METRICS, TARGETS, AND
TRANSITION PLANS
CONSULTATION
Summary of Responses

October 2021

Table of Contents

1

Introduction

3

2

Key Takeaways

7

3

a)

Climate-Related Metrics and Financial Impacts

10b)Disclosures By Financial Sector

22c)Climate-Related Targets

25d)

Climate-Related Transition Plans

27

Updates to Key Documents Based on Consultation Outcomes32

1
INTRODUCTION

Introduction

Background and Scope
Background
The Task Force on Climate-related
Financial Disclosures (TCFD)
conducted a public consultationfrom June 7–July 18, 2021
to gather feedback on proposedguidance on climate-related
metrics, targets, and transition
plans.
• 203 respondents completed theconsultation survey• 42 organizations submittedcomments outside of thesurvey– 34 were comment letters1– 8 were other types ofcomments

Scope of Consultation
Proposed Guidance on Climate-Related Metrics,
Targets, and Transition Plans
Since 2017, the Task Force has sought to clarify issues raised byorganizations in their implementation of the TCFD recommendations andprovide additional supporting guidance and other information whereappropriate. To address recent developments and feedback from users,
preparers, and others, the consultation draft proposed the following:• A set of proposed cross-industry, climate-related metrics• Additional information on the link between climate-related metrics andfinancial impact• Updates to financial sector-specific metrics, including metrics with which
to measure GHG emissions from investing, lending, and underwriting
and portfolio alignment• Guidance on disclosing targets and transition plans– Proposed updates to the 2017 annex2

The Task Force also hosted consultation questions on a draft technical report on portfolio alignment metrics developed by anindependent group of expert analysts from financial organizations (the Portfolio Alignment Team) at the request of the TCFD.
1. Comment letter refers to comments submitted by senior management on behalf of an organization. Suchcomments generally involve vetting within an organization to ensure they represent the organization’s positions.
2. TCFD, Implementing the Recommendations of the Task Force on Climate-related Financial Disclosures, June 2017
Excerpts from comment letters and survey open responses can be found throughout this document. Charts
throughout this document are based on the organizations that completed the consultation survey and do notincorporate responses from comment letters.

4

Introduction

Overview of Survey Respondents
Location of Headquarters(Total does not equal 100% due to rounding)

Organization Type
54%
(110)

Financial Services

32% (35)

Asset Manager

26% (29)
10% (20)

Non-Financial
Company

10% (20)

Non-Governmental
Organization (NGO)

7% (14)
6% (13)
4% (8)

Bank

16% (18)

Asset Owner

16% (18)

Other

10% (11)

Other
Data/Methodology
ProviderIndustry/Trade
Association

3% (7)

Government/
Public Sector

3% (7)

Academia/Education/
Research

1% (3)

Standard Setter/
Framework

Insurance Company

Professional
Services

32% (15)19% (9)11% (5)

Oil and Gas

AMER
26%

EMEA
51%
APAC
19%

LATAM
5%

IT

9% (4)

Real Estate/
Construction

9% (4)

Utilities

6% (3)

Metals and Mining

4% (2)

Industrials

4% (2)

Agriculture, Paper,
Forest Products

Q: Where is your organization headquartered? (n = 203) Base: All respondents
Q: Which one of the following best describes your organization? Base: All respondents (n = 203)
Q: Please select your primary firm type from the list below. Base: Financial sector respondents (n = 110)
Q: Please select your primary industry from the list below. Base: Non-financial services organizations (responses
that were not ‘other’) (n = 48)

2% of respondents from: Chemicals; Food,
Beverage, and Tobacco; Telecommunications;
Transportation

5

Introduction

Breakdown of Types of Survey Respondents

106

100

46
49 both preparers
and users

49 both preparers
and users

Preparer

User

Other

Preparer Perspectives

User Perspectives

Highlighting preparerviews on current state ofdisclosure and associatedchallenges

Highlighting user
perspectives on usefulness
and benefits of preparers’
disclosure

Respondents could specify that they
were neither users nor preparers. These
respondents saw questions open to all
respondents as well as those forfinancial service respondents, if
applicable

All Respondents
Highlighting overall perspectives on improving
metrics comparability, materiality assessments, andusefulness of metrics, targets, and transition plans

Q: Which of the following most closely aligns with your role? Select all that apply.
(Respondents could reply as preparers, users, both, or neither)
Base: All respondents (n = 203)

6

2
KEY TAKEAWAYS

Key Takeaways

Respondents and commenters generally support TCFD guidanceon metrics,targets, and transition plans

We support therecommendation that all
sectors disclose relevant,material categories of
Scope 3 emissions, as wellas Scope 1 and 2.

- Metals and Mining
Company

The specificity of the
proposed metrics onrisks and opportunities
is helpful in providing
additional clarity aroundthe information TCFD
would like organizations toprovide… this has been an
area of ambiguity for
TCFD preparers.

