Helsinki Principle 5 Stakeholder Dialogue with COP26 Private Finance Hub on TCFD Recommendations for Measuring Portfolio Alignment
In June 2021, the Task Force in Climate-related Financial Disclosures (TCFD) published two documents for consultation: Proposed Guidance on Climate-related Metrics, Targets, and Transition Plans and Measuring Portfolio Alignment: Technical Supplement, which were shared also with the Coalition. The authors of the latter report, Measuring Portfolio Alignment: Technical Supplement, who are members of the COP26 Private Finance Hub, presented their findings and recommendations to Coalition Members and Institutional Partners in a stakeholder dialogue on September 9, 2021. Members and Institutional Partners then had an opportunity to provide feedback and ask questions. The discussion built previous work of the Helsinki Principle 5 workstream, which over the last year has held two workshops on measuring portfolio alignment and published a Summary for Policymakers on Private Financial Sector Paris Alignment.
The aim of the Measuring Portfolio Alignment: Technical Supplement report is to bring more convergence and transparency to the assessment of portfolio alignment. The findings in this report are not TCFD recommendations, but a guide for best practice in developing forward-looking alignment tools and a description of what is needed to support the further development of these tools. The TCFD is publishing final guidance in October following feedback from consultations. Work on continuing to improve and mainstream portfolio alignment metrics will then be taken on by the Glasgow Financial Alliance for Net Zero (GFANZ) working group. This working group will be responsible for future iterations of TCFD guidance on portfolio alignment metrics.
In the discussion portion of this event, the role of Ministries of Finance in bringing transparency to the financial sector's Paris alignment commitments was discussed. Participants underlined that Ministries of Finance can play an important role in ensuring better data standardization and provision, as well as in supporting the development of appropriate scenarios to assess company alignment with the Paris goals. Overall, the dialogue enhanced Member awareness and understanding on issues related to measuring portfolio alignment with the Paris Agreement.