financial Stability Board (FSB) launched TCFD. In 2017, the TCFD released its recommendations on climate-related financial disclosures with four core elements – governance, strategy, risk management, and metrics and targets. Nowadays, the TCFD recommendations are becoming one of the most important reporting frameworks. Regulators around the world also released guidelines and regulations and set timelines for financial institutions to align with regulatory requirements and improve transparency.

  • Mainland China: The People’s Bank of China (PBOC) issued Guidelines on Environmental Information Disclosure for Financial Institutions. The Shenzhen Municipal People’s Government released the Mainland China’s first set of regulations to govern green finance development.
  • Hong Kong SAR: The Green and Sustainable Finance Cross-Agency Steering Group announced that climate-related disclosures aligned with the TCFD recommendations will be mandatory across relevant sectors by 2025. Hong Kong Securities and Futures Commission (SFC), Hong Kong Monetary Authority (HKMA), and Mandatory Provident Fund Scheme Authority (MPFA) released climate-related disclosure requirements based on TCFD, i.e., Circular to licensed corporations – Management and disclosure of climate-related risks by fund managers, a new Supervisory Policy Manual (SPM) module GS-1 on “Climate Risk Management”, and Principles for Adopting Sustainable Investing in the Investment and Risk management Processes of MPF Funds.
  • Singapore: The Monetary Authority Singapore (MAS) issued the Guidelines on Environmental Risk Management (ERM Guidelines) for banks, insurers, and asset managers. The financial institutions are expected to apply the ERM Guidelines from June 2022.
  • European Union (EU): The European Banking Authority (EBA) will require large banks to disclose climate-related information and their plans to address climate risks under the EBA’s comprehensive implementing technical standards. The banks will have to comply with the regulatory requirements by early 2023. The EU Sustainable Finance Disclosure Regulation (SFDR) requires financial market participants and financial advisers to disclose environmental, social and governance (ESG) metrics at both entity- and product-level.
  • United States (US): The Securities and Exchange Commission (SEC) of the United States proposed rules to enhance and standardize climate-related disclosures for investors.

Climate- and environment-related disclosures are in the direction towards mandatory.

The reporting services aims to fully support different financial institutions in complying with evolving regulatory requirements. The detailed services include but not limited to:

Reporting services

Financial institutions

Brief descriptions

TCFD reporting servicesAll organizations worldwideThe TCFD reporting will be based on the TCFD recommendations.
Principles for Responsible Investment (PRI) reporting servicesAsset owners and investment managers worldwidePRI signatories are required to report on information related to responsible investing.
Environmental information reporting services aligned with Guidelines on Environmental Information Disclosure for Financial Institutions by PBOCAll financial institutions established in the People’s Republic of ChinaThe environmental information disclosure covers governance structure, policies and systems, products and services innovation, risk management process, impacts of environmental factors on the organization, environmental impact of the investment and financing activities, operational environmental footprint, etc.
Environmental benefits reporting services aligned with Notes on the Green Credit Statistics Information Disclosure by China Banking and Insurance Regulatory Commission (CBIRC)Commercial banks

Through data collection and calculation, we help financial institutions report on environmental benefits related to financing activities. The environmental benefits include reduction in coal equivalent, CO2 equivalent, NH3-N, SO2, NOx, PM2.5, VOCs, TN, TP, and water saving.

HKMA GS-1 reporting servicesAll Authorized Institutions (AIs) by HKMAAIs are required to disclose key elements of climate-related risk management.
MPFA related reporting servicesMPF trusteesMPF trustees should integrate ESG factors in the investment and risk management processes of MPF funds and make disclosure to MPF scheme members.
Climate-related reporting based on Circular to licensed corporations – Management and disclosure of climate-related risks by fund managersType 9 licensed corporations (LCs) with investment management discretion in respect of collective investment schemes (funds)The disclosure requirements are related to governance, investment management, and risk management. Large Fund Managers are required to disclose portfolio carbon footprints, referring to the Partnership for Carbon Accounting Financials (PCAF) Standard.
SFDR reporting servicesFinancial institutions operating in the EU (banks, insurers, asset managers, and investment businesses)The financial institutions will report on product- and entity-level ESG characteristics starting in 2023, referencing data from the end of 2022.

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