Policy Centre

Task Force on Climate-Related Financial Disclosures (TCFD)

TCFD was created by the international Financial Stability Board (FSB) to develop consistent climate-related financial risk disclosures for companies, banks, and investors to provide information to stakeholders. While TCFD-aligned reporting initially started as a voluntary reporting framework, more and more jurisdictions are making it a mandatory requirement for certain companies.
Download Policy Factsheet

What is the Task Force on Climate-Related Financial Disclosures (TCFD)?

  • The Task Force on Climate-Related Financial Disclosures (TCFD) was created by the international Financial Stability Board (FSB) to develop consistent climate-related financial risk disclosures for use by companies, banks, and investors.
  • The main objective of TCFD reporting is to disclose the climate-related risks and opportunities of a company as well as the financial impact those might have on the company’s business.
  • TCFD reporting aims to provide consistent and transparent information to all financial actors and global markets.
  • It is not a corporate reporting standard but a way of understanding how firms approach the financial risks and opportunities related to climate change.

Who is subject to TCFD-aligned reporting?

  • The TCFD is still mainly a voluntary framework for companies of all sizes, industries and jurisdictions.
  • More and more countries are looking into making TCFD-aligned climate-risk reporting mandatory.

🇬🇧 Mandatory TCFD-aligned reporting in the UK

  • As of April 2022, UK companies with the following criteria are obligated to submit TCFD-aligned reporting:
    ◦ All UK companies that are currently required to produce a non-financial information statement;
    ◦ UK registered companies with securities admitted to AIM with more than 500 employees;
    ◦ UK registered companies which are not included in the categories above but have more than 500 employees and a turnover of more than £500m;
    ◦ LLPs have more than 500 employees and a turnover of more than £500m.

What do companies disclose in their TCFD-aligned report?

  • A TCFD-aligned report should contain all relevant information on a company’s climate-related risks and opportunities as well as the resulting financial impacts of those. 
  • Companies should disclose the relevant information within the framework of the four recommended core subjects for a TCFD-aligned report:
    ◦ Governance
    : The organisation’s governance around climate-related risks and opportunities;
    ◦ Strategy
    : The actual and potential impacts of climate-related risks and opportunities on the organisation’s businesses, strategy, and financial planning;
    ◦ Risk Management
    : The processes used by the organisation to identify, assess, and manage climate-related risks;
    ◦ Metrics & Targets
    : The metrics and targets used to assess and manage relevant climate-related risks and opportunities.

Where and when do companies need to disclose their TCFD-aligned report?

  • The TCFD-aligned reports are to be published together with a company’s mainstream financial filings.
  • TCFD-aligned reports shall be issued within four months of the end of a company’s financial year-end.

Keep up with climate risk disclosure by reporting on the TCFD. For your compliance needs, Plan A has the perfect solution. Request a demo with our policy experts. 

Check out more Policies

Interested in learning more?

Get in touch with our team
Get in touch