At a glance: TCFD recommendations

What are the TCFD recommendations?​​​

In its work, the Task Force drew on member expertise, significant stakeholder engagement and existing climate-related disclosure regimes to develop a singular, accessible framework for climate-related financial disclosure. The recommendations are structured around four thematic areas that represent core elements of how organizations operate: governance, strategy, risk management and metrics and targets.

The four overarching recommendations are supported by 11 key climate-related financial disclosures — referred to as recommended disclosures — that build out the framework with information that will help investors and others understand how reporting organizations assess climate-related issues.

Key features of the recommendations:​​​​

 

Adoptable by all organizations
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Designed to solicit decision-useful, forward-looking information on financial impacts

 

Strong focus on risks and opportunities related to transition to lower-carbon economy

 

Disclosure under the strategy and metrics and targets recommendations in financial filings is subject to a materiality assessment, although all organizations are encouraged to disclose publicly if practicable

 

Governance
The organization’s governance and climate-related risks and opportunities.

Strategy
The actual and potential impacts of climate-related risks and opportunities on the organization’s businesses, strategy and financial planning.

Risk management
The processes used by the organization 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.​​​​

Benefits of implementation

Some of the potential benefits associated with implementing the Task Force’s recommendations include:

• Easier or better access to capital by increasing investors’ and lenders’ confidence that the company’s climate-related risks are appropriately assessed and managed

• More effectively meeting existing disclosure requirements to report material information in financial filings

• Increased awareness and understanding of climate-related risks and opportunities within the company, resulting in better risk management and more informed strategic planning

• Proactively addressing investors’ demand for climate-related information in a framework that investors are increasingly asking for, which could ultimately reduce the number of climate-related information requests received

To explore each of the thematic areas and supporting recommended disclosures, click here.

 

 

 

 

Implementing the TCFD recommendations​​

Organizations are now able to draw upon a wealth of examples and resources to accelerate their disclosures aligned with the TCFD recommendations. Once initial climate-related reporting is released, companies are encouraged to continue improving and developing their disclosures. Implementing the TCFD recommendations generally includes the following considerations:​​​

Managing climate-related issues
Building appropriate internal processes to manage climate-related issues as well as collecting necessary data and metrics.

Existing and future reporting requirements
Reviewing requirements for financial and non-financial reporting; considering whether additional requirements will likely be released.

Reporting capabilities
Developing processes and capacity to report information under the TCFD recommendations — subject to appropriate internal governance processes and in line with regulatory requirements.

Materiality
Taking the unique longer-term impacts and challenges of climate change into account when assessing materiality. All organizations are encouraged to report in line with the Governance and Risk Management recommendations regardless of materiality.

Placement
Determining the appropriate placement of disclosures — in mainstream (i.e., public) annual financial filings as recommended by the TCFD or other official company reports.

Ongoing collaboration and improvement
Organizations have expressed that participation in TCFD working groups, workshops or even knowledge sharing with peers and investors has been helpful in advancing climate-related disclosure.

Ongoing collaboration and improvement
Organizations have expressed that participation in TCFD working groups, workshops or even

knowledge sharing with peers and investors has been helpful in advancing climate-related disclosure.

Illustrative Implementation Path