What’s New in 2021
Overview of 2021 Progress, Status Report, and Updated Guidance

October 2021

1
INTRODUCTION TO TCFD AND 2021
PROGRESSIn 2017, the Task Force developed four widely-adoptable
recommendations on climate-related financial disclosures
Core elements of the TCFD recommendations

Governance

Governance

Strategy
RiskManagement

Metrics
and Targets

The company’s governance around climate-related risks andopportunities
Strategy
The actual and potential impacts of climate-related risks andopportunities on the company’s businesses, strategy, andfinancial planning
Risk Management
The processes used by the company to identify, assess, andmanage climate-related risks
Metrics and Targets
The metrics and targets used to assess and manage relevant
climate-related risks and opportunities3

Overview of Key TCFD Reports and Guidance
Visit fsb-tcfd.org/publications to access all of the
Task Force’s reports, guidance, and other materials.

Final
Recommendations
and Recommended
Disclosures

Three New Documents in 2021

2017 Final Report

Implementing
Guidance

Provides guidance for:• All sectors• Four financial industries• Four non-financial groups
2017 Implementing
Guidance (Annex)

The 2021 Annex supersedes the 2017 Annex

2021 Implementing
Guidance (Annex)

Additional
Supporting
Materials

Status Reports

2017 Scenario Analysis
Technical Supplement

2020 Guidance on
Risk Management
Integration andDisclosure

2020 Guidance on
Scenario Analysis
for Non-Financial
Companies

2021 Guidance on
Metrics, Targets, andTransition Plans

2018 Status Report2019 Status Report2020 Status Report

2021 Status Report

4

2
SUMMARY OF 2021 STATUS REPORTFINDINGSThe 2021 status report describes initiatives supporting TCFD, current
disclosure practices, and insights on disclosures of financial impact
Focus of the 2021 Status Report
A. Initiatives Supporting TCFD
• Highlights significant momentum by governments and regulators to embed TCFD recommendations into policy andguidance, moving toward requiring TCFD or TCFD-aligned disclosures through legislation and regulation• Describes additional developments from governments, regulators, international bodies, and industry-led groups
that support implementation of the TCFD recommendations
B. State of Climate-Related Financial Disclosures• Provides an overview of current disclosure practices in terms of their alignment with the Task Force’s
recommendations• Highlights examples of disclosures across the Task Force’s recommendations
C. Disclosure of Financial Impact• Identifies key challenges faced by preparers when assessing and disclosing financial impact information• Examines the importance to users of preparers disclosing financial impact information to support financial decisions

6

Status Report Key Findings
A. Initiatives Supporting TCFD
TCFD supporters grew by over 70% since 2020 to over 2,600. Supporters span 89 countries and nearly all
sectors of the economy, with a combined market capitalization of over $25 trillion
The Task Force has seen significant efforts from governments and regulators to embed the TCFD
recommendations into policy and guidance, moving toward requiring TCFD-aligned disclosures
B. State of Climate-Related Financial Disclosures
Disclosure increased more between 2019 and 2020 than in any previous year assessed. For the first time,over 50% of the companies reviewed included information on one of the Task Force’s recommended disclosures(description of their climate-related risks or opportunities)
Consistent with previous years, the lowest level of disclosure across the 11 recommended disclosuresrelated to the resilience of companies’ strategies under different climate-related scenarios. The percentage
of companies disclosing this information doubled between 2019 and 2020, but disclosure remains low at 13%
Europe remains the leading region for disclosures. European companies reviewed increased their average
disclosure by 15 percentage points since 2019 to 50%
C. Disclosure of Financial Impact
Over 20% of companies responding to the Task Force’s consultation said they disclose financial impact.
Companies interviewed reported disclosing potential financial impacts more often than actual impacts.
Over 90% of consultation respondents identified as users indicated companies’ disclosure of financial
impacts is useful. Users identified the amount of expenditure or capital investment currently deployed towards
climate-related risks and opportunities as particularly useful.