- Energy Company

The metrics and data
provided through these
disclosures form an
important basis for (i)assessing issuers’ longterm climate risks andopportunities and (ii)allowing for more
informed portfolio
allocation and proxyvoting decisions.
- Asset Manager

8

Key Takeaways

Survey respondents support cross-industry metrics, including
related targets, and inclusion of guidance on transition plans
Sections

Key Takeaways• 75% of respondents report that the proposed metrics would improve comparability– Responses emphasized a need to describe metrics more broadly as categories to allow flexibility inthe development and disclosure of metrics most relevant to specific organizations, industries, or jurisdictions1

A Climate-Related
Metrics• Many preparers are currently disclosing the proposed metrics, though disclosure of Scope 1, Scope 2,
and Scope 3 GHG emissions is far ahead of disclosure aligned with other metrics– However, preparers agree there are challenges in disclosing the proposed metrics, particularly related
to data and methodologies• Users agree that disclosure of the proposed set of metrics would be beneficial, with over 86% reporting
potential for better financial decision making• Respondents are divided on the issue of materiality for most metrics, but 70% of respondents believe
Scope 1 and Scope 2 GHG emissions should be disclosed irrespective of materiality

by
B Disclosures
Financial Sector

C Climate-Related
Targets• Financial sector respondents largely support that financial institutions should disclose exposure
to carbon-related assets, financed emissions, and the alignment of their portfolios to the Paris Agreement,
but agree there are data and methodology challenges• For respondents disclosing carbon footprinting metrics, banks tend to use the PCAF Standard, insurers tend
to use WACI, and asset owners and asset managers use WACI and the PCAF Standard• Respondents find targets related to the cross-industry metrics useful. However, a limited numberof preparers currently plan to set or disclose such targets• 96% of users agree that preparers’ disclosure of transition plans is useful and yields many benefits

D• Around one third of preparers have set a transition plan; another third plan to do so within the next year

Climate-Related
Transition Plans • Over 80% of respondents believe that organizations should disclose a transition plan if they have emissions
reduction commitments, with over 60% supporting disclosure for organizations in jurisdictions that have madecommitments or seek to meet user expectations

1. While the Proposed Guidance on Climate-Related Metrics, Targets, and Transition Plans proposed “metrics,” thepublished Guidance on Metrics, Targets, and Transition Plans refers to “metrics categories” (see pages 35-36).

9

Key Takeaways

Thirty four organizations submitted comment letters to the TCFD
as part of its consultation, providing useful feedback and context
on specific challenges
Key takeaways from comment letters•

Over 85% of the organizations noted their general support for
the TCFD recommendations and/or are TCFD supporters but
indicated concerns with aspects of the proposed guidance.

•

Nearly 65% of the organizations highlighted the need for clearer
guidance on the metrics, with several noting that comparability
depends on consistent definitions and methodologies.

•

Close to 60% expressed concern about the ability to report
several of the proposed metrics given the lack of certain types ofdata, accepted methodologies, and tools.

Composition of organizations submittingcomment letters
Financial

Other

Non-Governmental Organization

Non-Financial

Industry Association
6%
12%
32%

– 55% of these organizations indicated the proposed metrics
were difficult to report for their industries;– 40% requested the Task Force provide a phased approach or
additional time for implementation, and– 25% indicated specific concerns about disclosing Scope 3 GHG
emissions.
•

More than 65% of the financial organizations expressedsignificant concerns about disclosing financed emissions or
weighted average carbon intensity, and all but one of theorganizations was an asset manager or asset owner or
represented the views of asset managers and asset owners.

21%

29%

10

2A
CLIMATE-RELATED METRICS AND
FINANCIAL IMPACTS

Key Takeaways: Climate-Related Metrics and Financial Impacts

Users find disclosure of metrics and targets useful, but preparers
find several metrics difficult to disclose
Key: More respondents  Fewer Respondents
Preparer Perspectives

Currently
Currently disclose
estimate metric
metricUser Perspectives

All

Not difficult todisclose metricHave set or plan
to set target

Preparer
disclosure of
metric is useful

Preparer
disclosure oftarget is useful

Metric is usefulfor transition
planning

Scope 1 and 2
GHG Emissions

86%

81%

72%

68%

98%

93%

92%

Scope 3 GHG
Emissions

62%

54%

20%

51%

95%

87%

89%

Carbon price

30%

12%

30%

13%

89%

74%

70%

Physical Risks

42%

20%

18%

12%

92%

82%

79%

Transition Risks

42%

25%

22%

17%

92%

83%

83%

Climate-Related
Opportunities

39%

25%

28%

24%

93%

84%

80%

Remuneration

27%

21%

43%

23%

82%

72%

69%

Capital
Deployment

33%

23%

35%

26%

94%

83%

81%

Financial
Performance

32%

20%

17%

N/A

92%

N/A

73%

Financial Position

32%

14%

16%

N/A

94%

N/A

72%

Note, the following pages include provide more details on specific questions and results presented here

12Key Takeaways: Climate-Related Metrics and Financial Impacts

All Respondents

Nearly all respondents believe the disclosure of cross-industry
climate-related metrics would improve comparability
Potential of metrics and financial
impacts to improve comparability
Not at all4%

A little

21%

Activities informed by metrics and financial impacts
Respondents could choose more than one option

Risk identification
and assessment

75%

Strategic planningand goal setting71%

Board and management
understanding of issues

A lot

75%

65%

Operating andbusiness unit plans
Financial planningand budgeting
Other

36%
32%
27%

Key takeaways from comment letters:
Nearly 65% of the organizations that submitted comment letters highlighted the need for clearer guidance on the metrics,
with several noting that comparability depends on consistent definitions and methodologies.

