Task Force on

Climate-related
Financial Disclosures
Overview

December 2022
 Contents

The Need for Climate-Related Financial Disclosure 2

Potential Financial Implications of Climate Change 4

The Task Force on Climate-related Financial Disclosures 6

Demand for Climate-Related Financial Disclosure 10

Climate-Related Risks and Opportunities 12

TCFD Publications 14

TCFD Recommendations and Recommended Disclosures 16

TCFD Guidance 22

Guidance for All Sectors 22

Supplemental Guidance for Certain Sectors 24

Guidance on Specific Recommendations 26

Implementing the TCFD Recommendations 30

Benefits of Implementation 32

Select Resources on the TCFD Recommendations 34

TCFD Milestones 36

Overview of the TCFD 2022 Status Report 40

International Support for the TCFD 42

B 1
The Need for Climate-Related Financial Disclosure

The Need for Climate-Related “Now is the time to ensure that every financial

Financial Disclosure decision takes climate change into account.”

– Mark Carney, UN Special Envoy on Climate Action and Finance,
Governor of the Bank of England (2013–2020), FSB Chair (2011–2018),
December 2019
The large-scale and complex nature their longer-term strategies and most
of climate change makes it uniquely efficient allocation of capital in light
Mark Carney, UN Special Envoy on Climate Action and Finance, and Michael R. Bloomberg, TCFD Chair
challenging, especially in the context of these changes. Organizations that
of economic decision-making. invest in activities that may not be
Further, many companies have viable in the longer term will likely
incorrectly viewed the implications be less resilient to the transition to a
of climate change to be relevant lower-carbon economy — and their
only in the long term and, therefore, investors will likely experience
not necessarily relevant to decisions lower returns.
made today. Those views, however,
are changing as more information Compounding the effect on longer-term
becomes available on the potential returns is the risk that present
widespread financial impacts of valuations do not adequately factor
climate change. in climate-related risks because of
insufficient information. Investors,
In December 2019, Bank of England lenders, and insurance underwriters
Governor Mark Carney noted that need adequate information on
“changes in climate policies, new how companies are preparing for a
technologies and growing physical lower-carbon economy. More effective,
risks will prompt reassessments of clear, and consistent climate-related
the values of virtually every financial disclosure is needed from companies
asset.” Companies and providers of around the world.
capital, therefore, should consider

Natural catastrophe losses intensified

by climate change (2017–2021)1 $1.28T
Value at risk as a result of climate change
to manageable assets by 21002 $43T
up to

Munich Re, “Hurricanes, cold waves, tornadoes: Weather disasters in USA dominate natural disaster losses in 2021,” January 10, 2022;
1

“Record hurricane season and major wildfires — The natural disaster figures for 2020,” January 7, 2021; “Tropical cyclones causing
billions in losses dominate nat cat picture of 2019,” January 8, 2020; “The natural disasters of 2018 in figures,” January 8, 2019; and
“Hurricanes cause record losses in 2017 — The year in figures,” January 4, 2018.

The Economist Intelligence Unit, “The Cost of Inaction: Recognising the Value at Risk from Climate Change,” 2015.
2

2 3
Potential Financial Implications of Climate Change

Potential Financial
Implications of
Climate Change
Risk Drivers3
Extreme Weather Events and Gradual Physical: rising temperatures,
Changes in Climate higher sea levels, and more Climate Change Is a Financial Risk “Climate-related
destructive natural catastrophes
• E
 xtreme weather events affect health Transition: climate policy changes, Climate-related risk is non-diversifiable risks are a source
and damage infrastructure and innovations in technology, and
shifts in consumer preferences
and will have a financial impact on of financial risk and
property, reducing wealth and many companies:
it therefore falls
decreasing productivity. They can
also disrupt economic activity and squarely within
trade, creating resource shortages the mandates
and diverting capital from more of central banks
productive uses. Potential
Economic Effects and supervisors to
• C
 hanges in the natural environment • Business disruption ensure the financial
• Lower productivity REVENUES EXPENDITURES
affect the livability of different regions, system is resilient
• Reconstruction, reinvestment,
especially if mean temperatures rise
by more than 1.5ºC–2°C, and pose
and replacement
to these risks.”
• Higher commodity and
significant risks to human health, energy prices – Network for Greening
food security, water resources, etc. the Financial System,
First Comprehensive Report,
April 2019
Transition to a Low-Carbon Economy
Potential
• T
 he transition to a low-carbon economy Financial Effects
requires rapid and far-reaching • Lower property values and asset
ASSETS AND CAPITAL AND
LIABILITIES FINANCING
transitions across sectors, including devaluations
significant changes in investment. • Lower corporate profits and
household wealth
• F
 inancial market losses (equities,
• A
 disorderly, sudden, unanticipated,
bonds, commodities)
or discontinuous transition would • C
 redit market losses (residential
be more disruptive and costly than and corporate loans)
an orderly transition.

