Global momentum for TCFD

While TCFD remains a voluntary, market-led initiative, many government organizations — including regulators — are taking steps to encourage or in some cases, mandate its adoption.

Australia

August 2019: The Australian Securities and Investment Commission updated its regulatory guidance on climate-related disclosure, encouraging TCFD-aligned reporting and welcoming TCFD as the preferred market standard. The Australian Prudential Regulation Authority is also increasing its scrutiny of institutions’ climate risk management, with plans to update its Prudential Practice Guide (PPG) to align with TCFD recommendations, including aspects of governance, strategy, risk management, metrics and disclosure.

Brazil

September 2020: Banco Central Do Brasil announced plans to disclose in line with TCFD recommendations and issue regulations for banks to disclose in line with the recommendations in 2021/2022.

Canada

May 2020: The Canadian government established COVID-19 relief financing to large employers contingent, in part, on employers publishing TCFD-aligned disclosures.

China

December 2020: The People’s Bank of China announced new priority areas to support a sustainable recovery from the coronavirus pandemic. Notably, the Central Bank’s Governor, Yi Gang, said the bank would consider introducing mandatory requirements for financial institutions to make climate disclosures.

European Union

June 2019: The European Commission incorporated the TCFD recommendations into its “Guidelines on Reporting Climate-Related Information” for 27 Member States to support companies in disclosing climate-related information under the European Union’s reporting requirements.

April 2021: The European Commission published a legislative proposal for a Corporate Sustainability Reporting Directive to establish a set of mandatory European sustainability reporting standards. The TCFD recommendations will serve as the foundation for these future EU sustainability standards.

Hong Kong

December 2020: A cross-agency group co-chaired by the Hong Kong Monetary Authority and Securities and Futures Commission launched a strategic plan that requires Hong Kong financial institutions and listed companies to disclose in line with TCFD recommendations no later than 2025. The Steering Group is also seeking to establish a platform to act as a focal point for financial regulators, government agencies, industry stakeholders and academia to coordinate cross-sector capacity building and repository of relevant resources to the Sustainable and Green Exchange (STAGE).

Japan

October 2019-2020: The Ministry of Economy, Trade and Industry (METI) released “TCFD Guidance 2.0” in 2020 and, together with the Ministry of the Environment and Financial Services Agency, supported the launch of the TCFD Consortium of Japan public-private sectors platform to pursue climate-related financial disclosures. METI held the first TCFD summit in October 2019 and a second summit on October 9, 2020. Japan currently hosts the largest group of TCFD supporters, accounting for almost a quarter of the world’s total.

Malaysia

September 2020: As part of its priorities over the next year, members of the Joint Committee on Climate Change (JC3) — chaired by Bank Negara Malaysia (BNM) and the Securities Commission, along with members from Bursa Malaysia and financial industry — have committed to work towards wider adoption of TCFD recommendations and push forward concrete actions to pave the way for the adoption of disclosure standards by financial market participants.

Mexico

September 2020: Banco de México recommended providing a clear strategy on how regulation and supervision will promote disclosure of physical and transition risk analysis of financial institutions and corporations following TCFD recommendations.​​​​

New Zealand

September 2020: The New Zealand government announced it would introduce a mandatory climate-related financial disclosure regime based on the TCFD framework. This means that approximately 90% of the country’s assets under management could be obligated to make climate-related disclosures in line with TCFD recommendations by 2023.

Singapore

December 2020: The Monetary Authority of Singapore (MAS) released three sets of “Guidelines on Environmental Risk Management” for banks, corporates and asset managers indicating that these groups should reference international reporting frameworks, including TCFD, to guide their environmental risk disclosure.​​​

South Africa

May 2020: The National Treasury of South Africa published a draft technical paper recommending that regulators and the financial sector establish standards on identifying, monitoring and reporting environmental and social risks, including climate-related risks, that incorporate the TCFD recommendations.

Switzerland

January 2021: Switzerland became a formal supporter of TCFD to complement the country’s sustainable finance policy agenda. The decision is in line with the Federal Council’s call to have Swiss companies from all economic sectors implement the TCFD recommendations, with the Federal Council aiming to put forward legislation to make this binding.​​​

United Kingdom

November 2020: The United Kingdom announced that all publicly listed UK companies with a premium listing will be required to “comply or explain” with the TCFD’s requirements by 2023, with mandatory TCFD-aligned disclosures across non-financial and financial sectors of the UK economy by 2025.

United States

April 2021: Secretary of the Treasury Janet L. Yellen endorsed the TCFD Recommendations as the key foundational framework for climate reporting in remarks to the Institute of International Finance. In co-chairing the G20 Sustainable Finance Working Group, the US Treasury will be working with finance ministries and central banks to build on the work of the TCFD in developing their approaches to sustainability disclosures.

International

January 2019: The International Organization of Securities Commissions (IOSCO) published a statement expressing the importance of considering ESG issues when reporting material information. Notably, IOSCO referenced the TCFD as a framework for reporting organizations to consider when disclosing climate-related information, and as IOSCO is comprised of securities and futures markets regulators from over 100 countries, this statement carries significant global implications.

April 2019: The Network for Greening the Financial System (NGFS), a group of 72 central banks and supervisors and 13 observers from international organizations, published “A Call for Action: Climate Change as a Source of Financial Risk.” In the report, the NGFS encouraged all companies issuing public debt or equity as well as financial-sector institutions to disclose in line with the TCFD recommendations.

October 2019: The European Union launched together with the relevant authorities of Argentina, Canada, Chile, China, India, Kenya and Morocco, the International Platform on Sustainable Finance (IPSF). The IPSF aims to promote best practices around taxonomies, disclosures, standards and labels to scale up the mobilization of private capital towards sustainable investments. Today, there are 17 members on the IPSF, representing 55% of greenhouse gas emissions, 50% of the world population and 55% of global GDP. The majority of members have also set regulatory requirements for climate disclosure.

February 2020: On a global level, the 26th UN Climate Change Conference of the Parties (COP26) featured TCFD implementation in its private finance agenda. In his speech at the February 2020 launch of the COP26 private finance agenda, Mark Carney — former Governor of the Bank of England and Finance Adviser to the Prime Minister for COP26 — encouraged companies to report a full set of TCFD disclosures in the 2021–2022 reporting cycle.

June 2021: The Group of Seven (G7) finance ministers and central bank governors called for making disclosure of mandatory climate-related disclosures in line with the TCFD framework compulsory for companies. The G7 also agreed on the need for a global baseline reporting standard, recognising the work of the International Financial Reporting Standards (IFRS) Foundation and its efforts to develop global reporting standards built on the TCFD framework and the work of sustainability standard-setters.

July 2021: The Group of Twenty (G20) finance ministers and central bank governors will work to promote implementation of disclosure requirements based on the TCFD framework to encourage global convergence around sustainability reporting standards. The G20 welcomes the IFRS Foundation's work programme to develop a global reporting standard, building on the TCFD framework and relevant standard-setters.