Q: If all organizations disclosed the proposed climate-related metrics and financial impacts, how much would that
improve the comparability of climate-related disclosures? Base: All respondents (n = 203)
Q: As part of which activities is your organization using climate-related metrics and financial impacts for decisionmaking? Select all that apply. Base: All respondents (n = 203)13

Key Takeaways: Climate-Related Metrics and Financial Impacts

User Perspectives

The majority of users rate disclosure of the proposed metrics asuseful for decision-making
Usefulness of preparers’ disclosure

2%
8%

5%

11%

Very usefulSomewhat useful

8%

8%

7%

21%

22%

Not at all or not very useful

6%
18%

15%

22%

22%

46%

41%

91%
80%

71%

71%

42%

Scope 1 and 2
GHG Emissions

Scope 3
GHG Emissions

Carbon Price

73%

72%

42%

Physical Risks

Transition Risks Climate-Related
Opportunities

Q: Which of the proposed cross-industry, climate-related metrics and financial impacts would your organization finduseful for preparers to disclose? Base: Users (n = 106)
Q: There are different benefits that preparers may derive from the use of proposed cross-industry, climate-related
metrics and financial impacts. How useful are disclosures of cross-industry, climate-related metrics and financial
impacts in fulfilling the benefits described below? Base: Users (n = 106)

Remuneration

Capital
Deployment

14Key Takeaways: Climate-Related Metrics and Financial Impacts

Preparer Perspectives

Current disclosure of metrics varies significantly, with some
preparers indicating their intention to disclose in the future
Extent of disclosure>64% currently disclose

Currently disclose

Planning to disclose

No plans to estimate or disclose

Currently estimate,but do not disclose

Planning to estimate,
but not necessarily disclose

Not sure

40–47% currently disclose or plan to discloseor plan to disclose

1%
5%
5%

5%
3%

4%
9%

10%

4%

5%

7%

13%

14%

13%

21%

17%

15%
10%

41%

20%

22%

6%

81%

13%
54%

30%
23%

22%

14%
18%

12%
Carbon Price20%
Physical Risks

7%

15%

17%

14%

7%
6%

10%

25%

25%

21%

23%

Remuneration

Capital
Deployment

18%

Scope 3
GHG Emissions

8%

43%

8%

Scope 1 and 2
GHG Emissions

16%

Transition Risks Climate-Related
Opportunities

Q: Which of the following climate-related information does your organization disclose? Base: Preparers (n = 100)

15

Key Takeaways: Climate-Related Metrics and Financial Impacts

Preparer Perspectives

User Perspectives

Users rate disclosure of financial impacts as very useful, but only
20% of preparers disclose such impacts
Usefulness of preparers’ disclosure

Extent of disclosure

Not at all or
not very useful8%

6%

Not sure

8%10%

Somewhatuseful17%

21%

No plans toestimate ordisclose

19%

16%

Planning todisclose13%

12%Planning toestimate, but notnecessarily
disclose28%

30%

Currently
estimate, but do
not disclose

12%

Currently
disclose

20%

Very useful

75%

73%

Financial
Financial
Performance Position

18%

Key takeaways fromcomment letters:
Several organizations
that submittedcomment lettershighlighted challenges
with distinguishing
financial impacts thatwere directly influenced
by climate-related
issues versus otheractivity

14%

Financial
Financial
Performance Position

Financial performance refers to an organization’s income and expenses as reflected on its income and cashflow statements (actual) or
potential income and expenses under different climate-related scenarios.
Financial position refers to an organization’s assets, liabilities, and equity as reflected on its balance sheet (actual) or potential assets,
liabilities, and equity under different climate-related scenarios.

Q: Which of the following climate-related information does your organization disclose?
Base: Preparers (n = 100)
Q: Which of the proposed cross-industry, climate-related metrics and financial impacts would your organization finduseful for preparers to disclose? Base: Users (n = 106)16

Key Takeaways: Climate-Related Metrics and Financial Impacts

Preparer Perspectives

Preparers note several benefits of disclosing metrics, including
helping to deliver their organization’s climate ambition
Benefits of disclosing cross-industry, climate-related metrics
Very useful
5%

38%

Somewhat useful9%

Not at all or not very useful

16%

14%

9%

34%

37%

36%
53%

57%

54%

53%

50%

57%

31%

Ability to deliver on
my organization’s
climate ambition

19%

Better decision making Effective engagementwith my value chain

28%

Compliance withregulatory mandates

Q: There are different benefits that preparers may derive from the use of proposed cross-industry, climate-related
metrics and financial impacts. How useful are disclosures of cross-industry, climate-related metrics and financial
impacts in fulfilling the benefits described below?
Base: Preparers (n = 100)