3
Based on Network for Greening the Financial System (NGFS), First comprehensive report: A call for action, pp. 13–17.

4 5
 Chapter name
The Task Force on Climate-related Financial Disclosures

The Task Force on

Climate-related
Financial Disclosures
G20 Finance Ministers and Central Bank
Governors asked the Financial Stability
Board (FSB) to review how the financial
sector can take account of climate-
related issues.

The FSB established the Task Force on

Climate-related Financial Disclosures
(TCFD or Task Force) to develop
recommendations for more effective
climate-related disclosures that:
• c ould “promote more informed
investment, credit, 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.”

6 57
The Task Force on Climate-related Financial Disclosures

Industry-Led Task Force The Task Force’s 31 international members, led by Michael R. Bloomberg,

with Geographically Diverse

include providers of capital, insurers, large non-financial companies,
accounting and consulting firms, and credit rating agencies. The Task

Members and Supporters

Force also has more than 4,000 supporters from 101 jurisdictions around
the world.

Task Force members’ locations

(size proportional to number of members)
Jurisdictions with TCFD supporters Data updated as of December 2022

8 9
 Demand for Climate-Related Financial Disclosure

Demand for
Climate-Related
Financial Disclosure

In addition, public-sector leaders

Demand for climate-related In addition, 680+ financial
have also noted the importance “We believe that high quality
disclosure has increased significantly institutions with more than $130t
since the release of the TCFD in assets have asked 10,000+
of transparency on climate-related and decision-relevant climate
issues within financial markets.
recommendations in 2017. companies to disclose via CDP, disclosures are critical to
Climate-related risk is increasingly
which has aligned its questionnaires
the subject of new reporting enabling change and we
Many private-sector financial with the TCFD recommendations.
requirements, such as the European support the recommendations
institutions, investors, and others
continue to make progress on Demand for climate-related disclosure
Non-Financial Reporting Directive of the Financial Stability Board’s
2014/95/EU, stress testing, and
incorporating climate-related from investors and others is critically Taskforce on Climate-Related
regulatory guidance based on the
disclosure into their financial important. In particular, large asset TCFD recommendations. A number Financial Disclosures (TCFD).
decision-making. For example, owners and asset managers sit at of national governments and public- We expect companies to report
over 615 investors with more the top of the investment chain and, sector organizations formally climate risks, strategy, policies
than $60 trillion in assets under therefore, have an important role to support the TCFD. In addition,
management committed to engage play in influencing the organizations
and performance in line with
several jurisdictions have proposed
with the world’s largest corporate in which they invest to provide better or passed laws and regulations the TCFD disclosure framework.
greenhouse gas emitters to strengthen climate-related financial disclosures. requiring disclosure aligned with This should include stress
their climate-related disclosures the TCFD recommendations. testing of business models and
by implementing the TCFD
assets against various climate
recommendations as part of
Climate Action 100+. change scenarios.”
–C
 anada Post Corporate Pension Plan,
response to the proposed United States

“The ability to quantify climate-related risk differentials Securities and Exchange Commission rule
for The Enhancement and Standardization
on a forward-looking basis is critical to pricing such risks of Climate-Related Disclosures for Investors,
June 2022
into financial institutions’ capital allocation decisions.”
– Gek Choo Goh, Chair of the NGFS’ Micro-prudential and Supervision workstream and Executive
Director of Banking Department II at the Monetary Authority of Singapore, May 2022

10 11
 Climate-Related Risks and Opportunities

Climate-Related Risks “Climate change presents global markets with risks and

and Opportunities
opportunities that cannot be ignored, which is why
a framework around climate-related disclosures is so
important. The Task Force brings that framework to the
table, helping investors evaluate the potential risks and
The Task Force identified several categories of climate-related risks and
opportunities. These include potential financial impact to assist investors, rewards of a transition to a lower carbon economy.”
and companies consider longer-term strategies and most efficient allocation – Michael R. Bloomberg, TCFD Chair and Founder of Bloomberg LP and Bloomberg
Philanthropies, June 2017
of capital in light of the potential economic impacts of climate change.

