London CIV publishes its 2023 TCFD Report

Real sense of optimism and progress as London CIV publishes annual TCFD Report 

The newly published Task Force on Climate-Related Financial Disclosures (TCFD) report from London CIV serves as a useful framework to describe LCIV’s journey towards improving the resilience of our funds to climate-related risks. We will continue to prioritise climate change issues at London CIV and aim for improved disclosure in the next reporting year. 

Responsible Investment Manager Gustave Loriot says: “By the end of the COP26 summit in Glasgow last year, there was a real sense of optimism and progress. Hundreds of countries pledged to halt deforestation, reduce methane emissions, and phase down coal and fossil fuel subsidies - marking the first-time governments had come forward with targets of sufficient ambition to keep global warming below 2°C.

“But in 2022, the fossil fuel empire struck back. Russia’s invasion of Ukraine sparked a global energy crisis and triggered a surge in oil and gas prices, fuelling record profits for the industry1. Energy companies capitalised on these earnings by completing share buybacks and increasing dividends, which in turn rewarded investors with strong returns in an otherwise dismal stock market. Naturally, this provided Oil & Gas companies with a sense of vindication, and a revived mandate to increase investments towards fossil fuel capacity expansion - far beyond the boundaries of the Paris Agreement. Headlines in Ukraine also eclipsed the climate disasters experienced in various parts of the world.

“Pakistan suffered catastrophic flooding which affected more than 33 million people. Dangerous heatwaves and droughts scorched parts of China and Southern Europe. In the UK, temperatures rose above 40°C for the first time, and in the US Hurricane Ian became the deadliest hurricane since Katrina in 2005. These events, including many others have placed 2022 as the most expensive year for climate-related disasters in history. The climate equation remains simple: to keep the window open for 1.5°C, we must cut our emissions in half by 2030, but last year global greenhouse gas emissions continued to increase to new record levels. Despite the urgency of the problem, this year’s COP27 climate summit in Egypt ended in ‘disappointment’ for many, as it failed to deliver an agreement on how to phase out fossil fuels. The optimistic view, however, is that the war in Ukraine has lent a new sense of urgency to the transition away from oil, gas, and coal.

“Today, investors know that the climate crisis poses a material risk to their portfolios, and the challenging market conditions of last year, amplified by the geopolitical and macroeconomic uncertainty, is only a temporary setback, not an irreversible trend. The tectonic shift to sustainable investing is set to endure. Companies that are on the pathway to creating a net-zero economy will thrive and those who are left behind may not survive, while demand for climate-relevant investment solutions will only escalate”.

Dean Bowden, CEO of London CIV added: "I'm proud to announce the release of our TCFD report, a milestone that underscores our unwavering commitment to addressing climate change. We firmly believe that measurement is the compass that guides effective risk management. Just as we've recognised the importance of climate risk, we're equally excited to declare ourselves proud signatories of the TNFD. With this step, we demonstrate our dedication to a holistic approach to sustainability. As we continue to grow and evolve, we eagerly anticipate integrating nature-related risk into our reporting, ensuring that we stand at the forefront of responsible and comprehensive environmental stewardship."

You can read the report here