Compliance withinvestor reporting
requests

Satisfying customer
pressures

17Key Takeaways: Climate-Related Metrics and Financial Impacts

Preparer Perspectives

Preparers find disclosure of Scope 1 and Scope 2 GHG emissions
least difficult, but report some difficulties with other metrics
Difficulty of disclosure
Not at all or not very difficult

Open response excerpts
Somewhat difficult

Very difficult

1%
27%

39%

36%

34%
72%

42%

32%

22%

56%

22%

51%

30%

27%

Scope
1 and 2

Scope 3

43%

50%

43%
20%

22%

30%
18%
Carbon Price Physical Risks

22%
Transition
Risks

28%

35%

• Materials and buildings
company: “Pressure to include
scope 3 metrics across theboard is increasing, but
primary data availability is
still lacking.”• Insurance company: “Theusefulness of shadow carbon
price in disclosure as well asinternal incentives varies byindustry and company, anddisclosure should not be
uniformly enforced.”• Bank: “Third party data
vendors very expensive andinconsistent in approach,no/insufficient publicly
available data sources.”

Climate- Remuneration
CapitalRelated
Deployment
Opportunities

Q: How difficult is it (or would it be) for your organization to disclose the proposed cross-industry, climate-related
metrics and financial impacts? Base: Preparers (n = 100)

18

Key Takeaways: Climate-Related Metrics and Financial Impacts

Preparer Perspectives

Data access and methodology selection are the most common
challenges of disclosure (1/2)
Key challenges

Respondents could select all that apply

Lack of internal expertise and/or resources

Selection/application of methodologies

Lack of buy-in across organization

Not required to disclose

Hard to get relevant data

Other

83%

60%

61%

43%

51%
29%

35%
28%
11%

17%

29%

22%

Scope 1 and 2 GHG Emissions(n = 65)

10%

27%

28%

19%

13% 11%

Scope 3 GHG Emissions(n = 87)

36%

28%

23%

27%

28%

14%

Carbon Price(n = 79)

Q: In general, what are the key challenges your organization is facing (or may face) in disclosing the proposed crossindustry, climate-related metrics and financial impacts? Select all that apply.
Note: Percentages are based on total respondents for each category. Base totals vary across metrics, as
respondents were prompted to select all key challenges that apply only for metrics ranked “not very difficult”,”“somewhat difficult,” or “very difficult”.

Remuneration(n = 64)

19

Key Takeaways: Climate-Related Metrics and Financial Impacts

Preparer Perspectives

Data access and methodology selection are the most common
challenges of disclosure (2/2)
Key challenges

Respondents could select all that apply

Lack of internal expertise and/or resources

Selection/application of methodologies

Lack of buy-in across organization

Not required to disclose

Hard to get relevant data

Other

73% 73%
71%

67%
63%

65%
57%
48%

34%

34%
30%
24%

23%
17%

15%

Physical Risks(n = 89)

17%
11%

15%

Transition Risks(n = 86)

13%

15%

18%
12%

Climate-Related Opportunities(n = 84)

Q: In general, what are the key challenges your organization is facing (or may face) in disclosing the proposed crossindustry, climate-related metrics and financial impacts? Select all that apply.
Note: Percentages are based on total respondents for each category. Base totals vary across metrics, as
respondents were prompted to select all key challenges that apply only for metrics ranked “not very difficult”,”“somewhat difficult,” or “very difficult”.

20%

13%

Capital Deployment(n = 84)

20

Key Takeaways: Climate-Related Metrics and Financial Impacts

Preparer Perspectives

Preparers also identify data access and methodology as the top
challenges in disclosing the financial impact of climate change
Key challenges

Respondents could select all that apply

Lack of internal expertise and/or resources

Selection/application of methodologies

Lack of buy-in across organization

Not required to disclose

Hard to get relevant data

Other

65%

63% 64%67%

Open Response Excerpts• Asset manager: “Data is aparticular problem. For many
asset classes that we invest indata is not available.”

34%

31%

17%

19%

Financial Performance(n = 89)

13%

16%

19%
14%

• Technology company: “Thereis no agreed methodology toassess the financial
implications of climate, nor
how to attribute risks/impact
directly to climate.”

Financial Position(n = 86)

Q: In general, what are the key challenges your organization is facing (or may face) in disclosing the proposed crossindustry, climate-related metrics and financial impacts? Select all that apply.
Note: Percentages are based on total respondents for each category. Base totals vary across metrics, as
respondents were prompted to select all key challenges that apply only for metrics ranked “not very difficult,”“somewhat difficult,” or “very difficult”.