Risks Opportunities
Policy and Legal • U
 se of more efficient modes of transport and
• C
 arbon pricing and reporting obligations production and distribution processes
• M
 andates on and regulation of existing • U
 se of recycling
Transition products and services Strategic Planning Risk Management Resource • M
 ove to more efficient buildings
• E xposure to litigation Efficiency • R
 educed water usage and consumption

Technology •  se of lower-emission sources of energy

U
• S ubstitution of existing products and services •  se of supportive policy incentives
U
with lower emissions options •  se of new technologies
U
• U
 nsuccessful investment in new technologies Energy Source •  articipation in carbon market
Financial Impact P

Market
• C hanging customer behavior • D
 evelopment and/or expansion of low emissions
goods and services
• U ncertainty in market signals
• D
 evelopment of climate adaption and insurance
• Increased cost of raw materials
Products risk solutions
& Services • D
 evelopment of new products or services through
Reputation
R&D and innovation
• S hift in consumer preferences Income Cash Flow Balance
• Increased stakeholder concern/negative feedback Statement Statement Sheet
• S tigmatization of sector • A
 ccess to new markets
• U
 se of public-sector incentives
• A
 ccess to new assets and locations needing
Markets insurance coverage
• A
 cute: extreme weather events
• C
 hronic: changing weather patterns and rising
• P
 articipation in renewable energy programs
mean temperature and sea levels
and adoption of energy-efficiency measures
Physical • R
 esource substitutes/diversification
Resilience

REVENUES EXPENDITURES ASSETS CAPITAL

& LIABILITIES & FINANCING
12 13
 TCFD Publications

TCFD Publications

The Task Force’s recommendations were published in its Final Recommendations and
2017 report. Since then, the Task Force has published various Recommended Disclosures
reports and supporting materials to help companies implement Provides details on the following:
the recommendations and promote advancements in the • t he Task Force’s remit from the
availability and quality of climate-related financial disclosure. Financial Stability Board;
• c ontext and background on
the need for climate-related
Guidance on Specific Status Reports financial disclosures; and
Recommendations • t he TCFD recommendations
Provide updates on the state of climate-
Provide additional information on related financial disclosure for specific and recommended disclosures,
implementing the recommendations industries, insights on implementing as well as areas of further work.
and include the following: the TCFD recommendations, and
summaries of initiatives supporting
• 2017 Scenario Analysis Technical
TCFD implementation.
Supplement; Implementation Guidance
• 2020 Guidance on Scenario Analysis for Provides guidance on the application
Non-Financial Companies; of the recommendations, general
• 2
 020 Guidance on Risk Management implementation guidance applicable
Integration and Disclosure; and to all sectors, and supplemental
guidance for certain sectors, including The Task Force’s 2017 report, guidance, and recent status reports
• 2
 021 Guidance on Metrics, Targets, and the following: are available at fsb-tcfd.org/publications/.

Transition Plans.
• four financial industries and
• four groups of non-financial
companies considered more likely
to be affected financially than others
given their exposure to certain
transition and physical risks.

14 15
 TCFD Recommendations and Recommended Disclosures

TCFD Recommendations

The Task Force’s 2017 report outlines

“The work of the TCFD the TCFD framework for reporting
shows the power of climate-related financial information.
voluntary engagement
from the private In its work, the Task Force drew on
member expertise, significant stakeholder
sector and how it can
engagement, and existing climate-
complement public related disclosure regimes to develop
sector regulations. a singular, accessible framework for
A remarkable climate-related financial disclosure. The
endeavor, the TCFD recommendations are structured around
four thematic areas that represent core
has developed global
elements of how organizations operate.
standards that are
now being used by
a significant number
Governance
of corporations
around the world.”
– Christian Thimann,
Strategy
TCFD Vice Chair (2015–2021)
and CEO and Chairman of
the Management Board, Risk
Athora Germany (2018–2021), Management
March 2021

Metrics
and
Targets

16 17
 TCFD Recommendations and Recommended Disclosures

TCFD Recommended Governance Strategy

Disclosures
Disclose the organization’s Disclose the actual and potential impacts
governance around climate-related of climate-related risks and opportunities
risks and opportunities. on the organization’s businesses, strategy,
and financial planning where such
information is material.

The four recommendations are supported by specific disclosures Recommended Disclosures Recommended Disclosures
organizations should include in financial filings or other reports to provide
a) D
 escribe the board’s oversight of a) D
 escribe the climate-related risks
decision-useful information to investors and others.
climate-related risks and opportunities. and opportunities the organization
has identified over the short,
b) D
 escribe management’s role
Key Features of Recommendations medium, and long term.
in assessing and managing
climate-related risks and opportunities. b) D
 escribe the impact of climate-related
Adoptable by Designed to solicit risks and opportunities on the
organization’s business, strategy,
all organizations decision-useful,
and financial planning.
forward-looking information
c) D
 escribe the resilience of the
on financial impacts
organization’s strategy, taking
into consideration different
climate-related scenarios, including
Strong focus on risks and Disclosure under a 2°C or lower scenario.

opportunities related to the Strategy and Metrics

Risk Management Metrics and Targets
transition to lower-carbon and Targets recommendations
economy in financial filings is subject Disclose how the organization Disclose the metrics and targets
to a materiality assessment, identifies, assesses, and manages used to assess and manage relevant
although all organizations climate-related risks. climate-related risks and opportunities
where such information is material.
are encouraged to disclose
publicly if practicable
Recommended Disclosures Recommended Disclosures

a) D
 escribe the organization’s a) Disclose the metrics used
processes for identifying and by the organization to assess
assessing climate-related risks. climate-related risks and
opportunities in line with its strategy
b) D
 escribe the organization’s
and risk management process.
processes for managing
climate-related risks. b) D
 isclose Scope 1, Scope 2, and if
appropriate, Scope 3 greenhouse
c) D
 escribe how processes for
gas (GHG) emissions, and the
identifying, assessing, and
related risks.
managing climate-related risks
are integrated into the organization’s c) D
 escribe the targets used by the
overall risk management. organization to manage climate-related
risks and opportunities and performance
against targets.

