As the first chemical company in Thailand and only the second chemical company in Southeast Asia, Indorama Ventures has become a Task Force on Climate-Related Financial Disclosures (TCFD) Supporter.
By becoming a supporter, the company indicates that it supports the voluntary recommendation of the TFCD and the organisation's climate change agenda.
The TCFD was created in 2015 by the Financial Stability Board (FSB) to develop consistent climate-related financial risk disclosures for companies, banks, and investors when providing information to stakeholders.
The Task Force, which is chaired by Michael R. Bloomberg, provides recommendations for companies to disclose climate-related risks and opportunities and the financial implications of climate change on their businesses through the TCFD’s globally recognised voluntary disclosure framework.
Increased transparency on climate-related issues, as a result of disclosures, will help to promote more informed financial decision-making by investors, lenders, and insurance underwriters. IVL also conducts scenario analyses that adopt TCFD recommendations as guidelines for climate change strategy. These sensitivity analyses cover impacts on the company's productions, revenues and EBITDA.
"The TCFD is a leading global organisation driving the climate change agenda," said Dr. Deepak Parikh, Chief Strategy Officer at Indorama Ventures.
He noted that joining the list of supporters reflects IVL's commitment to 'enhancing financial disclosures that improve business evaluation, create positive impact to sustainable investment and make economies more resilient and stable'.
"The TCFD recommendations are recognised worldwide for risk management related to climate change and also a meaningful step in IVL's global sustainability," he said.
One of the benefits envisaged for companies opting to implement the TCFD recommendations was to ensure easier or better access to capital by increasing investors’ and lenders’ confidence that the company’s climate-related risks are appropriately assessed and managed.
The recommendations also make meeting existing disclosure requirements to report material information in financial filings more effective, while at the same time increasing the awareness and understanding of climate-related risks and opportunities within the company. This will lead to better risk management and more informed strategic planning.
For IVL, following the TCFD recommendations, has meant applying the AQUEDUCT water risk atlas to forecast changes in future water stress and to identify sites that face the most significant risk of water demand and supply in the future. The results of these studies have been incorporated into the company's long-term adoption measures, enabling management to make informed and lasting decisions for IVL's sustainability.
Furthermore, transparent disclosures have enabled financial institutions, ESG funds, and investors to better access IVL's data, thus providing adequate information for investment decisions.
As of June 2020, more than 1,300 organisations around the world are official supporters of the TCFD. Supporting organisations and companies span the public and private sectors and include corporations, national governments, government ministries, central banks, regulators, stock exchanges and credit rating agencies.
By publicly declaring their support for the TCFD and its recommendations, these companies and organisations demonstrate their commitment to building a more resilient financial system through climate-related disclosure.