7

The momentum behind TCFD has continued to grow globally with over
2,600 supporters from around the world
Number of TCFD Supporters

TCFD Supporter Market Coverage
USD, Trillions

Financial Institutions

Company Combined Market Capitalization

Other TCFD Supporters
$25tn

+410%
2,616

+73%

$8tn

$9tn

2018

2019

$13tn

1,069

1,512

513

$194tn2018$150tn1,547$100tn

2021

2018

374

$118tn

812

287
226

2021

Financial Institution Assets

700
785

2020

411
2019

2020

Note: These figures represent the number of supporters as of October 14th, 2021 and are found in the TCFD Status Report(2021). The current number of supports is continuously growing and can be found at fsb-tcfd.org/support-tcfd

2019

2020

2021

8

Various jurisdictions are taking steps to encourage or mandate TCFDaligned disclosure requirements
April 2021: The European Commission issued aproposal calling for the development ofsustainability reporting standards that take into
account existing frameworks including the TCFD

June 2021: Switzerland's Financial Market
Supervisory Authority amended disclosurerules for banks and insurers to include
climate-related financial risks, based on TCFD

October 2021: The
Canadian Securities
Administrators
proposed to makeclimate change
disclosures mandatory for
public companies, largely
consistent with the TCFD
recommendations

June 2021: The Tokyo Stock
Exchange issued a revised
Corporate Governance
Code, which now indicatescertain companies should
enhance disclosure basedon TCFD recommendations

2020-2021: Several
UK regulators
issued rules andproposals for
TCFD-aligned
disclosure
August 2021:
Singapore Exchange
Regulation proposed a roadmap for mandatory TCFDaligned disclosure

Top 5 Countries by
Number of Supporters
Japan

527

United Kingdom

384

United States

345

Australia

125

France117

Legend450+

September 2021:
Central Bank of Brazil
issued TCFD-aligned
disclosure rules forregulated institutions

449–350 349–250 249–150 149–100

99–50

49–25

April 2021: Australian Prudential
Regulatory Authority publishes TCFDaligned draft guidance on managing
climate risks

December 2020: The Hong
Kong Monetary Authority
issued draft guidanceindicating authorized
institutions should makeTCFD-aligned disclosures

April 2021:
New Zealand introduced abill that would require
mandatory TCFD-aligned
disclosure for large listed
issuers and financial
institutions.

<25

Number of Supporters

9

Several international initiatives support incorporating the TCFD
recommendations into climate-related reporting standards“We support moving towards mandatory climate-related financial disclosures that provide consistentand decision-useful information for market participants and that are based on the Task Force on
Climate-related Financial Disclosures (TCFD) framework, in line with domestic regulatory
frameworks.”“We acknowledge that mobilizing sustainable finance is essential for global growth and stability and for
promoting the transitions towards greener, more resilient and inclusive societies and economies. We
ask the FSB to work on evaluating the availability of data and data gaps on climate-related financial
stability risks, and on ways to improve climate-related financial disclosures, and to report on thesesubjects in July. We agree on the importance of promoting globally consistent, comparable highquality standards of disclosure for sustainability reporting, building on the recommendationsof the FSB’s Task Force on Climate-related Financial Disclosures.”“The Commission supports initiatives by the G20, the G7, the Financial Stability Board and others togenerate international commitment to develop a baseline of global sustainability reporting
standards that would build on the work of the Task Force on Climate-related Financial
Disclosures.”“The FSB strongly encourages national or regional authorities that are developing requirements
or guidance for climate-related disclosures to consider using the TCFD recommendations as thebasis.”The Trustees’ proposed sustainability standards board “would build upon the well-established workof the Financial Stability Board’s Task Force on Climate-related Financial Disclosures…”“IOSCO welcomes… a prototype for an approach to climate-related disclosures that builds on therecommendations of the Task Force of Climate-related Financial Disclosures.”10

Disclosure increased more between 2019 and 2020 than in any previous
year assessed; however, more progress is needed
TCFD-Aligned Disclosure by Year, for Each Recommended Disclosure

2018

2019

2020

% Point% of Companies Disclosing Information
Recommendation Recommended Disclosure Change ‘18–’20 Aligned with TCFD Recommended Disclosures
Governance

Strategy

RiskManagement

Metrics andTargetsa) Board Oversight16b) Management's Role

9a) Climate-Related Risks
and Opportunities

14b) Impact on Organization

13c) Resilience of Strategy

8a) Risk Identification andAssessment Processesb) Risk Management
Processesc) Integration into Overall
Risk Management

9%
9%

13%
11%

26%
5%

7%

14%

10

b) Scope 1, Scope 2, andScope 3 GHG Emissions

10c) Climate-Related Targets

13

Source: The Task Force’s artificial intelligence analysis of 1,651 public companies.