18 19
 TCFD Recommendations and Recommended Disclosures

“We see extensive and mounting

evidence that the physical and
transition effects of the climate
crisis are real. In order to reach
the goals of the Paris Agreement
we need to take forceful action –
this includes action from
corporations and the private
sector at large. Climate-related
disclosures and the TCFD
recommendations help companies
consider the impact of climate
change and associated mitigation
efforts on their strategies and
operations. A company that
communicates its climate resiliency
to its investors will have a
competitive advantage over those
that don’t.”
– Mary Schapiro, Head of the TCFD Secretariat
and Vice Chair for Global Public Policy
at Bloomberg LP, February 2021

20 21
 TCFD Guidance

Guidance for All Sectors Strategy

Disclose the actual and potential impacts of climate-related risks and opportunities on the
organization’s businesses, strategy, and financial planning where such information is material.

Recommended Guidance for All Sectors

Disclosure a) Organizations should provide the following information:
Describe the • a
 description of what they consider to be the relevant short-, medium-,
The Task Force’s “annex” provides both general and sector-specific guidance climate-related and long-term time horizons, taking into consideration the useful life of
to assist organizations with implementing the TCFD recommendations. risks and the organization’s assets or infrastructure and the fact that climate-related
opportunities issues often manifest themselves over the medium and longer terms;
The annex was originally released in 2017 and updated in 2021. the organization
• a
 description of the specific climate-related issues potentially arising
has identified
in each time horizon (short, medium, and long term) that could have
Example of Guidance for All Sectors over the short,
a material financial impact on the organization; and
medium, and
Investors and other stakeholders need to understand how climate-related
long term. • a
 description of the process(es) used to determine which risks and
issues may affect an organization’s businesses, strategy, and financial opportunities could have a material financial impact on the organization.
planning over the short, medium, and long term. Such information is used Organizations should consider providing a description of their risks and
to inform expectations about the future performance of an organization. opportunities by sector and/or geography, as appropriate. In describing
climate-related issues, organizations should refer to Tables A1.1 and A1.2
(pp. 75–76).

Recommended Guidance for All Sectors

Disclosure b) Building on recommended disclosure a), organizations should discuss
how identified climate-related issues have affected their businesses,
Describe the
strategy, and financial planning.
impact of climate-
related risks and Organizations should consider including the impact on their businesses,
opportunities on strategy, and financial planning in the following areas:
the organization’s
Which Organizations Should Implement the TCFD Recommendations? • Products and services • O
 perations (including types
businesses,
• Supply chain and/or value chain of operations and location
strategy, and
To promote more informed investing, lending, and insurance underwriting financial planning.
• A daptation and mitigation of facilities)
activities • Acquisitions or divestments
decisions, the Task Force recommends all organizations with public debt • I nvestment in research and • Access to capital
or equity implement its recommendations. Because climate-related issues development
are relevant for other types of organizations as well, all organizations are Organizations should describe how climate-related issues serve as an
encouraged to implement these recommendations. input to their financial planning process, the time period(s) used, and how
these risks and opportunities are prioritized. Organizations’ disclosures
should reflect a holistic picture of the interdependencies among the
In particular, implementation by asset managers and asset owners, including factors that affect their ability to create value over time.
public- and private-sector pension plans, endowments, and foundations, Organizations should describe the impact of climate-related issues on
will help their clients and beneficiaries better understand the performance their financial performance (e.g., revenues, costs) and financial position
(e.g., assets, liabilities). If climate-related scenarios were used to inform
of their assets, consider the risks of their investments, and make more
the organization’s strategy and financial planning, such scenarios should
informed investment choices. be described.
Organizations that have made GHG emissions reduction commitments,
operate in jurisdictions that have made such commitments, or have
agreed to meet investor expectations regarding GHG emissions
reductions should describe their plans for transitioning to a low-carbon
economy, which could include GHG emissions targets and specific
activities intended to reduce GHG emissions in their operations and value
chain or to otherwise support the transition.

