One of the key components to consolidate a sustainable financial system is the adoption of reference frameworks for the efficient disclosure of information on environmental, social and governance (ESG) factors. At the Green Finance Consultative Council’s (CCFV) Sustainable Finance Mx 21 forum on December 7, the constitution of the Task Force on Climate-related Financial Disclosures (TCFD) Mexico Consortium was officially announced; it seeks to promote better integration and disclosure of climate change-related financial risks.

Juan Carlos Belausteguigoitia, President of the Consortium, and Alejandro Díaz de León, Governor of Banco de México, agreed on the importance of implementing the TCFD’s recommendations to consolidate alternatives with higher growth and profitability. Thus, as companies that support and implement the recommendations of the TCFD, Manuel Romo, CEO of Citibanamex and Sergio Méndez, General Director of de BlackRock Mexico, assure that the TCFD Mexico Consortium will help many companies to move towards a low carbon economy.

Undoubtedly, the TCFD recommendations have become an obligatory task for companies to learn about climate adaptation and mitigation activities; however, due to their complexity, it is important that a transparent path be provided to achieve it and, ultimately, as Michael Bloomberg, founder of de Bloomberg LP and president of the TCFD stated: “With the support of leaders and experts in business and finance, we can build a more sustainable and resilient economy in Mexico and around the world.”

One of the key components to consolidate a sustainable financial system is the adoption of reference frameworks for the efficient disclosure of ESG information. In this space, the constitution of the TCFD Mexico Consortium was officially announced, an effort led by financial, business and academic sectors in coordination with international cooperation, aiming to promote the adoption and integration of the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).

Initiatives like this are necessary to improve the country’s economic competitiveness and, in the words of Satoshi Ikeda, director of Sustainable Finance at the Japan Financial Services Agency (JFSA), collaboration between companies and finance will increase with the creation of the Consortium–as happened in Japan.

Within the series “Introduction and Implementation Workshops of the Task Force on Climate-related Financial Disclosures” (TCFD), on December 1, the fourth “Climate Risk Quantification” workshop took place. On this occasion, Juan Carlos Belausteguigoitia, president of the TCFD Mexico Consortium, gave the welcome remarks and celebrated the successfully conclusion of the 2021 workshops.

The training for this workshop was provided by Phillip Mettenheimer, director of Financial Services at Oliver Wyman, who mentioned that using climate scenarios within companies facilitates the understanding and prevention of future situations; that is, it provides them with resilience and robustness. In the same vein, he mentioned that “each climate scenario represents a potential future with a complex set of social, political and economic decisions.”

As an example of companies that are already applying these recommendations and designing climate scenarios, Katia García Ulloa from Sustainability and Analysis of Environmental, Social and Climate Risks at CitiBanamex, stated that the financial group has a sustainable strategy for 2050, stating: “Through our strategy, we aim to become the world leader in financing the transition to a more sustainable economy.”

Ulloa shared the lessons learned by Citi in the implementation of climate scenarios and mentioned that there have been great challenges due to lack of information in the country. However, she said: “We are already understanding what information we must request from our clients in order to have the appropriate inputs to improve our analysis.” Despite the fact that, for now, there are no material changes, the specialist assured that in reality, slight changes are already noticeable and will increase over time.

The series of workshops, developed in conjunction with the 2030 Agenda Working Group, GIZ Mexico, and the Green Finance Advisory Council (CCFV),with the support of the British Embassy in Mexico, is being taught virtually and open to all public. The next workshop will be held on 26.01.22. Follow the TCFD Mexico Consortium on Twitter and YouTube to stay tuned for all future events.