10%

30%

42%

52%

39%

13%
16%

15

a) Climate-Related Metrics

18%
38%

14

17

25%

20%

30%

17%

29%

17%

27%
34%
27%
21%

24%

31%

40%

44%

37%

34%

11

Companies shared perspectives on the challenges of disclosing thefinancial impact of climate change% of Companies Indicating
Disclosure of Financial Impact1
Not sure

8%

10%

No plans to estimate
or disclose

19%

16%

Planning to disclose

13%

12%

28%

30%

12%

18%

20%

14%

Planning to estimate,
but not necessarily
disclose
Currently estimate,
But do not disclose
Currently disclose% of Users Finding Disclosure
on Financial Impact Useful2
Not at all or not very
usefulSomewhat useful

Very useful

6%

8%

21%

17%

73%

75%

Financial Financial
Performance Position

Preparer Perspectives: Key Findings
At least one in five companies responding to the Task Force’s
consultation said they disclose financial impact, with disclosure of impact
on financial performance more common than impact on financial position
Companies interviewed reported disclosing potential financial impacts
more often than actual impacts
The process of estimating financial impacts can lead to improved internaland external communication, according to findings from preparerinterviews

User Perspectives: Key Findings
Over 90% of respondents that identified as users indicated companies’
disclosure of the financial impacts of climate change is usefulUsers highlighted several areas that would improve the usefulness of
information disclosed on financial impact to support decision making,including disclosure on capital expenditure andRating agencies stated that climate-related financial information is anincreasingly important input into their financial impact assessments,
informing the rating process

Charts based on responses to the Task Force's Consultation on Proposed Guidance on Climate-Related Metrics,
Targets, and Transition Plans.
1. One hundred companies that identified as preparers of disclosure responded to this item (n=100).
2. One hundred and six companies that identified as users of disclosure responded to this item (n = 106) .

12

3
GUIDANCE ON METRICS, TARGETS, AND
TRANSITION PLANS

In 2021, the Task Force developed guidance on metrics, targets, andtransition plans to reflect evolution in disclosure since 2017
Final
Recommendations
and Recommended
Disclosures
Three New Documents in 2021

2017 Final Report

Implementing
Guidance

2017 Implementing
Guidance (Annex)

The 2021 Annex supersedes the 2017 Annex

2021 Implementing
Guidance (Annex)

Additional
Supporting
Materials

Status Reports

2017 Scenario Analysis
Technical Supplement

2020 Guidance on
Risk Management
Integration andDisclosure

2020 Guidance on
Scenario Analysis
for Non-Financial
Companies

2021 Guidance on
Metrics, Targets, andTransition Plans

2018 Status Report2019 Status Report2020 Status Report

2021 Status Report

14

TCFD held a public consultation to gather the latest views frompreparers and users regarding metrics, targets, and transition plans
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 thesurveyScope 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 annex

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.

15

The consultation received 203 survey submissions, 34 letters, and sevenother responses from respondents in various industries and jurisdictions
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

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

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

16

Nearly all respondents were supportive of the Task Force’s public
consultation on its draft guidance01

Respondents indicated that the updated guidance presents
an important step forward in climate disclosure and aconstructive expansion of TCFD recommendations

02

Specifically, respondents supported the introduction of crossindustry, climate-related metric categories, emphasis on forwardlooking metrics, and inclusion of transition plans

03

However, a majority of respondents believed more can be done
to promote comparability, such as sector-specific methodologies
and standardized templates for targets

04

Some concerns were raised with respect to data and methodology
challenges and organizations needing time for implementation,
especially with increasing regulatory expectations

Note: Summary of Responses to the TCFD Public Consultation on Metrics, Targets, and Transition Plans (2021) can befound at https://www.fsb-tcfd.org/publications/17

The guidance emphasizes seven categories of metrics intended tosupport comparability
Metrics in these categories are generally considered drivers of climate-related issues, useful for understanding
management of those risks and opportunities, widely requested, and/or key inputs for estimating financial impacts.
Characteristics of Effective
Climate-Related Metrics

Cross-Industry, Climate-Related Metric Categories

Decision-Useful

GHG Emissions1

Absolute Scope 1, Scope 2, and Scope 3; emissions
intensity

Transition Risks

Amount and extent of assets or business activities
vulnerable to transition risks