22 23
 TCFD Guidance

Supplemental Guidance
for Certain Sectors
In addition to the guidance for organizations in all sectors, supplemental
guidance is available for the following industries and groups:

Financial Sector Industries

• Banks The financial sector was organized into four

• Insurance Companies major industries largely based on activities
• Asset Managers performed. The activities are lending (banks),
• Asset Owners underwriting (insurance companies), asset
management (asset managers), and investing
(asset owners).
Non-Financial Groups

• Energy The non-financial groups identified by the

• Transportation Task Force account for the largest proportion
• Materials & Buildings of GHG emissions, energy usage, and
• A griculture, Food, water usage.
and Forest Products

“It is encouraging to see the increasing number of banks

and asset managers that are systematically including TCFD
recommendations in their risk and opportunities analysis.”
– Denise Pavarina, TCFD Vice Chair and Senior Advisor, Aggrego Consultores,
February 2021

24 25
 TCFD Guidance

Guidance on Metrics, Targets, Risk Management Integration

and Transition Plans and Disclosure
This guidance is intended to support companies in disclosing decision-useful This guidance is aimed at companies that are interested in
climate-related metrics, targets, and transition plan information and linking integrating climate-related risks into their existing risk management
those disclosures with estimates of financial impacts. processes and disclosing information on their risk management
processes in alignment with the Task Force’s recommendations.

Focus of the Guidance: Initial Steps for Integration Unique Characteristics

• R
 ecent developments around The guidance explores the The guidance describes the unique
climate-related metrics and users’ practicalities of integrating climate- characteristics of climate-related
increasing focus on companies’ related risks into existing risk risks that are important to consider
plans for transitioning to a low- management processes and outlines when integrating such risks into
carbon economy a set of high-level, initial steps existing processes. The following
intended to support companies characteristics of climate-related
• A
 set of cross-industry, climate- in identifying important risks are discussed:
related metric categories that considerations for integration.
the Task Force believes all • different effects based on
organizations can disclose geography and activities;
1 Understand Climate Change
Concepts
• longer time horizons and
Ensure general understanding across
the company of climate change long-lived effects;
concepts and potential impacts.
• novel and uncertain nature;
2 Identify Processes and Functions
Identify risk management processes • c hanging magnitude and
and elements to be adjusted for nonlinear dynamics; and
Key Points Addressed: • How organizations might include
climate-related risk and functions
• Information on selecting and aspects of their transition plans responsible for those processes • complex relationships and
disclosing metrics, as well as a set in their climate-related financial and elements. systemic effects.
of cross-industry, climate-related disclosures
3 Update Risk Taxonomy
metric categories • H
 ow climate-related metrics, targets,
Incorporate climate-related risks
Disclosure Examples
into existing risk taxonomy and
• Information on selecting and and information from transition risk inventory. The guidance also describes features
disclosing climate-related targets, as plans provide useful information of decision-useful risk management
4 Adjust Risk Management Elements
well as details on the role of scenario for understanding the impact disclosures, as well as examples of
Adapt existing risk management
analysis in determining targets of climate-related issues on an processes and elements. companies’ disclosures.
organization’s financial performance
and position 5 Disclose Risk Management
Processes
26 27
 TCFD Guidance

Guidance on
Scenario Analysis
The Task Force developed two reports to provide guidance on scenario analysis.
The technical supplement was published in 2017 to provide an additional level
of detail for companies interested in using climate-related scenarios as part
of their efforts to implement the Task Force’s recommendations. The second
guidance, published in 2020, is intended to assist non-financial companies
considering scenario analysis.

Focus of Technical Supplement: Focus of Guidance:

• C
 onsiderations for applying • P
 ractical, process-oriented ways
scenario analysis for non-financial companies to use
climate-related scenario analysis
• A
 nalytical choices involved
in scenario analysis – E
 stablishing organizational
structures and processes to
• D
 escription of climate-related conduct scenario analysis
scenarios for transition and – Developing scenarios, including
physical risks scenario types and structural
• A
 dditional resources for elements
understanding and conducting • Ideas for disclosing the resilience
climate-related scenarios of companies’ strategies to different
climate-related scenarios
– Applying scenario analysis
to strategy formulation to
enhance resilience
– Addressing challenges of
disclosure around strategy
and scenarios
– Demonstrating strategy
resilience in disclosures

28 29
 Implementing the TCFD Recommendations

Implementing the Illustrative Implementation Path

TCFD Recommendations
Broad understanding of the
concentration of carbon-related
assets in the financial system
and the financial systems,
exposure to climate-related risks.

