Created by The Financial Stability Board, TCFD aims to improve and increase reporting of climate-related financial information. Formed to improve and increase reporting of climate-related risks and opportunities. TCFD outlines a set of Key Recommendations to help businesses develop meaningful, consistent disclosures for banks, investors, and other stakeholders.
TCFD Standards and Compliance Timeline
TCFD varies by country if adopted. European Union, Singapore, Canada, Japan, UK, New Zealand, Brazil and South Africa will be affected by TCFD. New Zealand and the United Kingdom are mandating climate risk disclosures in line with the TCFD by 2023 and 2025 respectively. TCFD is also mandatory for banks in Brazil to disclose climate-related information as part of financial reporting by July 2022. Canada has become the latest G20 nation to adopt the Task Force on Climate-related Financial Disclosures (TCFD) recommendations in the government’s Climate Plan. Canadian companies in banking, transportation, telecommunications and broadcasting, postal and pipeline, and feed, flour, seed and grain industries must align their reporting practices with the TCFD when the mandate takes effect in 2024.
Key Recommendations can be adopted by jurisdictions of individual nations, making them binding for public companies in those areas.
The TCFD requires companies and LLPs to disclose climate-related financial information in line with the four overarching pillars of the regulation's recommendations on a mandatory basis (Governance, Strategy, Risk Management, Metrics & Targets). These recommendations are:
- Governance: The organisation's governance around climate-related risks and opportunities
- Strategy: The actual and potential impacts of climate-related risks and opportunities on the organisation's businesses, strategy, and financial planning
- Risk Management: The processes used by the organisation to identify, assess, and manage climate-related risks
- Metrics and Targets: The metrics and targets used to assess and manage relevant climate-related risks and opportunities
TCFD-aligned reports shall be issued within four months of a company's financial year-end.
IFRS (ISSB) has taken over responsibility of the TCFD in 2024.
To whom and how to report:
