Task Force on Climate-related Financial Disclosures
Risk Management
Climate change presents financial risk to the global ● Disclose how the organization identifies, assesses, and
economy. manages climate-related risks.
Financial markets need clear, comprehensive, high-
Recommended Disclosures
quality information on the impacts of climate change. This a. Describe the organization’s processes for identifying
includes the risks and opportunities presented by rising and assessing climate-related risks.
b. Describe the organization’s processes for managing
temperatures, climate-related policy, and emerging technologies
climate-related risks.
in our changing world. c. Describe how processes for identifying, assessing, and
The Financial Stability Board (FSB) created the Task managing climate-related risks are integrated into the
organization’s overall risk management.
Force on Climate-related Financial Disclosures (TCFD) in 2015
to improve and increase reporting of climate-related financial Metrics and Targets
information. Following the release of the Task Force’s 2023 ● Disclose the metrics and targets used to assess and
Status Report, upon request of the FSB, the TCFD has been manage relevant climate-related risks and opportunities
where such information is material.
disbanded.
Recommended Disclosures
Benefits of better disclosure a. Disclose the metrics used by the organization to assess
climate-related risks and opportunities in line with its
Risk Assessment
strategy risk management process.
● More effectively evaluate climate-related risks to your
b. Disclose Scope 1, Scope 2 and, if appropriate, Scope 3
company, its suppliers, and competitors
greenhouse gas (GHG) emissions and the related risks.
Capital Allocation
c. Describe the targets used by the organization to
● Make better-informed decisions on where and when to
manage climate-related risks and opportunities and
allocate your capital.
performance against targets.
Strategic Planning
● Better evaluate risks and exposures over the short,
Principles for effective disclosure
medium, and long term.
● help achieve high-quality disclosures that enable users
to understand the impact of climate change on
TCFD
organizations
● Developed a framework to help public companies and
other organizations more effectively disclose climate-
1. Disclosure should represent relevant information
related risks and opportunities
2. Disclosure should be specific and complete
3. Disclosure should be clear, balanced, and
TCFD Recommendations understandable
● widely adoptable and applicable to organizations across 4. Disclosure should be consistent over time
sectors and jurisdictions 5. Disclosure should be comparable among companies
● designed to solicit decision-useful, forward-looking within a sector industry or portfolio
information that can be included in mainstream financial 6. Disclosure should be reliable, verifiable, and objective
filings 7. Disclosure should be provided on a timely basis
The recommendations are structured around four thematic areas Scenario Analysis
that represent core elements of how organizations operate: ● A process for identifying and assessing the potential
implications of a range of plausible future states under
Governance conditions of uncertainty
● Disclose the organization’s governance around climate- Scenarios
related risks and opportunities ● Hypothetical constructs and not designed to deliver
Recommended Disclosures precise outcomes or forecasts
a. Describe the board’s oversight of climate-related risks ● Provide a way for organizations to consider how the
and opportunities. future might look if certain trends continue or certain
b. Describe management’s role in assessing and conditions are met.
managing climate-related risks and opportunities.
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 Disclosures
a. Describe the climate-related risks and opportunities the
organization has identified over the short, medium, and
long term.
b. Describe the impact of climate-related risks and
opportunities on the organization’s businesses,
strategy, and financial planning.
c. Describe the resilience of the organization’s strategy,
taking into consideration different climate-related
scenarios, including a 2`C or lower scenario.