Organizations are now able to draw on 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 More complete, consistent, and
continue improving and developing their disclosures. Implementing the TCFD comparable information for
marketparticipants, increased
recommendations generally includes the following considerations: Greater adoption, further

Adoption Volume
transparency, and appropriate
development of information 
pricing of climate-related risks
provided (e.g., metrics and
and opportunities.
scenario analysis), and greater
maturity in using information.
Managing Climate-Related Issues Materiality
Building appropriate internal processes Taking the unique longer-term
to manage climate-related issues, impacts and challenges of climate Climate-related issues viewed
as mainstream business and
as well as collecting necessary data change into account when assessing Organizations begin to investment considerations by
disclose in financial filings. both users and preparers.
and metrics. materiality. All organizations are
encouraged to report in line with the
Existing and Future Governance and Risk Management
Reporting Requirements recommendations, as well as report Companies already reporting under
other frameworks implement the
Reviewing requirements for Scope 1 and Scope 2 GHG emissions Task Force’s recommendations.
Final TCFD 
financial and non-financial reporting regardless of materiality. Report released.
Others consider climate-related
issues within their businesses.
and considering whether additional
requirements will likely be released. Placement Five-Year Timeframe

Determining the appropriate

Reporting Capabilities placement of disclosures — in Fundamental Principles for Effective Disclosures
Developing processes and mainstream (i.e., public) annual
capacity to report information financial filings as recommended 1 Disclosures should represent relevant information.
under the TCFD recommendations — by the TCFD or other official
subject to appropriate internal 2 Disclosures should be specific and complete.
company reports.
governance processes and in line 3 Disclosures should be clear, balanced, and understandable.
with regulatory requirements. Ongoing Collaboration
and Improvement 4 Disclosures should be clear over time.
Organizations have expressed that Disclosures should be comparable among companies within a sector,
participation in TCFD working groups, 5 industry, or portfolio.
workshops, or even knowledge-
sharing with peers and investors has 6 Disclosures should be reliable, verifiable, and objective.

been helpful in advancing climate-

7 Disclosures should be provided on a timely basis.
related disclosure.

30 31
 Implementing the TCFD Recommendations

Benefits A Note on Climate-Related Resilience and Scenario Analysis:

The TCFD recommends organizations disclose information about the

of Implementation resilience of their strategies based on the outcomes of different

climate-related scenarios — where such information is material.
The TCFD believes climate-related scenario analysis is an important and
useful tool for organizations to use to understand the strategic implications
Some of the potential benefits associated with implementing the Task Force’s
of climate-related risks and opportunities, regardless of materiality. In
recommendations include:
particular, climate-related scenario analysis can help organizations identify
• e
 asier or better access to capital • increased awareness and indicators to monitor the external environment, which may provide early
by increasing investors’ and understanding of climate-related warning to reassess and adjust strategies.
lenders’ confidence that the risks and opportunities within the
company’s climate-related risks company, resulting in better risk
are appropriately assessed and management and more informed
managed; strategic planning; and

• m
 ore effectively meeting existing • p
 roactively addressing investors’
disclosure requirements to demand for climate-related
report material information information in a framework that
in financial filings; investors are increasingly asking
for, which could ultimately reduce
the number of climate-related
information requests received.

“The TCFD disclosure requirements have really helped us drive

better quality thinking around the impact that climate change
could have on our business as well as our impact on climate
change, it has also caused us to bring together our technical
specialists, our operators and our finance teams to brainstorm
these issues which has strengthened the rigour of our thinking,
our understanding of the implications but most importantly
the identification of key actions.”
– Graeme Pitkethly, TCFD Vice Chair and Chief Financial Officer, Unilever, March 2021

32 33
 Implementing the TCFD Recommendations

Select Resources
TCFD Website UNEP FI Reports on Climate-Related
Further information on the TCFD Risk and Scenario Analysis

on the TCFD
is available on our website at The United Nations Environment
fsb-tcfd.org. The TCFD website Programme Finance Initiative
includes all the TCFD’s publications, (UNEP FI) has led pilot projects
Recommendations including the final recommendations,
implementation guidance, report
on TCFD implementation for
financial institutions. All reports
translations, recent status reports, and additional resources are
examples of disclosure, and available at the UNEP Fl website.
a series of workshops on TCFD
implementation. Laws, Regulations, and Standards
As support from the private sector
TCFD Knowledge Hub has grown, governments and
The TCFD Knowledge Hub hosts over jurisdictions around the world, as well
700 resources that help companies as international standard setters and
identify, analyze, and report stock exchanges, have begun to codify
climate-related financial information. aspects of the TCFD recommendations
The Hub was created by the Climate into laws, regulations, and/or
Disclosure Standards Board standards. As an example, the
(CDSB) and is now managed International Sustainability Standards
by CDP. Resources on the Hub Board was established by the
support the adoption of the International Financial Reporting
TCFD recommendations and the Standards Foundation (IFRS) to deliver
development of high-quality, a comprehensive global baseline
consistent, and comparable of sustainability-related disclosure
climate-related financial disclosures. standards and intends to use the TCFD
and other frameworks as a basis for
WBCSD Preparer Forums its work. More information can be
The World Business Council for found on the IFRS website.
Sustainable Development (WBCSD)
has worked with companies in Additional Resources
several industries, such as oil and Many other organizations — such
gas, electric utilities, transportation, as the UN Principles for Responsible
and chemicals, in forums focused Investing and CDP — have worked to
on implementation of the TCFD align with the TCFD recommendations
recommendations. The reports and have released various resources
of these “preparer forums” are to assist organizations with
available on the WBCSD website. implementing and using climate-
related financial disclosure.

