This page provides highlights of our benchmarking of the climate-related disclosures included in the 2021 annual reports and other standalone reports of 35 major, global banks. We have also benchmarked how banks' disclosures align with the recommended disclosures of the Task Force on Climate-related Disclosures (TCFD).
Given banks’ traditional focus on risk management, it doesn’t come as much of a surprise that most of the banks in our analysis provide detailed disclosure in this area.
What is disclosed in the banks’ annual reports?
Banks are aware of climate-related risks. We can see this in the disclosures made – particularly when it comes to describing the risks they have identified, and disclosing whether these impact their other risks. This is not surprising given the banks’ traditional focus on risk management. Accordingly, we see that 94 per cent of the banks disclose information on risk management in the annual reports.
The nature and extent of information on risk management varies between the banks. The banks with the more detailed disclosures generally provide the following information when compared to those with less detailed disclosures.
- Identifying and describing the climate-related risks and potential business impacts of these, as well as disclosing how the bank is managing its climate-related risks.
- Identifying and describing other risks which are impacted by climate-related risks, in particular describing the impacts on credit risk.
- Whether/how climate-related risks are integrated into the overall risk management framework of identification, assessment, management and reporting of risks.
How does banks’ reporting align to the TCFD recommended disclosures?
The climate-related disclosures made by most banks are relatively more advanced for the three TCFD recommended disclosures on risk management.
It is clear from the 2021 disclosures that banks are focussed on enhancing their risk management frameworks and processes. Similar to governance, the question now is how effective are these enhancements at addressing climate-related risks? Due to the limited quantitative disclosures on areas such as scenario analysis and financed emissions, it is challenging at this stage to assess their impact.
Find out more - Read our analysis
Read our benchmarking analysis on how banks reported on climate-related matters in the 2021 reporting season. The reports include the scope and approach of our analysis. See phase 1 on how we have assessed the disclosures as ‘more detailed’, ‘less detailed’ or ‘no disclosures’ provided and phase 2 for the maturity scale we used to assess banks’ climate-related disclosures.
© 2022 KPMG IFRG Limited, a UK company, limited by guarantee. All rights reserved.