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G7 nations back move to make it mandatory for companies to disclose their climate risk

The wealthy G7 countries on Saturday moved closer to mandatory disclosure of companies’ climate impact despite a lack of global agreement and doubts from some NGOs. “We support moving towards mandatory climate-related financial disclosures,” their finance ministers said in a statement released after two days of meetings, adding that this would “provide consistent and decision-useful information for market participants”.

The idea backed by the UK, the US, Canada, France, Germany, Italy, and Japan would make it mandatory for all major companies to come clean on, for example, their carbon dioxide emissions – a crucial aspect of the transition towards cleaner energy. Such regulations would help companies assess the financial impact of the climate crisis and make necessary changes as their countries set ambitious targets such as becoming carbon neutral by 2050. It would also help investors who offer financing to large groups and take an ever closer interest in the impact of the climate on businesses, both in terms of performance and reputation.

The G7 says it is following the recommendations of the taskforce on climate-related financial disclosures (TCFD), put in place in 2017 with members from across the G20.

The finance ministers went even further by hailing the creation of a taskforce on nature-related financial disclosures, which covers not only the climate but also nature and biodiversity.

The challenge is that every country takes responsibility and imposes measures on its own companies, and so there has to be agreement on accounting rules.

Britain already plans to force companies to go public on their environmental impact from 2025 – with the government claiming this makes it the most progressive country in the G20.

Nevertheless, disclosing such information will not be mandatory at first, and businesses in the country are only required to publish the data or explain why they are not doing so.

Molly Aronson

Molly Aronson is a 26-year-old government politician who enjoys bowling, running and jigsaw puzzles. She is creative and exciting, but can also be very greedy and a bit greedy.She is an australian Christian who defines herself as straight. She has a post-graduate degree in philosophy, politics and economics. She is allergic to grasshoppers.

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