Physical Risks

Amount and extent of assets or business activities
vulnerable to physical risks

Climate-Related
Opportunities

Proportion of revenue, assets, or other business activitiesaligned with climate-related opportunities

Capital
Deployment

Amount of capital expenditure, financing, or investment
deployed toward climate-related risks and opportunities• CurrentInternal Carbon
PricesPrice on each ton of GHG emissions used internally by anorganization• HistoricalRemuneration

Proportion of executive management remuneration
linked to climate considerations

Clear and Understandable

Reliable, Verifiable, andObjective

Consistent Over Time

• Forward-Looking

1. 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 a materiality
assessment; however, the Task Force encourages organizations to disclose such emissions.

18

It reinforces key characteristics of effective disclosure of climaterelated targets, including the importance of interim targets
Characteristics of Effective
Climate-Related Targets
Aligned with Strategy and Risk
Management Goals

Example Relationship between Metrics and Targets (Hypothetical Firm)
Target: Our firm commits to reducing net Scope 1 and 2 GHG emissions—asdefined by the GHG Protocol—to zero by 2050, with an interim target to cut Scope
1 and 2 GHG emissions by 50% relative to a 2015 baseline by 2030. We areworking with suppliers to reduce Scope 3 GHG emissions.
Current Metrics

Linked to Relevant Metrics

Historical Metrics

Forward-Looking Information

Clearly Specified over Time
• Baseline• Time horizon• Interim targets
Understandable andContextualized
Periodically Reviewed and Updated

CO2–Equivalent GHG Emissions (Tonnes)

Quantified and Measurable-20%

Interim target

-100%

-50%
Historical data
Company target GHG emissions path
GHG emissions under current policies scenario-70%

GHG emissions under delayed 2°C scenario
GHG emissions under immediate 2°C scenario

Reported Annually-90%

GHG emissions under 1.5°C scenario

2000

2005

2010

2015

2020

2025

Note: GHG emissions pathways were adapted from NGFS scenario data. Illustrative GHG emissions pathways for
immediate and delayed 2°C scenarios and 1.5°C scenarios are aligned with economy-wide GHG emissions reductions
for Kyoto gases under the REMIND limited Carbon Dioxide Removal (CDR) scenarios. The illustrative current policies
scenario extends the short-term trend.

2030

2035

2040

2045

2050

19

Additionally, it assists companies with disclosing information related totheir plans to transition to a low-carbon economy
A company’s transition plan refers to an aspect of its overall business strategy that lays out a set of targets andactions supporting its transition toward a low-carbon economy, including actions such as reducing its GHG
emissions.
Characteristics of Effective Transition Plans

Key Information from Transition Plans to Disclose

Aligned with strategy

Current GHG emissions performance

Anchored in quantitative elements, including
climate-related metrics and targets

Impact on businesses, strategy, and financial
planning from a low-carbon transition

Subject to effective governance processes

Actions and activities to support transition (e.g.,changes to businesses and strategy to reduce GHG
emissions)

Actionable, specific initiatives
Overall business strategy

Credible
Periodically reviewed and updated
Reported annually to stakeholders

Climate strategy

Transition and adaptation
plans

20

Finally, it describes types of information organizations could disclose on
financial impacts of climate change as well as real-world examples
Category

Description

Impact of ClimateRelated Risks or
Opportunities on
Financial
Performance

Actual or potential changes to income and cash flow statements
or other financial performance measures as a result of climaterelated risks and opportunities may provide insight into
management priorities and strategic efforts. Impact on financial
performance can include the following:• increases in revenue from new products or services fromclimate opportunities;• increases in cost due to carbon prices, business interruption,
contingency, or repairs;• changes to operating cash flow from changes in upstream
costs;• impairment charges due to assets exposed to transition risks;and• changes to total expected losses due to physical risks.

Impact of ClimateRelated Risks or
Opportunities on
Financial Position

Changes to the balance sheet statement as a result ofclimate-related risks and opportunities can include thefollowing:• changes to the carrying amount of assets due to exposure
to physical and transition risks;• changes to the expected portfolio value given climaterelated risks and opportunities; and• changes in liability and equity due to increases ordecreases in assets (e.g., due to low-carbon capital
investments or to sale or write-offs of stranded assets)

Sources: Enel, Integrated Annual Report 2020, p. 113; Meridian Energy, Climate Change Disclosures Meridian Energy
Limited FY20, p. 11. ; Eni, Eni for 2020: Carbon neutrality by 2050, 2020, p. 20.; Eni, Eni for 2020: Carbon neutrality by
2050, 2020, p. 20.; Invesco, 2019 Invesco Climate Change Report, p. 31.

