Today, we announced that all of our Members, the world’s most forward-thinking gold miners, have committed to reporting their positions and progress on climate-related risks in line with the recommendations of Taskforce for Climate-related Financial Disclosures (TCFD).
In 2017, TCFD introduced a framework to improve public disclosure of climate-related financial information, and help companies better structure their internal approach to assessing climate risks and opportunities. The TCFD’s recommendations have since become widely accepted as the preferred method for embedding climate change into the governance, strategy and risk management systems of organisations. The disclosure of relevant information on corporate preparedness for - and progress on - these key issues is helping investors and other stakeholders better understand how a company is performing when it comes to climate change and, specifically, how it is managing its risks.
While the TCFD recommendations were defined as voluntary, they are increasingly becoming compulsory. The UK announced last year that it would become the first G20 country to make TCFD-aligned reporting mandatory across the economy, by 2025. This summer, in June 2021, the G7 announced its support for similar mandatory climate reporting based on the TCFD framework, and it is widely expect other countries, and many of the world’s stock exchanges, will move in the same direction.
It is clear that governments, regulators, investors and companies have rapidly recognised the significant benefits offered by a standardised approach to disclosing climate-related risks and opportunities. A wide range of recent investment policy initiatives – such as the UK’s pension regulations – already make reference to TCFD. And the commitment to disclose, and the quality of the associated reporting, are already key indicators and metrics in how companies are now evaluated and rated.
However, although these recommendations reflect a global push for standardisation and consistency, the TCFD also recognises that this is not an easy task and that the process of building capacity, collating data and implementing disclosure will likely progress along different timelines for different organisations.
But what, specifically, are the advantages of TCFD for our Members? Why do we believe gold miners should commit to these recommendations?
The gold mining sector has improved its ESG reporting a lot in recent years and this new unified approach on climate reporting further clarifies the commitments already embedded in our Responsible Gold Mining Principles (RGMPs), which require companies to take action to combat climate change and report in line with accepted standards.
By committing to TCFD reporting our members can help maintain the sector’s credibility and help ensure that investors understand that the leading gold mining companies (as represented by the WGC Membership), have fully considered their climate-related impacts - and the potential climate-related risks on their businesses - at a strategic level. It will also help communicate the sector's opportunity to contribute positively to decarbonisation and the wider benefits its actions may have on host countries and communities.
And it’s clear that starting now, to ensure that TCFD disclosure becomes part of ‘business as usual’, will help our members build the resources and plan for how to respond to climate risks in ways which should benefit their businesses in future, and allow them to demonstrate commitment to corporate transparency on climate-related issues in advance of further mandatory requirements.
So, this announcement today is a clear demonstration that the gold mining sector is committed to working together, in a transparent way, to ensure progress on climate change and in response to societal and investor expectations.