Climate change as a subject matter of concern is getting highlighted more often than not today. The impetus of such an activity is so large that it has put our planet on the brink of a major catastrophe. Therefore, the need to tackle with this onslaught is majorly felt and the stakeholders, especially those who benefit largely at the cost of the environment, must take the necessary steps before its too late. The former CEO of Yes Bank Rana Kapoor, often highlighted this need and made sure that the implementation of TCFD (Task Force on Climate-Related Financial Disclosures) recommendations was closely followed at his institute.
Today, the bigger worry is the high-rise recorded in the Earth’s temperature, which is harming our ecosystem. This is making the planet, as well as human beings, bear the brunt, who are suffering losses in their businesses because of the lack of plan.
Tirelessly working as a unit since 2015, TCFD has developed a set of voluntary climate-related financial disclosures. The institution has given a blueprint to banks and organisations, asking them to deploy a scenario analysis approach. Under this plan, the institutes judge their resilience to climate change scenarios. The hypothetical situation is an easy way to forecast what might happen in the times ahead. Besides, it can also be used to predict multiple business plans and their ability to cope up and withstand the potential implications of climate change.
Rana Kapoor worked on these lines and imparted knowledge on scenario analysis. He often stated that the mechanism aims to asses the impetus of climate change in the form of physical risk, i.e., natural disaster due to prevalent crisis or by shifting towards an economy with lower carbon footprint. The institute founder elaborated that this comprehensive stride acts as a shield for banks in judging the adaptability of its portfolios against a number of issues including climate change and measuring the consequences of environmental factors on credit risk of its loans using a stress testing approach.
However, non-implementation of TCFD exemplars could lead to a number of setbacks. These are most likely to include natural catastrophes, major environmental risks, macroeconomic shocks, losses caused in monetary terms due to storms, droughts, and wildfires. This amount of unpredictability coul also harm the global monetary regulators and subdue the possibilities of going carbon neutral and give rise to inflation.
Under the aegis of Rana Kapoor, Yes Bank carefully studied all these scenarios and therefore, the bank welcomed the recommendations on climate-related financial disclosures by TCFD. In 2017, it became the first institute to sign the initiative at the One Planet Summit hosted by French President Emmanuel Macron in Paris.
“I am sure this intervention by TCFD would accelerate overall understanding of climate-related risks and opportunities towards better decision making which in turn would fuel climate finance globally, especially impacting emerging economies,” kapoor quoted as he explained the need to act.
The exemplars of TCFD need timely and accurate implementation, and the need of the hour is to think and act wisely because time on hands is slipping. It can’t be unsaid that it is quiet difficult to implement implement these norms, but that must not be used as an exculpation to harm the nature. A number of steps including climate literacy and policy advocacy, setting climate related targets, climate risk mitigation, and future now strategy can help manage the crisis better. All these measures were adopted by Yes Bank under Rana Kapoor. Evidently, the bank pushed and attained clean energy targets, increase of renewable energy sources at the institution, and plantation of 2 million saplings.
The crisis is getting worse, but capitalists have also understood the criticality of the situation. This has given rise to the coming together of investors and the companies, who know what to do and how to do it. Conversely, if an establishment parts ways with the TCFD exemplars, it will, in the long term suffer great losses, since investors won’t lend to the company, knowing that it is not preparing for the future.