21Key Takeaways: Climate-Related Metrics and Financial Impacts

All Respondents

The majority of respondents say Scope 1 and Scope 2 GHG
emissions should be disclosed irrespective of materiality, andmost other metrics should be disclosed based on materiality
Materiality assessment
Not sure
Scope 1 and 2

6%

Scope 3

10%

Carbon Price

Open response excerpts
Should be disclosed
Should be disclosed based
irrespective of materiality on materiality assessment
23%

70%
43%

47%
33%

19%

48%

Physical Risks

9%

41%

50%

Transition Risks

10%

38%

52%

10%

38%

52%

Climate-Related
Opportunities
Remuneration

38%

22%

40%

Capital Deployment

13%

Financial Performance

9%

40%

51%

Financial Position

10%

39%

51%

42%

45%

Q: Should the proposed cross-industry, climate-related metrics and financial impacts be subject to a materiality
assessment? Base: All respondents (n = 203)

• Energy company: “We feel it isappropriate that all of thecross-industry, climate-related
metrics should be subject toa materiality assessment.”• Bank: “Mandating scope 3
would require sequencing sothat the universe of all publiccompanies are disclosing
robust and accurate scope 1, 2
and eventually scope 3 data.”• Asset owner: “As so many
climate metrics models andtools rely on disclosures ofemissions, we believe that
scope 1, 2 and 3 emissions
should be disclosed by allorganizations.”

22

2B
DISCLOSURES BY FINANCIAL SECTORKey Takeaways: Disclosures By Financial Sector

Financial Sector Perspectives

For estimating financed emissions, financial sector respondents
vary on their use of PCAF and WACI
Percent of respondents using given methodology or metric
PCAF

Bank
(n = 29)

Insurance(n = 11)WACI

Do not currently disclose

Respondents could choose more than one
option

Other
48%

0%

45%

7%
0%
9%

85% report that it is hard to get
relevant data

67% report challenges inselection/application of
methodology

64%

35% report a lack of internal
expertise and/or resources

27%
20%

Asset
manager(n = 35)
Asset
owner
(n = 18)

Key challenges

14%
22%
17%

22%

31%

34%

39%

Key takeaways from comment
letters:
More that 65% comment lettersthat represent perspectives offinancial organizations highlighted
concerns about financed emissions
and / or WACI disclosure

The Partnership for Carbon Accounting Financials (PCAF) Standard is a methodology developed to measure greenhouse gas emissions(GHG) associated with financial activities in alignment with the GHG Protocol.
Weighted average carbon intensity (WACI) is a metric used to calculate the intensity of an organization’s investing, lending, andunderwriting activities based on GHG emission per unit of revenue.

Q: What methodology does your organization leverage for estimation of financed emissions? Base: Financial sector
respondents (n = 110)
Q: What are the key challenges your organization is facing or may face in disclosing financed emissions? Select allthat apply. (n = 110)24

Key Takeaways: Disclosures By Financial Sector

Financial Sector Perspectives

More than one half of respondents currently use portfolioalignment tools but highlight several implementation challenges
Organizations using portfolio alignment tools

Key challenges

43% do not use

87% report challenges in data
availability

Respondents could choose more than one option

43%

Respondents could choose more than one
option

57% use portfolio alignment tools
42%

86% report challenges in data
standardization

37%
34%
30%

27%

25%

86% report challenges in internal
data quality
77% report challenges specific to
Scope 3 GHG emissions
72% report challenges in climate
scenario development orapplication

Not usingportfolioalignment
tools

Target setting Transition risk
quantification

ImpactreportingInforming
CapitalProduct
counter-party allocation development
engagement optimization

Q: Is your organization using portfolio alignment tools, and if so for what purposes? (n = 110)
Q: In your opinion, what are the key challenges that need to be addressed across climate data and analytics inorder to support the usefulness and adoption of portfolio alignment tools?
Base: Financial sector respondents (n = 110)

25

2C
CLIMATE-RELATED TARGETS

Key Takeaways: Climate-Related Targets

Preparer Perspectives

User Perspectives

Majority of users find disclosure of quantitative targets based oncross-industry metrics useful
Extent of target setting

Not planning to set target
Plan to set a target,
but not this year
Plan to set a target
within the year

20%
33%
12%
7%

16%

73%

67%

61%

21%
Have set a target

What Users Deem
‘Very Useful’ &‘Somewhat Useful’

21%

61%
30%

Scope 1 and 2
GHG
Emissions

Scope 3
GHG
Emissions

90%

84%

55%

14%
3%
10%

21%
9%
3%

Carbon Price Physical Risks

70%

77%

22%
10%
7%
Transition
Risks

79%

Q: When will your organization set quantitative targets across cross-industry, climate-related metrics?
Base: Preparers (n = 100)
Q: How useful is it to your organization for preparers to disclose quantitative targets across cross-industry, climaterelated metrics? Base: Users (n = 106)

65%

12%

61%

13%

10%

5%

11%

14%

18%

15%

ClimateRemuneration
CapitalRelated
Deployment
Opportunities

79%

67%

80%

27

2D
CLIMATE-RELATED TRANSITION PLANS

Key Takeaways: Climate-Related Transition Plans

User Perspectives

Most users believe organizations with GHG emissions reduction
commitments should disclose a transition plan
Organizations that should disclose atransition plan
Made an emissions
reduction commitment