34 35
 TCFD Milestones

TCFD Milestones “[ T]he TCFD has generated a step change in both
the demand for and supply of climate reporting.
Since the release of the TCFD recommendations, support for the
The demand for TCFD disclosure is now enormous.”
TCFD has increased rapidly. The TCFD’s 4,000+ supporting organizations – Mark Carney, UN Special Envoy on Climate Action and Finance,
Governor of the Bank of England (2013–2020), FSB Chair (2011–2018),
span the public and private sectors and represent over 70 industries
September 2019
in 101 jurisdictions, including the governments of 11 countries.

The FSB announces The Task Force The Government of G20 pledges to promote The IFRS announces European Financial The number of TCFD
the establishment of releases its disclosure Japan holds the first- implementation of the formation of Reporting Advisory supporters surpasses
the TCFD. recommendations in June ever TCFD Summit, disclosure requirements the International Group (EFRAG) launches 4,000 organizations
2017, with the support of organized by the based on the TCFD Sustainability a public consultation from 100+ jurisdictions
over 100 CEOs. TCFD Consortium. framework in line with Standards Board, on the draft European with a combined
domestic regulatory which intends to use Sustainable Reporting market capitalization
frameworks, a month the TCFD and other Standards, which include of $26 trillion.
after the G7 made a frameworks as a basis disclosure requirements
similar announcement. for its work. corresponding to the
TCFD’s recommendations.

The Task Force The International

releases guidance The Task Force launches Sustainability The Task Force launches its
The Task Force on scenario its fourth status report, Standards Board (ISSB) fifth status report and found
releases its first analysis and risk guidance on metrics, publishes two exposure the percent of companies
The FSB announces status report and management, as targets, and transition draft standards; both disclosing TCFD-aligned
members of the announces over well as its third plans, and revised build upon the TCFD information steadily
Task Force. 500 supporters. status report. implementation guidance. recommendations. increased since 2017.

How you can support TCFD:

Visit fsb-tcfd.org/support-tcfd/
and submit the form to contact the TCFD or become a supporter.
36 37
 Overview of the TCFD 2022 Status Report

“…We support moving towards mandatory climate-related

International Developments financial disclosures that provide consistent and decision-useful
information for market participants and that are based on
on Climate-Related Disclosure the Task Force on Climate-related Financial Disclosures (TCFD)
framework, in line with domestic regulatory frameworks.
Since 2017, several jurisdictions and standards setters have drawn
Investors need high quality, comparable and reliable information
from the TCFD recommendations in developing climate-related
disclosure requirements, proposals, or standards. on climate risks…”
– G7 Finance Ministers and Central Bank, Governors Communique, June 2021
Developments in Various Jurisdictions1,2

International and Regional Standards Final Disclosure Requirements

International Sustainability European Union Brazil Singapore
Standards Board (ISSB) European Financial Reporting Securities and Exchange Singapore Exchange
March 2022 exposure drafts on Advisory Group (EFRAG) April 2022 Commission, Central Bank of Brazil
sustainability-related disclosure draft EU Sustainability Reporting Switzerland
standards and climate-related Standards Egypt Financial Market Supervisory
disclosure standards Egyptian Financial Regulatory Authority
Authority
United Kingdom
New Zealand Parliament, Financial Conduct
New Zealand Government Authority
Top Five Countries by
Number of Supporters “…a more substantive uptake of the
Proposed Disclosure Requirements
Japan recommendations of the Task Force on
(1,070) Canada European Union
Climate-related Financial Disclosures (TCFD) Canadian Securities Administrators European Commission,
United Kingdom is essential. This will help companies embed United States
Parliament and Council
(467)
a broadly accepted framework for reporting Securities and Exchange Switzerland
United States Commission Federal Council
(440)
on the financial risks associated with
climate change into their governance and
Australia
risk management frameworks, as well as TCFD-Aligned Guidance or Other Support
(161)
Other jurisdictions have referenced the TCFD recommendations in guidance or statements
France
in communications with stakeholders.” to encourage climate-related disclosure, including official entities in Australia, Denmark,
(139) – A shley Alder, Former CEO, Securities and Futures Commission Germany, Hong Kong, India, Ireland, Italy, Japan, Malaysia, Norway, Thailand, Russia, South
of Hong Kong and Chair, IOSCO, February 2021 Africa, and South Korea.

