Investors across Australia, New Zealand and Asia have welcomed the release of the Financial Stability Board Taskforce on Climate-Related Financial Disclosures (TCFD) final recommendations.

This industry-led taskforce, originally established under the G20, demonstrates that businesses are developing their own response to climate change as a commercial reality, separate to the policy response. 

Emma Herd, CEO of the Investor Group on Climate Change, welcomes the release of the final TCFD recommendations and calls it a significant milestone in this space.

"Investors see climate change as a material financial risk and are calling on businesses to disclose their 2 degrees Celsius strategy," Herd said.

"Boards need to plan for managing climate change risks and opportunities that shareholders can see.

"Having a globally consistent framework for reporting on material climate change risks will accelerate this trend." 

Adrian Orr, CEO of NZ Super Fund also welcomes the release if the TCFD's final report, calling it an important and useful step forward.

"Globally, many leading institutional investors are moving to increase the resilience of their portfolios to climate change risk, and to look for opportunities resulting from the transition to a low-carbon global economy," Orr adds. 

The TCFD recommendations provide a comprehensive framework to help corporates identity climate change related risks and opportunities and disclose information needed by investors.

The recommendations provide flexible guidance to companies on how to communicate these risks and what they are doing to manage them, as better disclosure is important to investors in better understanding and managing carbon risk. 

According to head of responsible investment Asia Pacific at Colonial First State Global Asset Management Pablo Berrutti, transparently reporting financial risks and opportunities is a vital part of a business' response to climate change.

"As investors, our role is to identify climate change impacts across our portfolio and implement strategies in response," Berrutti said. 

"The release of the final TCFD recommendations is a significant milestone as industry gets on with the business of decarbonisation and adapting to the effects of climate change." 

The TCFD framework also provides useful tools for investors aiming to increase their own disclosure on how they are managing climate change risks and opportunities across their portfolio and investment strategies.

Emma Pringle, head of customer governance & sustainability at BT Financial Group, calls the recommendations of the TCFD a sensible way to help investors assess the influence of climate-related impacts on the performance of their portfolios.

"We know more than 90% of Australians believe sustainable investing is important, with almost one in five also saying it is extremely important for their investments to be in a sustainable companies," Pringle said.

"It strongly supports the work BT has already undertaken to give investors greater visibility of sustainability risks."

IGCC and AIGCC recently released a joint guide to investor disclosure - Transparency in Transition - setting out current and emerging practice for investors disclosing their climate change response.

The final TCFD report will be preserved to the Financial Stability Board at the G20, which will take place on July 7-8 in Hamburg, Germany.