Our commitment to Climate-related Financial Disclosure

by the Responsible Investment Competence Centre (RICC)


In ’18, DPAM became a full signatory of the Task force on Climate-related Financial Disclosure (TCFD) recommendations, which encourages investors to identify, integrate and mitigate climate risks. The publication of DPAM’s first report on its approach to climate-related risks marks the company’s commitment to transparency, and strong conviction to the causes set out in the TCFD.

Over the past decade, climate change has had an increasingly severe impact on the world. Hence, we believe that climate-related challenges have become a crucial factor in any investment processes, since these can pose significant risks to our investments and society at large.

In ’18, DPAM became a signatory of the TCFD as set out by the Financial Stability Board to actively promote thorough investment-, credit-, and insurance-underwriting decisions. The recommendations represent a voluntary, consistent, accessible, and international framework to report on/disclose climate-related financial risk (recommendations) and improve risk management and opportunity identification. They constitute a common language for organizations with public debt or equity (in sectors like energy, transportation, agriculture/food/forest, materials and buildings), and asset managers/owners, banks, insurance companies.

In addition, we also joined the Climate Action 100+ (CA100+) collaborative engagement initiative in June ‘19. As a long-term, responsible asset manager, we are in a unique position to enhance our investment process through these commitments. They allow us to constructively engage with our investees, facilitate the energy transition, and inspire us to champion a sustainable future. To successfully implement these recommendations in our investment process, we rely on a step-by-step, ‘learning-by-doing’ approach. We do not only disclose our efforts and reveal our progress on this journey, but also make sure to acknowledge areas for future improvement.

As part of this engagement, we have published our first TCFD report 2019, which describes our approach to managing climate-related risk (i.e. identifying, integrating and mitigating) and seizing opportunities (i.e. supporting the transition and financing solutions). The implementation of the TCFD principles is a multi-year process.

At DPAM, the TCFD process started in ‘19 (year one), which serves as our baseline. The framework consists of four pillars:

  1. Governance: focuses on board oversight and the role of management.
  2. Strategy: focuses on the process of risk identification and its link with asset allocation and performance assessment. Moreover, it also takes into consideration the use of scenario analysis to assess the resilience of an investment strategy.
  3. Risk Management: includes risk materiality assessment, data identification and use, risk measurement and prioritization.
  4. Metrics & targets: focuses on the use of metrics to understand and manage risks and opportunities.

As of 2020, DPAM plans to improve its TCFD implementation process by broadening the scope of its assessments on different levels.


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