1 T hese final and proposed requirements vary in their scope of coverage, time frame, and type of report addressed.
2 T his is an illustrative list of recent jurisdictional events and is not intended as an exhaustive list.
Source: 2022 TCFD Status Report
38 39
 Overview of the TCFD 2022 Status Report

Status Report Key Findings Download the

2022 Status Report

2022 Disclosure Review Asset Managers and Owners TCFD Implementation

Reporting Practices and Use Survey

“When companies disclose

clear, consistent, and accurate
80% of companies reviewed disclosed A majority of asset managers and The availability and quality of
in line with at least one of the TCFD asset owners report to their clients climate-related financial disclosures information on the risks they face
recommended disclosures; however, and beneficiaries. Over 60% of asset has increased since June 2017. from climate change, investors and
more urgent progress is needed. managers and over 75% of asset owners Ninety-five percent (95%) of survey business leaders can make more
Only 4% disclosed in line with all 11 surveyed indicated they currently respondents saw an increase in the
informed and sustainable financial
recommended disclosures and only report climate-related information to availability of climate-related financial
around 40% disclosed in line with at their clients and beneficiaries. disclosures since the release of the decisions. That strengthens our
least five. TCFD recommendations, with 88% of global economy, improves health,
respondents citing improvements in
and helps address the climate
the quality of disclosures.
crisis. The Task Force has had an
exceptional year in rallying global
support for climate risk reporting
— but we still have a long way
to go. As governments and
Since fiscal year 2019, all regions have Nearly 50% of asset managers Investors and others use disclosures businesses around the world work
increased their levels of disclosure. and 75% of asset owners reported in decision-making and pricing. Based to accelerate the transition to a
In particular, the average levels of information aligned with at least five on the TCFD survey, 90% of investors
disclosure grew by 11 percentage of the 11 recommended disclosures. and other users incorporate climate-
clean energy economy, they should
points in the Asia-Pacific region, by 10% of asset managers and 36% of related financial disclosures in continue to draw on the TCFD
12 percentage points in North America, asset owners indicated they report on financial decision-making, and 66% of recommendations as a critical
and by 23 percentage points in Europe. all 11 recommended disclosures. these indicated such disclosures factor
tool in their efforts.”
into the way they price financial assets.
– Michael R. Bloomberg, TCFD Chair
and Founder of Bloomberg LP and
Bloomberg Philanthropies,
September 2021

40 41
 International Support for the TCFD

International Support
for the TCFD
Several international initiatives support incorporating the TCFD “The TCFD recommendations
recommendations into climate-related reporting standards
have gained enormous
“We support moving towards mandatory climate-related
traction over the years... but
financial disclosures that provide consistent and decision-useful the exercise now is reaching
information for market participants and that are based on
the Task Force on Climate-related Financial Disclosures (TCFD)
the limits of what can be
framework, in line with domestic regulatory frameworks.” achieved through a purely
industry-led and voluntary
framework. […] The time has
“We will work to promote implementation of disclosure
requirements or guidance, building on the FSB’s Task Force on come to take it to the next
Climate-related Financial Disclosures (TCFD) framework, in line
level, and the next level, in our
with domestic regulatory frameworks, to pave the way for future
global coordination efforts, taking into account jurisdictions’ view, is the development of the
circumstances, aimed at developing a baseline global reporting global minimum standard.”
standard. To that aim, we welcome the work programme of
the International Financial Reporting Standards Foundation – Klaas Knot, Chair of the FSB and President
to develop a baseline global reporting standard under robust of De Nederlandsche Bank, November 2021
governance and public oversight, building upon the TCFD
framework and the work of sustainability standard-setters,
involving them and consulting with a wide range of stakeholders
to foster global best practices. We welcome the FSB roadmap for
addressing financial risks from climate change.”

“IOSCO welcomes… a prototype for an approach to climate-

The Trustees’ proposed sustainability standards board “would related disclosures that builds on the recommendations of the
build upon the well-established work of the Financial Stability Task Force of Climate-related Financial Disclosures.”
Board’s Task Force on Climate‑related Financial Disclosures…”

“The Commission supports initiatives by the G20, the G7, the

“The FSB strongly encourages national or regional Financial Stability Board and others to generate international
authorities that are developing requirements or guidance commitment to develop a baseline of global sustainability
for climate-related disclosures to consider using the TCFD reporting standards that would build on the work of the Task
recommendations as the basis.” Force on Climate-related Financial Disclosures.”

42 43
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For more information, please visit fsb-tcfd.org

Nothing in this document constitutes an offer or a solicitation of an offer to buy or sell a security or financial
instrument or investment advice or recommendation of a security or financial instrument. The Task Force on
Climate-related Financial Disclosures believes the information herein was obtained from reliable sources, but
does not guarantee its accuracy. Copyright 2022 The Task Force on Climate-related Financial Disclosures.