Example Excerpts

21

42021 ANNEX

The Task Force updated its “Annex” to address key elements of the
Guidance on Metrics, Targets, and Transition Plans
Final
Recommendations
and Recommended
Disclosures

No changes were made to recommendations and recommended disclosures in orderto provide consistency over time and support effective development of disclosure
standards and requirements

Three New Documents in 2021

2017 Final Report

Implementing
Guidance

Discrete changes to guidance for all sectors andsupplemental guidance for specific sectors based on
Guidance on Metrics, Targets, and Transition Plans

2017 Implementing
Guidance (Annex)

The 2021 Annex supersedes the 2017 Annex

2021 Implementing
Guidance (Annex)

Additional
Supporting
Materials

Status Reports

2017 Scenario Analysis
Technical Supplement

2020 Guidance on
Risk Management
Integration andDisclosure

2020 Guidance on
Scenario Analysis
for Non-Financial
Companies

2021 Guidance on
Metrics, Targets, andTransition Plans

2018 Status Report2019 Status Report2020 Status Report

2021 Status Report23

Updates to Implementing the Recommendations of the Task Force on
Climate-related Financial Disclosures (TCFD annex) (1/2)
Section of Annex

A Introduction

B Recommendations
for allC Guidance
Sectors

Key Changes• 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.
• 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.
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

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

D Supplemental
Guidance for the
Financial Sector
Banks

Key Changes
Strategy• 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
Supplemental
Guidance for the• Added disclosure of the extent to which insurance underwriting activities are aligned with a well
Financial Sector
below 2°C scenario.
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

Metrics and Targets

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.
• 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

25

APPENDIX

This year’s work focused on the status of climate-related financial
disclosures and guidance on metrics, targets, and transition plans
New Publications Released in October 2021

Public Consultations and Responses

2021 Status Report

The Task Force issued two public consultations
between October 2020 and June 2021 to help
inform the development of its guidance on
metrics, targets, and transition plans.

• Describes progress on and current state of disclosure
practices in terms of alignment with therecommendations• Summarizes public- and private-sector developments
supporting the TCFD framework since October 2020
• Discusses users and preparers' views on disclosure of
the financial impact of climate change on companies
Guidance on Metrics, Targets, and Transition Plans• Describes developments on climate-related metrics,
targets, and transition plans since 2017
• Highlights key metrics, targets, and transition plan information users identified as important for decision-making• Provides guidance and disclosure examples to support
companies’ implementation efforts
2021 Implementing the Recommendations of the TCFD (Annex)• Incorporates guidance on climate-related metrics,
targets, and transition plans• Incorporates references to previously issued Task Force
guidance to help companies with implementation• Updates and replaces the annex published in 2017

1. Forward-Looking Financial Sector Metrics
Solicited input on usefulness
and challenges of specificclimate-related metrics forthe financial sector.

2. Proposed Guidance on Climate-Related
Metrics, Targets, and Transition Plans
Solicited input on usefulness
and challenges of climaterelated metrics and targets andtransition plan information.
Also sought feedback on
proposed changes toimplementation guidanceissued in 2017.
Feedback from the consultations was critical inrefining the Task Force’s final guidance.

27

Recommendations and Recommended Disclosures (June 2017)
Governance

Strategy

Risk Management

Metrics and Targets

Disclose the organization’s
governance around climaterelated risks and opportunities.

Disclose the actual andpotential impacts of climaterelated risks and opportunities
on the organization’s
businesses, strategy, andfinancial planning where suchinformation is material.

Disclose how the organization
identifies, assesses, andmanages climate-related risks.

Disclose the metrics andtargets used to assess andmanage relevant climaterelated risks and opportunities
where such information ismaterial.

