But a lack of data and transparency in this area has raised fears of greenwashing and concerns over misselling.
Just this morning, warning bells were sounded that investors could be misled when choosing climate-related funds as a third of low-carbon portfolios were found to hold oil and gas stocks.
Chancellor Rishi Sunak last month pledged to "go further" than the TCFD’s recommendations and set out a roadmap that by 2025, large companies and financial institutions in the UK would be mandated to disclose the threats to their business from climate change.
He also said the government would implement a new ‘green taxonomy’ — something the industry has long called for in the environmental, social and governance investing world — that would robustly classify what is meant by ‘green’.
Jane Goodland, corporate affairs director at Quilter, said: “Climate change is undoubtedly one of the greatest challenges we face and it is absolutely right that regulators engage with climate risk as a threat to financial stability.
"The new rules aim to address the fact that, increasingly, investors want to commit their money to companies and projects that will support the transition to a low-carbon economy. It is right to push for greater transparency about how issuers of listed securities may be impacted by climate-related risks and it will help to ensure that securities are more accurately priced."
She added: "Quilter already has plans in place to address these recommendations as we intend to align with TCFD in future reports, however we recognise that full alignment is a substantial undertaking and as such may take a few reporting cycles.”
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