86 Climate-related financial disclosures “could promote more informed investment, credit, and insurance underwriting decisions” and “help financial market participants understand their climate-related risks.”417 Climate-related financial disclosures can help build consideration of the effects of climate change into routine business and financial decisions, and their adoption can help companies demonstrate responsibility and foresight. Better disclosure will lead to a more informed and more efficient capital allocation and help facilitate the transition to a more sustainable, lower-carbon economy.418 The Commission supports the recommendation that business enterprises disclose their: a) governance regarding climate-related risks and opportunities (governance); b) actual and potential impacts of climate-related risks and opportunities on the organization’s business strategies and financial planning (strategy); c) identification, assessment, and management of climate-related risks (risk management); and d) metrics and targets used to assess and manage relevant climate-related risks and opportunities (metrics and targets).419 In addition, business enterprises must quantify and disclose the following: a) risks from physical impacts of climate change; b) risks from transitioning to low to zero-carbon economies, including the possibility of stranded assets; and c) associated litigation risks. 3. Principles on Climate Change Obligations of Enterprises More specific than the UNGP-BHR and specifically crafted to guide enterprises on their corporate responsibilities vis-a-vis climate change, experts in international, environmental, tort, human rights, and corporate law have formulated the Principles on Climate Change Obligation of Enterprises (EP). The EP is based on the interpretation of current international law as it stands or will likely develop.420 Most notably, it directs businesses to take the following measures, among others: 417 418 419 420 Financial Stability Board, Proposal for a Disclosure Task Force on Climate-Related Risks (2015) (citing Task Force on Climate-Related Financial Disclosures, Recommendations of the Task Force on Climate-related Financial Disclosure (2017)). Letter from Michael R. Bloomberg, Chair, Task Force on Climate-Related Financial Disclosures, to Mr. Randal K. Quarles, Chair, Financial Stability Board (Sep. 22, 2020) (citing Task Force on Climate-related Financial Disclosures, 2020 Status Report (2020)). Bernd Kasemir & Manuela Huck-Wettstein, What Is the TCFD and Why Is It Important, Sustainerv.com (2021) available at https://sustainserv.com/en/insights/what-is-the-tcfd-and-whyis-it-important/. Climate Principles for Enterprises, available at https://climateprinciplesforenterprises.org/about/ (last accessed Oct. 23, 2021).