Recommended Disclosures

Recommended Disclosures

Recommended Disclosures

Recommended Disclosuresa) Describe the board’sa) Describe the climate-relatedrisks and opportunities theorganization has identified
over the short, medium, andlong term.

a) Describe the organization’s
processes for identifying andassessing climate-relatedrisks.

a) Disclose the metrics used by
the organization to assessclimate-related risks andopportunities in line with its
strategy and risk
management process.

b) Describe management’s roleb) Describe the impact ofclimate-related risks andopportunities on theorganization’s businesses,
strategy, and financial
planning.

b) Describe the organization’s
processes for managing
climate-related risks.

b) Disclose Scope 1, Scope 2,
and, if appropriate, Scope 3
greenhouse gas (GHG)
emissions, and the relatedrisks.

c) Describe the resilience of theorganization’s strategy,
taking into considerationdifferent climate-related
scenarios, including a 2°C or
lower scenario.

c) Describe how processes for
identifying, assessing, andmanaging climate-relatedrisks are integrated into theorganization’s overall risk
management.

c) Describe the targets used by
the organization to manage
climate-related risks andopportunities andperformance against targets.

oversight of climate-relatedrisks and opportunities.

in assessing and managing
climate-related risks andopportunities.

28

TCFD-aligned disclosure practices by industry
Disclosure by Industry: 2018-2020 Reporting
Industry

Average percentage bydisclosure year

Pt. change(’18-’20)

Sample
size

2018

2019

2020

Materials andBuildings

21%

26%

38%

Energy

24%

31%

36%

12%

267

Insurance

22%

23%

34%

12%

132

Ag., Food, andForest Products

20%

21%

30%

10%

142

Banking

15%

20%

28%

13%

282

Transportation

17%

20%

26%

9%

158

Consumer Goods

15%

18%

26%

11%

160

Technology and
Media

11%

12%

16%

5%

106

17%

Key Takeaways•

Materials and Buildings companies now lead on TCFDaligned disclosure vs Energy in 2019 and 2018.
– The average level of disclosure across the 11 recommended
disclosures for fiscal year 2020 was 38%

404– Materials and Buildings also shows the fastest growth rate
in disclosures, with a 17-percentage point increase since
2018•

The Energy sector discloses the second most, with 36%
disclosure on average across the 11 recommended
disclosures•

Different industries prioritize different recommended
disclosures.
– The Insurance industry leads all groups by at least 15
percent in disclosure of risk management processes– The Energy industry has the highest disclosure of climaterelated risks and opportunities (Risk Management b)•

Groups considered less carbon intensive disclose less.
– The Technology and Media sector has made the smallest
improvements in disclosures, increasing by five percentage
points since 2018
– Technology and Media companies have 16% disclosure on
average across the recommended disclosures

Source: The Task Force’s artificial intelligence analysis of 1,651 public companies.

29

TCFD-aligned disclosure practices by region
Disclosure by Region: 2018-2020 Reporting
RegionAverage percentage bydisclosure year

Key Takeaways

Pt. change(’18-’20)

Sample
size

2018

2019

2020

Europe

28%

35%

50%

22%

424

Asia Pacific

19%

25%

34%

15%

333

Latin America

11%

18%

26%

15%

52

Middle East andAfrica

10%

16%

22%

12%

80

North America

15%

16%

20%

5%

762

Disclosure by Region: 2018-2020 Reporting for Top
50 Companies by 2020 Revenue
RegionAverage percentage bydisclosure year

Pt. change(’18-’20)

2018

2019

2020

Europe

45%

53%

68%

23%

North America

32%

28%

42%

10%

Asia Pacific

23%

25%

36%

13%

Latin America

11%

19%

27%

16%

Middle East andAfrica

13%

21%

27%

14%

Source: The Task Force’s artificial intelligence analysis of 1,651 public companies.

•

Europe remains the leading region for disclosures, withaverage level of reporting across the 11 recommended
disclosures from fiscal year 2020 now at 50%•

European companies analyzed now disclose 16 percentage
points more than the next closest region (Asia Pacific)•

Asia Pacific had 15 percentage point growth in disclosure
since 2018, disclosing the second most at 34%•

Reporting in Latin America and the Middle East and Africa hascontinued to progress over the past year, with reporting at
26% and 22% respectively, up from 11% and 10% in 2018•

North America disclosure is at 20% across all companies
assessed, however; this is likely skewed by the large numberof North American companies reviewed•

For the top 50 companies by revenue in 2020, North
America discloses second most at 42% (versus Europe’s 68%)

30

TCFD-aligned disclosure practices by market capitalization
Disclosure by Market Cap: 2018-2020 Reporting
Company size

Average percentage bydisclosure year

Pt. change(’18-’20)

Sample
size

2018

2019

2020

>$12.2B Market
Capitalization
(542)

29%

33%

44%

15%

542

$3.4–12.2B
MarketCapitalization
(541)

18%

22%

31%

13%

541

<$3.4B Market
Capitalization
(540)

10%

14%

20%

10%

540

Note: 28 companies were not included due to insufficient market cap data
Source: The Task Force’s artificial intelligence analysis of 1,651 public companies.

