Task Force on Climate-related Financial Disclosures (TCFD)
Created in 2015 by the Financial Stability Board (FSB) at the request of the G20, TCFD provides a framework for companies to disclose climate-related financial risks and opportunities. Structured around four pillars — Governance, Strategy, Risk Management, and Metrics & Targets — TCFD answers the question investors, lenders, and insurers care about most: how will climate change affect this company's bottom line? As of 2024, TCFD recommendations have been adopted or mandated by regulators in over 20 jurisdictions, and the ISSB's IFRS S2 standard fully incorporates TCFD's four-pillar structure.
Key Features
Climate-focused financial risk disclosure — bridges sustainability data with financial planning
Four core pillars: Governance, Strategy, Risk Management, and Metrics & Targets
Requires scenario analysis (typically 1.5°C and 3°C+ warming pathways) to stress-test business resilience
Mandatory in the UK, New Zealand, Japan, Switzerland, and effectively required in the EU under CSRD
Metrics We Track
Key disclosures addressed in our reports
Board Climate Oversight
How the board oversees climate risks and opportunities, including committee structures, board competency, and frequency of climate-related briefings.
Management's Role
How management assesses and manages climate risks, including which C-suite roles are responsible and how climate KPIs affect executive compensation.
Climate Risks & Opportunities
Physical risks (flooding, heat stress, supply chain disruption) and transition risks (carbon pricing, stranded assets, regulatory changes) identified over short, medium, and long-term horizons.
Scenario Analysis
Financial impact assessment under different warming scenarios (typically 1.5°C aligned with the Paris Agreement and a 3°C+ business-as-usual scenario). Includes revenue impacts, asset impairments, and capital expenditure requirements.
Risk Identification Process
The processes used to identify, assess, prioritize, and integrate climate risks into your enterprise risk management (ERM) framework.
GHG Emissions & Targets
Scope 1, 2, and 3 emissions disclosed in metric tonnes CO₂e. Internal carbon pricing if used. Climate-related targets, timelines, and progress against them (e.g., Net Zero by 2040).
Who Needs TCFD Disclosures?
TCFD is essential if you are a publicly listed company, receive financing from banks that have committed to the Glasgow Financial Alliance for Net Zero (GFANZ), supply to companies that must report under the UK's mandatory TCFD rules, or operate in any jurisdiction where climate risk disclosure is becoming law. Even private companies benefit from TCFD alignment when seeking venture capital or private equity investment.
Regulatory & Compliance Context
The UK was the first G7 nation to mandate TCFD-aligned reporting for all large companies (2022). New Zealand, Japan, and Switzerland followed with similar mandates. In the EU, CSRD's climate-related disclosures are fully aligned with TCFD's four-pillar structure. The ISSB's IFRS S2 standard, which will be adopted globally, explicitly builds on TCFD. Starting in 2025, California's SB 261 also requires climate risk disclosure for large companies operating in the state.
How Our Reports Help
Our Advanced tier reports provide comprehensive TCFD-aligned disclosures including governance structure mapping, climate risk and opportunity identification across your operations, emissions tracking across all three scopes with year-over-year trends, and a framework for setting credible climate targets. The report formats your data according to TCFD's four-pillar structure for direct inclusion in annual reports or investor presentations.
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