TCFD: Philippines and Singapore falling behind

A lack of climate risk expertise and data are the main obstacles for climate financial disclosure in the Philippines and Singapore, according to a new report published this week by risk advisory and insurance broker, WTW.

With Southeast Asia being one of the most vulnerable regions to climate change, companies in two of its markets, Singapore and the Philippines, are increasingly aware of the financial impact of climate change but are falling behind schedule with TCFD preparations.

Two-thirds of respondents have had discussions on the financial impact of climate change at the board level, and half of the firms polled consider climate change as part of their sustainability agenda – 25 per cent of which view it as a key strategic issue.

More than half of the Singapore respondents have a process for identifying, assessing and managing climate-related risks and opportunities. In the Philippines, 24 per cent of firms have disclosed or are ready to disclose their processes for identifying, assessing and managing climate-related risks or opportunities. More than half of the Philippine respondents (55 per cent) intend to disclose this information but need to do more preparation.

“Given the specialist nature of the work, it is not surprising that companies lack certain capabilities to support TCFD implementation. Looking ahead, we can expect to see heightened stakeholder attention on climate-related risk management in the region,” said James Wong, director of strategic risk consulting, Asia, WTW.

From 2023, listed companies in Singapore will progressively be required to disclose their climate-related risks based on Task Force on Climate-related Financial Disclosure recommendations, while those in the Philippines will be required to comply with the sustainability reporting guidelines set by the country’s Securities and Exchange Commission.

Key challenges faced by companies include a shortage of in-house capability on climate risk. followed by a lack of data availability and standardised metrics. Closely linked to these challenges are areas where companies expect to need the most support for TCFD implementation. Half of companies see scenario modelling as a key area where advice and external support is needed. Other key areas include setting climate-related metrics and targets; conducting a transition risk assessment; and identifying an approach or format for TCFD reporting.

    Share Story:

Recent Stories