Moody's Released its Annual Task Force on Climate-Related Financial Disclosures Report

Moody’s has recently presented its annual Task Force on Climate-related Financial Disclosures report. This publication is Moody’s fifth annual TCFD Report, which builds on the commitments and initiatives set out in Moody’s 2021 TCFD Report and emphasizes the Company’s role in building resilient financial markets. As an industry leader in sustainability, Moody’s is dedicated to accelerating market transformation to create more inclusive, sustainable economies.

The highlights of the 2022 Report include:

GOVERNANCE:

Moody’s participation in GFANZ signals the Company’s commitment to align all relevant products and services to achieve net-zero greenhouse gas (GHG) emissions.
Increased alignment of executive compensation with sustainability metrics, thereby incentivizing leaders to prioritize and advance sustainability initiatives.

STRATEGY:

Achievement of the CDP A-List for the third consecutive year.
Renewal of Moody’s nonfinancial materiality assessment to identify topics most relevant to internal and external stakeholders, as well as Moody’s continued business success.
Integration of enhanced climate capabilities in several of Moody’s flagship solutions, including enhanced Moody’s RMS modeling of physical risk hazards and the quantification of financial impact associated with climate catastrophes.
Participation in the Climate Data Steering Committee to help make climate transition-related data openly available in a single place for the first time.
An advanced physical risk analysis, which quantifies climate-related financial impacts associated with climate catastrophes for global offices, data centers and remote work using the latest modeling from Moody’s RMS.
An expanded critical supplier climate risk analysis, both in terms of coverage and the risk criteria assessed.
Enhancement of Moody’s climate-adjusted probability of default analysis to evaluate the financial impacts of respective physical and transition risks under different climate scenarios.

RISK MANAGEMENT:

Expansion of Moody’s disclosure on the Company’s climate risk identification and management process for enhanced transparency.
Guidance provided to employees via Moody’s business resilience planning for any issues that may impact ability to work remotely, such as physical climate risk.

METRICS & TARGETS:

Progress on Moody’s science-based targets, including:

92% reduction of Scope 1 and Scope 2 emissions from 2019 base year (50% target by 2030)
68% reduction of Scope 3 business travel, employee commuting and fuel- and energy-related activities emissions from 2019 base year (15% target by 2025)
49% of supplier spend covered by sciencebased targets (60% target by 2025)
100% of continued renewable electricity sourcing for Moody’s global operations, and ongoing offsetting for remaining operational emissions.