82%

In a jurisdiction with
an emissions
reduction commitment

63%

Meet emissions
reduction expectations
from financial
market participants

63%

Other

None of the above

Open response excerpts

18%• Data/methodology provider: “We would ask thatorganizations that operate in jurisdictions with an emissions
reduction commitment either provide their transition
plan, or explain why they do not have one e.g., thecommitment might not impact their sector.”• Industry association: “There may be sensitive or
confidential issues regarding corporate mitigation
strategies, which should not be subject to mandatory
disclosure.”• Asset owner: “Developing and implementing clear
transition plans is good practice for all companies, butparticularly for companies operating in high impact
sectors, such as companies in the TCFD’s key sectors.
These companies are making CAPEX and R&D investment
decisions that will determine the future trajectory of theirbusiness and will have implications for the real economy
decarbonizing.”

3%

Q: For what types of organizations should TCFD recommend disclosure of a transition plan?
Results represent percentage of total respondents. Base: Users (n = 106)29

Key Takeaways: Climate-Related Transition Plans

Preparer Perspectives

Most preparers indicate they have developed a transition plan orplan to do so, although getting relevant data can be challenging
Extent of transition planning

Key challenges

Unlikely
to set a transition plan

11%

Hard to get relevant data

Plan to set atransition plan,but not this year

22%

Unclear which transition plan framework
to apply or which elements to include

51%

Lack of agreement of mostprobable transition pathways

49%

Plan to set atransition planin the next year

32%

Respondents could select multiple answers

76%

Lack of internal
expertise and / or resources37%

Lack of buy-in
across organization

Transition plan has
been set

35%

24%
19%

Other

No challenges

Q: When will your organization set a transition plan? Base: Preparers (n = 100)
Q: What are the key challenges your organization is facing or may face in setting a transition plan?
Base: Preparers (n = 100)

5%30

Key Takeaways: Climate-Related Transition Plans

User Perspectives

Most users responded that they find disclosure of transition
plans very useful
Usefulness of preparers’ disclosure of transitionplans
Not at all or
not very useful4%

Somewhat useful

15%

Very useful81%

Extent to which users think transition plan
disclosures would be useful for decision making
Not at all or
not very useful6%

Somewhat useful20%

94% indicate it
would lead to better
decision making
Very useful

Q: How useful to your organization would it be for preparers to disclose transition plans? Base: Users (n = 106)
Q: There are different benefits derived from disclosure of transition plans by preparers. How useful are disclosuresof transition plans in fulfilling the benefits described below? Base: Users (n = 106)

74%

31

Key Takeaways: Climate-Related Transition Plans

All Respondents

Most respondents report that climate-related metrics are usefulfor structuring and tracking progress of transition plans
Usefulness of cross-industry, climate-related metrics for transition plans
Very useful

2%

6%

12%

Somewhat useful

7%
4%
22%

15%

Not at all or
not very useful

Not sure

Financial Sector
Metrics

9%

9%

10%

12%

8%

9%

13%

10%
9%

18%

14%

23%
27%

23%

24%

31%

19%

17%

7%

10%

18%

18%

55%

54%

Financed
EmissionsPortfolio
Alignment
Metric

36%

79%
67%
40%

Scope
1 and 2

Scope 352%

Carbon Price Physical Risks

60%

59%

57%
33%

Transition
Risks

Climate- Remuneration
CapitalRelated
Deployment
Opportunities

Q: How useful are climate-related metrics for structuring and tracking progress of a transition plan?
Base: All respondents (n = 203)

32

3
UPDATES TO DOCUMENTS BASED ON
RESULTS OF CONSULTATION

Updates to Key Documents Based on Consultation Outcomes

Based on the consultation, the Task Force modified certain
aspects of its Guidance on Metrics, Targets, and Transition Plans
Section of Guidance

Key Changes

andA Overview
Background• Include more information on the reasons the Task Force developed this guidance as well as its purpose.

B Scope and Approach• Include a section to address the scope of the report, the approach for its development, and key
considerations for preparers using the guidance.
• Reframe the cross-industry, climate-related metrics as metric categories to better reflect the need fororganizations and industries to operationalize these categories further.
• Clarify organizations should disclose internal carbon prices rather than internal and external carbon
prices, as disclosing external carbon price is already covered by scenario analysis guidance

C Climate-Related
Metrics• Include additional implementation examples for each metric category.
• Recognize not all organizations have the resources, including data and methodologies, to present
quantitative information across all metric categories at this time and encourage them to begin where
resources and expertise allow.
• Clarify the work conducted by Portfolio Alignment Team in developing Measuring Portfolio Alignment:
Technical Considerations was at the request of TCFD rather than a TCFD-developed reportD

Climate-Related
Targets

E

Transition Plans

F Financial Impacts• Clarify organizations should disclose climate-related targets related to the cross-industry, climaterelated metric categories where relevant.
• Include a case study describing an approach for standardizing disclosure of climate-related targets.
• Better distinguish guidance on developing a transition plan from guidance on disclosing key informationfrom transition plans.
• Include example disclosures related to transition plan information.
• Include a separate section on financial impact to distinguish financial impacts more clearly.
• Provide guidance on assessing the financial impacts of climate-related risks and opportunities.

