Companies in Action
McCormick utilizes the CDP framework to disclose the company’s financial risks related to climate change. Investors are increasingly calling for companies to provide detailed disclosure on the financial risks of climate change. Utilizing the CDP framework, McCormick outlines “reduced revenue from decreased production capacity” caused by severe weather events and changes in precipitation patterns as the greatest climate related financial risk facing the company. McCormick goes on to provide a dollar estimate for the potential financial harm these climate impacts could cause, as well as the management methods it is pursuing to lessen harm caused to both the company and its farmers. Along these lines, McCormick identified an opportunity to address these risks and build resiliency among its small holder farmers by collaborating with the Rainforest Alliance to implement Climate Smart Agriculture, leading it to set a goal for all of its farming partners to be Rainforest Alliance certified by 2025.
Bank of America explores the financial risks of climate change across a broad set of sectors and risks through the TCFD framework. Responding to a growing demand for decision-useful climate information by investors and financial regulators, the Task Force on Climate-related Financial Disclosures (TCFD) in 2017 released recommendations that provide a voluntary framework organizations can use to develop more effective climate-related financial disclosures. The Bank of America’s report, Responsible Growth and a Low Carbon Economy, stands out as a leading application of the TCFD framework. It uses a systematic mapping exercise to identify at-risk sectors based on attributes, including historical greenhouse gas emissions, the sensitivity of revenue to climate impacts, the technology and operations changes that are needed and the availability of insurance. The report also provides useful disclosure on how the bank is thinking about different kinds of climate risk described in the TCFD framework. This makes for the most comprehensive report so far by a U.S. bank, giving stakeholders a full view of the bank's portfolio rather than a narrow focus on specific sectors. The report is also candid about areas where further work is needed, providing a decision-useful picture of how Bank of America is moving toward its ultimate goal of aligning its business with the Paris Climate Agreement.
JetBlue releases joint SASB and TCFD report and underscores the value of sustainability for the business through its financial filings. In 2017, JetBlue became one of the first U.S. publicly traded companies to publish disclosures aligned to the SASB guidance. A year later, it was again among the first companies to release a joint SASB and TCFD report. In its 2019 report, the company used the SASB standards for the airline industry. In the report, which is easily accessible from the company’s investor relations website, JetBlue highlights the financial risks presented by a changing climate and steps it has taken to prepare for these risks, including the development of a scenario analysis. The company’s disclosure goes on to describe how JetBlue’s attention to and integration of ESG issues into its business helps the company not only protect, but also increase financial returns. The report provides an overview of JetBlue’s long-term strategy, which includes mitigating ESG risk, investing in more fuel-efficient aircraft and technology and fueling the aviation talent pipeline of the future. This reporting is complemented by the company’s disclosure in its 2019 proxy statement, which specifies the top sustainability issues discussed by JetBlue's Governance and Nominating Committee in 2018, and the 2019 10-K, where climate change is specifically cited as a financial risk for the company.