Misplaced expectations from climate disclosure initiatives

Disclosure of climate risk to investments was expected to drive divestment from high-carbon assets. This Perspective considers the limitations of transparency to shift investment and the different markets of low- and high-carbon assets; mobilizing finance requires more than disclosure. The financial sector's response to pressures around climate change has emphasized the role of disclosure, notably through the recommendations of the Financial Stability Board's Task Force on Climate-related Financial Disclosures. This Perspective examines two dimensions of the expectations behind transparency and disclosure initiatives: the belief that disinvestment is driven by disclosure; and that investment 'switches' from high- to low-carbon assets. We warn about the risk of disappointment from inflated expectations about what transparency can really deliver and suggest some areas that research and public policy should examine to mobilize the required capital to meet climate goals.