The TCFD was set up by the Financial Stability Board with the aim of establishing consistent, high quality climate risk reporting across sectors and regions. Its recommendations, published in 2017, are organised into four key areas: governance, strategy, risk management, and metrics and targets.
Our parent company, BMO Financial Group, is a supporter of these recommendations, and includes information on how it is implementing them within its 2018 Annual Report and ESG Report. Some of the recommendations are specific to asset managers, and BMO Global Asset Management will be publishing a separate statement on how it is applying these to its own activities.
A priority for us in 2018 was engaging with investee companies to encourage them to report in line with the TCFD, since good quality data from companies is essential in informing asset managers’ assessment of risk and opportunity.
We also co-led a working group organised by the Institutional Investors Group on Climate Change on how investors can apply climate scenario analysis to their portfolios. This brought together leading European asset owners and managers to discuss the purpose of scenario analysis; the scenarios available to investors; and analytical techniques to apply these to portfolios. The group published a report in late 20181, and at BMO GAM, we will be working in 2019 to assess how we can implement its findings.