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A global task force’s efforts to create new disclosure guidelines for the world’s financial industry – including insurers in the U.S. and abroad – are far from the first attempt to urge companies to be open with the public about the risks they face from climate change.

Yet those involved with drafting them are calling them a “game changer.”

The result of the work being undertaken by the Financial Stability Board Task Force on Climate-related Financial Disclosures – a 31-member board that includes users and preparers of disclosures covering a range of economic sectors and financial markets – will have the ultimate effect of “mainstreaming climate into finance,” according to its members.

There are a few reasons those on the task force are confident that what they are doing will have an impact.

The influence of the task force and the FSB is noteworthy.

Michael Bloomberg chairs the task force. The FSB reports on financial regulatory reforms to leaders in the G20, which is comprised of the governments and central bank governors from 20 major economies.

In its efforts to formulate the guidelines the task force is considering the physical, liability and transition risks associated with climate change, as well as what constitutes effective financial disclosures across industries.

Members of the task force will meet next week in Paris to talk about their work, including a presentation of Phase I of the report, which was first released in March. That laid out the objectives for the proposed work and fundamental principles of disclosure.

In November the final guidelines, to be outlined in Phase II, are set to be presented to the FSB, and then they’re expected to be published in December.

The guidelines for voluntary disclosure will identify “leading practices to improve consistency, accessibility, clarity, and usefulness of climate-related financial reporting,” the task force objectives state.

Seeking climate risk disclosure is a hot topic, but it still might come as a surprise just how pervasive these efforts have been on myriad levels.

“We counted 400 different climate disclosure regimes,” said task force member Christian Thimann, group head of strategy, sustainability and public affairs with French insurer AXA.

The task force took its count from the 2015 report “Climate Change Disclosure In G20 Countries: Stocktaking of corporate reporting schemes” produced by the Organisation for Economic Co-operation and Development, which counts the number of climate or sustainability disclosures created by industry groups, non-governmental organizations, stock exchanges, regulators and international organizations.

“It’s not that there’s nothing out there,” Thimann said. “There’s a lot out there, but it’s not consistent.”

Thimann and others on the task force view the guidelines as a “game changer” in financial markets. One day that is. Thimann made a point to emphasize the word “gradual” when speaking of changes the guidelines are intended to usher in.

“We don’t want to cause havoc in the financial markets,” he said.

Change, gradual or otherwise, is what insurers should expect after the guidelines are introduced, said fellow task force member Andreas Spiegel, head of group sustainability for Swiss Re.

“They should certainly expect that with these guidelines there’s an increased expectation to integrate climate-related financial reporting into the standard financial reporting process,” Spiegel said.

Insurers should also expect to be asked to disclose both liabilities and investments in potential “stranded assets,” both board members said.

“Stranded assets” is a term commonly used by other entities seeking to create climate-related disclosures, particularly those calling for insurer disclosures.

However, these guidelines shouldn’t be considered just another in a sea of guideline wish lists aimed at generating climate-related reporting, which includes efforts domestically – Washington’s insurance commissioner for some time has been pushing for more insurer disclosure and divestments in dirty energy as has California’s insurance commissioner.

It’s true the guidelines are “voluntary,” as both Spiegel and Thimann made it a point to note, but it should also be noted they are being formed under the auspices of the influential FSB.

Spiegel added: “The guidelines will be phrased in a way that they will be quite adoption-ready for regulators to pick up, but also the stock exchanges can adopt these guidelines as well.”

Those are two among several reasons Spiegel believes the guidelines will have the teeth that other existing guidelines may be lacking.

“In my view it will be a game changer in the way climate change is treated,” Spiegel said.

Past columns:

• How Monsanto’s Climate Unit Is Changing Risk Profile of Farmers
• Climate Change And Gisele, The Law of the Land
• Climate Change Modeling is Closer than You Think
• Climate Change Exposes U.S. Infrastructure to Natural Hazards, Rand Corp. Says
• Brexit, Climate Change and Clean Air

Topics Climate Change