The updated Guidance on Metrics, Targets, and Transition Plans is available at:
assets.bbhub.io/company/sites/60/2021/07/2021-Metrics_Targets_Guidance-1.pdf

34

Updates to Key Documents Based on Consultation Outcomes

Comparison of the consultation language and updated guidancefor climate-related metrics and financial impacts (1/2)
Consultation Language

Updated Metric Category Language

Summary

Detailed

Scope 1 and 2

Absolute Scope 1 and 2 GHG emissions

Scope 3

Relevant, material categories of Absolute Scope 3 GHG emissions

Carbon Price

External and shadow/internal carbon price(s)Price on each ton of GHG emissions usedinternally by an organization

Physical Risks*,1

Proportion of assets and/or operating, investing, or financing
activities materially exposed to physical risks, based on key
categories of commonly accepted risks

Amount and extent of assets or businessactivities vulnerable to physical risks

Proportion of assets and/or operating, investing, or financing
Transition Risks*,1 activities materially exposed to transition risks, based on key
categories of commonly accepted risks

Amount and extent of assets or businessactivities vulnerable to transition risks

GHG Emissions: Absolute Scope 1, Scope 2, andScope 3; emissions intensity

Proportion of assets and/or operating, investing, or financing
Proportion of revenue, assets, or other businessactivities aligned toward climate-related opportunities, based on
activities aligned with climate-related
key categories of commonly accepted opportunities
opportunities
Note: While some organizations already disclose metrics consistent with these categories, the Task Force recognizes others—especiallythose in the early stages of disclosing climate-related financial information—may need time to adjust internal processes before disclosing
such information. In addition, some of the metric categories may be less applicable to certain organizations. For example, data andmethodologies for certain metrics for asset owners (e.g., impact of climate change on investment income) are in early stages ofdevelopment. In such cases, the Task Force recognizes organizations will need time before such metrics are disclosed to their stakeholders.
Application of Materiality: The Task Force believes all organizations should disclose absolute Scope 1 and Scope 2 GHG emissions
independent of a materiality assessment. The disclosure of Scope 3 GHG emissions is subject to materiality; however, the Task Forceencourages organizations to disclose such emissions. The other cross-industry, climate-related metric categories remain subject tomateriality. Organizations should determine materiality for climate-related metrics consistent with how they determine the materiality ofother information included in their financial filings.
*Transition and Physical Risks: Due to challenges related to portfolio aggregation and sourcing data from companies or third-party fundmanagers, financial organizations may find it more difficult to quantify exposure to climate-related risks. The Task Force suggests that
financial organizations provide qualitative and quantitative information, when available.
Climate-Related
Opportunities

1. The Task Force removed the words “materially” and “material” from these categories based on comments raisedin the consultation that these qualifiers were confusing since the disclosure of metrics and targets are generally
subject to materiality.

35

Updates to Key Documents Based on Consultation Outcomes

Comparison of the consultation language and updated guidancefor climate-related metrics and financial impacts (2/2)
Consultation Language
Summary

Detailed

Remuneration*

Proportion of executive management remuneration linked toclimate considerations

Updated Metric Category Language
Proportion of executive management
remuneration linked to climate considerations

Amount of capital expenditure, financing, orinvestment deployed toward climate-related risks
and opportunities
Note: While some organizations already disclose metrics consistent with these categories, the Task Force recognizes others—especiallythose in the early stages of disclosing climate-related financial information—may need time to adjust internal processes before disclosing
such information. In addition, some of the metric categories may be less applicable to certain organizations. For example, data andmethodologies for certain metrics for asset owners (e.g., impact of climate change on investment income) are in early stages ofdevelopment. In such cases, the Task Force recognizes organizations will need time before such metrics are disclosed to their stakeholders.
Application of Materiality: The Task Force believes all organizations should disclose absolute Scope 1 and Scope 2 GHG emissions
independent of a materiality assessment. The disclosure of Scope 3 GHG emissions is subject to materiality; however, the Task Forceencourages organizations to disclose such emissions. The other cross-industry, climate-related metric categories remain subject tomateriality. Organizations should determine materiality for climate-related metrics consistent with how they determine the materiality ofother information included in their financial filings.
*Remuneration: While the Task Force encourages quantitative disclosure, organizations may include descriptive language on
remuneration policies and practices, such as how climate change issues are included in balanced scorecards for executive remuneration.
Organizations may need time to evaluate and determine which metrics are relevant to disclose, identify and collect data and otherinformation needed for the calculation of metrics, implement new or update existing processes to address or include relevant metrics, etc.
The Task Force recognizes the amount of time needed to disclose certain metrics (e.g., physical risks) consistent with the categories
identified in this table.
Capital
Deployment

Amount of expenditure or capital investment deployed toward
climate risks and opportunities

Financial Impacts

Consultation Language

Financial
Performance1

Impact of any material climate-related risks or opportunities on
Impact of climate-related risks or opportunities
financial performance (e.g., cost, profitability, operating cash flow,
on financial performance
impairment)

Financial Position1

Impact of any material climate-related risks or opportunities on
financial position (e.g., assets and liabilities)

Updated Financial Impact Language

Impact of climate-related risks and opportunities
on financial position

1. The Task Force removed the words “materially” and “material” from these categories based on comments raisedin the consultation that these qualifiers were confusing since the disclosure of metrics and targets are generally
subject to materiality.

