The FCA, the TCFD guidelines, and dread

The CFA Institute isn’t where you go to throw your weight around. A professional membership organisation for finance types that launched the Chartered Financial Analyst exams in 1963, its august halls of scholarship are mostly notional outside of its Virginia, USA headquarters. British outpost CFA UK occupies a no-frills office above a Sainsbury’s in the shadow of the decidedly classier Walkie-Talkie (or, less colloquially, 20 Fenchurch Street). Picture industrial carpet and fluorescent lights instead of high ceilings or polished floors that accentuate the clarion pok!-pok!-pok! of power-walking.

Its pre-Covid events took place in borrowed spaces, and contributions to the institute’s thought leadership are open to just about any unpaid member with a keyboard. The capital markets populated by CFA charterholders evince the zoom and drama of Wall Street, if you like that sort of thing, but the organisation’s rhythm is … sleepier and circumspect.

It wasn’t exactly energy or sexy danger that we brought to the table as a dozen charterholders sat down to craft an official opinion on the edict of Britain’s Financial Conduct Authority that certain issuers on the London Stock Exchange disclose their climate impact in the annual report. Frameworks from the Task Force on Climate-Related Financial Disclosures underpin the bulk of the FCA’s guidance. Can big companies explain away their non-compliance just because they aren’t ready? How material does a climate impact have to be for it to be reported?

Lockdown hit before our second meeting, and as we blinked at each other through our home computers, I detected more than the standard tension of strangers getting used to each other. We may face the climate crisis as an even-handed advocacy organisation of buttoned-up finance professionals, but it’s just as real for us as for anyone. Like clients new to therapy, however, we’re not possessed of the language to discuss matters as scary and inexorable as this.

Peril aside, it takes time for new people to get comfortable with each other, to gradually reveal idiosyncracies, to make space for jokes that are funny rather than just rote. There may be one or two who cross too quickly into the profane or familiar, only to see the whole group retrench, returning to a happier equilibrium after two further meetings.

With no pub gatherings, there was no possibility of greasing the troublesome cultural gears of what anthropologist Kate Fox identifies in Watching the English as an inveterate awkwardness, to which she partly attributes the citizenry’s penchant for drink. Expectations for any low-grade drama were a longshot for our working group, anyway, as prim charterholders. And there’s enough human pathos arising from the crisis that we need not invent it to spice up business as usual.

Business as usual, if the uncooperative crusties of Extinction Rebellion are to be believed, is a path to outsized human suffering. I believed XR enough to join them in my very first foray into activism. Speaking out doesn’t sit comfortably with me, though I shudder to invoke personal comfort. The plight of millions of climate refugees is where I hang my hat when people ask why I’m involved. This particular financial analyst is too wishy-washy to tell people what to do, but suffering is real, and those millions aren’t going to escape it. It’s coming.

See? How to write about climate reporting while sprinkling in a little mass death? I wasn’t keen on imposing my existential fears on the working group. Pulling yuppie rank about the office lunch destination is as bolshie as I get: ‘We’re in the City of London, Darren; Spaghetti House is off the table.’

The climate crisis is calling on reserves – of what? Resolve? Honesty? Anger? – that I’m not sure I possess. In the meantime, I can show up.

Subduing self-interest to do our part, however minor, our CFA team weighed the attractiveness of the London Stock Exchange to companies considering a listing (more rules!); we weighed the complications foisted on regulators by Covid-19 (pandemic first, climate later!); and we weighed the risks of dragging our feet three decades after the Intergovernmental Panel on Climate Change said we were in grave danger (biosphere > virus!).

Absent suitable language to discuss the pain and fear of existential threat in professional spaces, our recommendation letter adopts the language of business:

CFA UK believes that good climate change reporting will help institutional investors allocate capital in a way which safeguards their clients’ investments as much as possible from the impacts of climate change.

That’s one way to put it, and I don’t fault our group for its diction. There’s a time and a place, and yet the world moves too slowly to avert unprecedented disaster, depending on your view of tipping points. Underneath the buttoned-up affectation of financial analysts like me is an unheard scream: ‘Faster. Faster!’