• Adaptation

Enabling Resilient Economy and Industry with Improvement of Climate Risk Financing and  investments - Financial Disclosure of physical climate risks: pros and cons-


  • Ministry of the Environment, Japan
  • Global Adaptation Network(GAN)

Event Overview

To realize the resilient society and economy globally, it’s imperative to have a point of view on how to internalize climate change risk into the current mechanism for financing and investments effectively.
In this session, we start from the result of 6th APAN Forum held on 17th -19th October 2018, especially output from a series of sessions related to “Financing and Investments” which enables resilient society, ecosystem and industry.
And the Financial Stability Board established the Taskforce on Climate Related Financial Disclosures (TCFD). The report of the TCFD recommended that investment institutions and corporations should disclose the risks they face from climate change impacts (‘physical climate risks’). This has catalyzed consideration of the guidance that might be developed for such disclosure. This meeting will consider questions such as:

  • What information should be disclosed?
  • Is it possible to develop guidance on physical climate risks?
  • Should such guidance be voluntary or mandatory?
  • What are the pros and cons of increased disclosure?
  • Will increased disclosure of climate risks catalyse disinvestment from vulnerable countries and sectors?
  • What can be done to reduce the possibility of disinvestment in vulnerable countries?

This side event is organized by Global Adaptation Network (GAN) who is aiming with dissemination of useful adaptation knowledge and experience. “How to involve private sector” and setting adequate environment for climate risk financing is one of key issues have been discussed continuously by GAN recognizing as a tagger which have potential to dramatically change.


  • Hiroshi Ono, Deputy-Director General for Global Environmental Affairs, Ministry of the Environment, Japan
  • Barney Dickson, Director, Strategy and Policy, Global Adaptation Network (GAN) / Global Commission for Adaptation (GCA)
  • Mari Yoshitaka, Chief Environmental & Social Strategist, Environmental Strategy Advisory Division, Mitsubishi UFJ Morgan Stanley Securities Co., Ltd.
  • Craig Davies, Senior Manager (Climate Change Adaptation), European Bank of Reconstruction and Development
  • Mozaharul Alam, Regional Coordinator, UN Environment Regional Office for Asia Pacific (APAN Secretariat)
  • Miroslav Petkov, Director, Financial Services Environmental and Climate Risk Research, S&P Global
  • Rishikesh Ram Bhandary, Center for International Environment and Resource Policy, Fletcher School of Law and Diplomacy

Event Summary

Barney Dickson from GAN introduced the meeting and the panel members, thanking the Government of Japan and the Ministry of Environment in particular for its support to the Global Adaptation Network. He noted that the meeting builds on the GAN side event at COP 23, which focused on the role of the private sector in adaptation.
Mozaharul Alam from APAN reported on the outcome of the APAN Forum held in Manila in October, with around 1,300 participants from 60 countries. He noted the considerable interest in the role of the private sector in adaptation and that it was important to explore and mobilize both traditional and non-traditional sources of climate finance, such as blended finance and innovative sources, including within the private sector, to scale-up climate finance and investment to match urgent needs.
Craig Davies from ERDB noted the need for ‘opportunity’ disclosure as well as ‘risk’ disclosure. He said we needed approaches and metrics for signalling the benefits and opportunities associated with making assets and operations more resilient to climate change impacts. He also emphasised the importance of setting out clearly the differences between corporate-level climate-related disclosures and sovereign risk ratings. He said that these are happening on very different levels with arguably few direct interconnections, so it is important not to mix them up.
Mari Yoshitaka from MUFJ noted that the work of TCFD was not as well-known in Japan as in other places, although awareness was growing, particularly within financial institutions. She said that it was important to focus on the 'opportunities' businesses face in adaptation which, in addition to the 'risks', is one of the climate change impacts that TCFD recommends businesses to disclose. She also emphasized the potential of green bonds to address the issues of physical climate risk and adaptation.
Miroslav Petkov from S&P noted that the disclosure of physical climate risks is important for the the ratings agencies and that they will increasingly be using this information to inform their rates. He also noted that some of the key challenges related to how disclosure will be put into practice.
Rishikesh Ram Bhandary from the Fletcher School of Law and Diplomacy, reported on research he and colleagues have undertaken on the importance of disclosure in driving the behaviour of corporate sectors and shaping the investments they do and do not make. He also noted that increasing disclosure is likely to impact different sectors differently. Finally, he emphasized that the behavior of many corporations is driven by the behavior of their peers and competitors. If a sector leader starts to disclose climate risks and opportunities, other companies in the sector are likely to follow suit.
Hiroshi Ono thanked the speakers for their contributions on this important topic. He noted that disclosure of risks and opportunities around physical climate risk will be important in driving company behavior. He said that GAN and APAN will continue to work to raise awareness, and share knowledge and expertise, on the importance of adaptation in general and the issue of disclosure in particular.


  • Corporate disclosure of physical climate risks can be an important mechanism for ensuring increased attention on climate adaptation. Awareness of disclosure issues is growing.
  • Disclosure of opportunities is as important as disclosure of risks.
  • There is an urgent need to develop metrics for measuring physical climate change impact costs and the benefits that building climate resilience can bring.
  • There is considerable potential for Green Bonds to address the issues of physical climate risks and adaptation to those risks.
Photo of the panel discussion
Photo of the event venue

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