In addition, many methods fail to take account of the risk dimension that prevails in the real economy. They often use as a starting point yields on government bonds which are regularly deemed riskless. But the concept of the natural rate refers to characteristics of the real economy, so it would be appropriate to apply a risk-bearing return on capital.
The Task Force developed recommendations and guidance for helping businesses to disclose climate-related financial risks and opportunities in the context of their existing disclosure requirements. Their standard aims to provide the information that investors, lenders and insurance underwriters need to appropriately assess the sustainability of business models by adequately pricing future risks and opportunities in a low-carbon economy.