Key Takeaways•

While reporting by the largest companies remained stronger
than reporting by smaller companies, fewer than half of thelargest companies reviewed are reporting climate-related
information in line with the TCFD recommendations.
– Only forty-four percent of companies assessed with amarket capitalization in the top third (greater than
$12.2B) disclosed information aligned with the TCFD
recommendations in 2020
– Meanwhile, 20% of companies with a market
capitalization in the bottom third (less than $3.4B)
disclosed the same information•

Disclosure from the largest companies continue to growthe fastest, with a 15-percentage point increase in disclosure
since 2018.

•

There has been encouraging growth in reporting bycompanies in the bottom two thirds (less than $3.4B and$3.4-12.2B market capitalizations), with six and nine
percentage point growth, respectively.

31

Cross-Industry Climate-Related Metric Categories (1/2)
Metric Category

Example Unit of Measure1

Rationale for Inclusion

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

MT of CO2e

Disclosure of GHG emissions is crucial for users to understand an organization’s exposure toclimate-related risks and opportunities. Disclosure of both absolute emissions across anorganization’s value chain and relevant emissions intensity provides insight into how a given
organization may be affected by policy, regulatory, market, and technology responses to limit
climate change.

Transition Risks
Amount and extent of assets orbusiness activities vulnerable
to transition risks*

Amount or percentage

Disclosure of the amount and extent of an organization’s assets or business activities vulnerable toclimate-related transition risks allows users to better understand potential financial exposure
regarding such issues as possible impairment or stranding of assets, effects on the value of assets
and liabilities, and changes in demand for products or services.

Physical Risks
Amount and extent of assets orbusiness activities vulnerable
to physical risks*

Amount or percentage

Disclosure of the amount or extent of an organization’s assets or business activities vulnerable tomaterial climate-related physical risks allows users to better understand potential financial
exposure regarding such issues as impairment or stranding of assets, effects on the value of assets
and liabilities, and cost of business interruptions.

Climate-Related
Opportunities
Proportion of revenue, assets,or other business activitiesaligned with climate-related
opportunities

Amount or percentage

Disclosure of the proportion of revenue, assets, or business activities aligned with climate-related
opportunities provides insight into the position of organizations relative to their peers and allows
users to understand likely transition pathways and potential changes in revenue and profitability
over time.

Note: While some organizations already disclose metrics consistent with these categories, the Task Force recognizes others—especially those 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 metriccategories may be less applicable to certain organizations. For example, data and methodologies for certain metrics for asset owners (e.g., impact of climate change on
investment income) are in early stages of development. In such cases, the Task Force recognizes organizations will need time before such metrics are disclosed to theirstakeholders.
On the 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 Force encourages organizations to disclose such emissions. The othercross-industry, climate-related metric categories remain subject to materiality. Organizations should determine materiality for climate-related metrics consistent with howthey determine the materiality of other 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 fund managers, financialorganizations may find it more difficult to quantify exposure to climate-related risks. The Task Force suggests that financial organizations provide qualitative andquantitative information, when available.
1. The Task Force has noted the most common unit of measure. There are multiple ways to measure and disclose
metrics, and different jurisdictions or industries may follow different practices. Allowing for differences in units ofmeasure can help provide organizations with flexibility without significantly impacting comparability as long as units
are clearly stated.

32

Cross-Industry Climate-Related Metric Categories (2/2)
Metric Category

Example Unit of Measure1

Rationale for Inclusion

Capital Deployment
Amount of capital expenditure,
financing, or investment
deployed toward climaterelated risks and opportunities

Reporting currency

Capital investment disclosure by non-financial organizations and financing by financial organizations
gives an indication of the extent to which long-term enterprise value might be affected.