36

Updates to Key Documents Based on Consultation Outcomes

Updates to Implementing the Recommendations of the Task Forceon Climate-related Financial Disclosures (TCFD annex) (1/3)
Section of Annex

Key Changes

A Introduction• Updated Section A.3. Application of Recommendations to encourage all organizations to disclose Scope 1
and Scope 2 GHG emissions independent of an assessment of materiality. The disclosure of Scope 3
GHG emissions is subject to materiality; however, the Task Force encourages organizations to disclosesuch emissions.

B Recommendations• No changes• Removed tables on alignment of the recommendations with other frameworks as they wereoriginally included primarily to demonstrate the Task Force’s use of existing disclosure frameworks indeveloping its recommendations. Since 2017, many climate-related disclosure regimes have aligned with
the TCFD recommendations and generally indicate within their frameworks where such alignment exists.
Strategy• Revised to more explicitly address disclosure of actual financial impacts on organizations as well as key
information from organizations’ plans for transitioning to a low-carbon economy (transition plans).
• Revised to more explicitly address disclosure of potential financial impacts on organizations.

for allC Guidance
Sectors

Metrics and Targets• Revised to more explicitly address disclosure of metrics consistent with cross-industry, climate-related
metric categories for current, historical, and future periods, where appropriate.
• Revised disclosure of Scope 1 and Scope 2 GHG emissions to be independent of a materiality
assessment.
• Revised to encourage disclosure of Scope 3 GHG emissions.
• Added disclosure of targets consistent with cross-industry, climate-related metric categories, where
relevant.
• Added disclosure of interim targets, where available, for organizations disclosing medium-term or
long-term targets.

The 2021 annex is available at:
assets.bbhub.io/company/sites/60/2021/07/2021-TCFD-Implementing_Guidance.pdf

37Updates to Key Documents Based on Consultation Outcomes

Updates to Implementing the Recommendations of the Task Forceon Climate-related Financial Disclosures (TCFD annex) (2/3)
Section of Annex

Key Changes
Strategy

Supplemental
Guidance for the
Financial Sector
Banks• For purposes of reporting on exposure to carbon-related assets, expanded the suggested definition ofassets to include all non-financial groups identified by the TCFD in its 2017 report.
Metrics and Targets• Added disclosure of the extent to which lending and other financial intermediary business activities
are aligned with a well below 2°C scenario.
• Added disclosure of GHG emissions for lending and other financial intermediary business activities,
where data and methodologies allow.
Metrics and Targets

D

Supplemental• Added disclosure of the extent to which insurance underwriting activities are aligned with a well
Guidance for the
below 2°C scenario.
Financial Sector
Insurance Companies • Added disclosure of weighted average carbon intensity or GHG emissions associated withcommercial property and specialty lines of business, where data and methodologies allow.

Supplemental
Guidance for the
Financial Sector
Asset Owners
Supplemental
Guidance for the
Financial Sector
Asset Managers

Metrics and Targets• Added disclosure of the extent to which assets they own and funds and investment strategies,
where relevant, are aligned with a well below 2°C scenario.
• Added disclosure of GHG emissions for assets they own, where data and methodologies allow.
Metrics and Targets• Added disclosure of the extent to which assets under management and products and investment
strategies, where relevant, are aligned with a well below 2°C scenario.
• Added disclosure of GHG emissions for assets under management, where data and methodologies
allow.

The 2021 annex is available at:
assets.bbhub.io/company/sites/60/2021/07/2021-TCFD-Implementing_Guidance.pdf

38Updates to Key Documents Based on Consultation Outcomes

Updates to Implementing the Recommendations of the Task Forceon Climate-related Financial Disclosures (TCFD annex) (3/3)
Section of Annex

Key Changes

E

Supplemental
Guidance for NonFinancial Groups• Removed the illustrative examples of metrics for the four non-financial groups, as work by otherframeworks and standard setters provide more detailed guidance on sector-specific metrics and are
updated on a regular basis.

F

Fundamental
Principles for
Effective Disclosure• No changes

Appendices• Added new appendix on cross-industry, climate-related metric categories to provide more informationon the rationale for inclusion of each metric category

The 2021 annex is available at:
assets.bbhub.io/company/sites/60/2021/07/2021-TCFD-Implementing_Guidance.pdf

39