TCFD: An introduction

 

In December 2015, the Financial Stability Board (FSB) established the industry-led Task Force on Climate-related Financial Disclosures (TCFD or Task Force) to develop voluntary climate-related disclosures that “could promote more informed investment, credit [or lending] and insurance underwriting decisions” and, in turn, “would enable stakeholders to understand better the concentrations of carbon-related assets in the financial sector and the financial system’s exposures to climate-related risks.”

To fulfill its remit, the Task Force developed a framework with four widely adoptable recommendations on climate-related financial disclosures applicable to organizations across sectors and industries. The recommendations emphasized the importance of transparency in pricing risk — including risk related to climate change — to support informed, efficient capital-allocation decisions.

Since the release of its 2017 report and at the request of the Financial Stability Board (FSB), the Task Force has issued three status reports, describing the alignment of companies’ reporting with the TCFD recommendations. The number of organizations expressing support for the TCFD has grown significantly, spanning across 78 countries. Financial institutions responsible for assets of more than $178 trillion, including the largest asset managers and asset owners in the world, support the TCFD. On the corporate side, support for TCFD has grown to include companies representing more than $20 trillion in market capitalization.

More than 110 regulators and governmental entities around the world are TCFD supporters, including the governments of France, Belgium, United Kingdom, Canada, Chile, Denmark, Ireland, Hong Kong, Japan, New Zealand, Sweden and Switzerland. In addition, 75 central banks and supervisors from across the globe — through the Network for Greening the Financial System — have encouraged companies issuing public debt or equity to disclose in line with TCFD recommendations.

As TCFD gains global recognition as the foundational framework for climate reporting, and jurisdictions move to mandate TCFD-aligned disclosures, this guide will help you better understand the benefits of implementing TCFD. The brochure provides an overview of the TCFD recommendations, while also providing examples of how regulators and industry leaders are reacting to the growing demand for climate-related information.

^{“The impacts of climate change continue to worsen, with clear and significant effects on the global economy and on people’s lives. At the same time, global efforts to recover from the economic damage of the coronavirus pandemic have provided a unique opportunity to set a foundation for a more sustainable and resilient future. So the work of the Task Force is more important and more urgent than ever before.”}

Michael R. Bloomberg, TCFD Chair and Founder of Bloomberg L.P. and Bloomberg Philanthropies, October 2020

TCFD supporters

Since the release of the TCFD recommendations, support for the TCFD has increased rapidly. The TCFD’s 2,000+ supporting organizations span the public and private sectors and represent over 80 industries in 78 countries, including governments of over 10 jurisdictions.

^{“Four years on, the TCFD has generated a step change in both the demand for and supply of climate reporting. The demand for TCFD disclosure is now enormous.”}

Mark Carney, UN Special Envoy on Climate Action and Finance, Governor of the Bank of England, September 2019 

 

How you can support TCFD
Visit fsb-tcfd.org/support-tcfd/ and submit the form to contact the TCFD or become a supporter.