Internal Carbon Prices
Price on each ton of GHG
emissions used internally by anorganization

Price in reporting currency, per MT
of CO2eInternal carbon prices provide users with an understanding of the reasonableness of anorganization’s risk and opportunity assessment and strategy resilience. The disclosure of internalcarbon prices can help users identify which organizations have business models that are vulnerable
to future policy responses to climate change and which are adapting their business models toensure resilience to transition risks.

Remuneration
Proportion of executive
Management remuneration
linked to climate
considerations**

Percentage, weighting, description,or amount in reporting currency

Remuneration policies are important incentives for achieving an organization’s goals and objectives
and may provide insight on an organization’s governance, oversight, and accountability for
managing climate-related issues.

Note: While some organizations already disclose metrics consistent with these categories, the Task Force recognizes others—especially those 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 metriccategories may be less applicable to certain organizations. For example, data and methodologies for certain metrics for asset owners (e.g., impact of climate change on
investment income) are in early stages of development. In such cases, the Task Force recognizes organizations will need time before such metrics are disclosed to theirstakeholders.
On the 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 Force encourages organizations to disclose such emissions. The othercross-industry, climate-related metric categories remain subject to materiality. Organizations should determine materiality for climate-related metrics consistent with howthey determine the materiality of other information included in their financial filings.
**Remuneration: While the Task Force encourages quantitative disclosure, organizations may include descriptive language on remuneration policies and practices, suchas how climate change issues are included in balanced scorecards for executive remuneration.

1. The Task Force has noted the most common unit of measure. There are multiple ways to measure and disclose
metrics, and different jurisdictions or industries may follow different practices. Allowing for differences in units ofmeasure can help provide organizations with flexibility without significantly impacting comparability as long as units
are clearly stated.

33

Task Force Members (1/3)

Michael Bloomberg
Chair
Founder
Bloomberg LP and Bloomberg Philanthropies
Denise Pavarina
Vice Chair
Senior Advisor
Aggrego Consultores

Graeme Pitkethly
Vice Chair
Chief Financial Officer
Unilever

Yeo Lian Sim
Vice Chair
Special Advisor, Diversity
Singapore Exchange

Christian Thimann
Vice Chair
Former CEO and Chairman of the Management Board
Athora Germany (Until June 2021)

Mary Schapiro
Vice Chair for Global Public Policy andSpecial Advisor to the Founder and Chair
Bloomberg LP

34

Task Force Members (2/3)

Jane Ambachtsheer
Global Head of Sustainability
BNP Paribas Asset Management

Wim Bartels
Partner, Corporate Reporting
KPMG

Bruno Bertocci
Managing Director, Head of Sustainable Investors
USB Asset Management

David Blood
Senior Partner
Generation Investment Management

Marisa BuchananManaging Director, Head of Sustainability
JPMorgan Chase & Co.

Richard Cantor
Chief Credit Officer
Moody’s Corporation

Koushik ChatterjeeGroup Executive Director, Finance and Corporate
Tata Steel Limited

Mary Draves
Chief Sustainability Officer and Vice President of Environment,
Health, and Safety
Dow

Takehiro Fujimura
General Manager, Corporate Sustainability & CSR
Mitsubishi Corporation

Rosanna Fusco
Head of Climate Change Strategy and Positioning
Eni

Alan X. Gómez Hernández
Head of Sustainability
Citibanamex

Thomas Kusterer
Chief Financial Officer
EnBW Energie Baden-Wurttemberg AG

Geraldine Leegwater
Chief Investment Management
PGGM

Mark Lewis
Head of Climate Research
Andurand Capital Management

35

Task Force Members (3/3)

Ruixia Liu
Chief Expert of Task Force of Climate Risk Management (TCRM)
Industrial and Commercial Bank of China

Richard Manley
Managing Director, Head of Sustainable Investing
CPP Investments

Masaaki Nagamura
Fellow International Initiatives
Tokio Marine Holdings, Inc.

Mathew Nelson
Leader for Climate Change and Sustainability Services
EY

Catherine Saire
Partner, Sustainability Services
Deloitte

Ashley Schulten
Managing Director, Head of ESG Investment
BlackrockMartin Skancke
Chair, Risk Committee
Storebrand

Sylvain Vanston
Group Head of Climate Change
AXA

Steve Waygood
Chief Responsible Investment Officer
Aviva Investors

Martin Weymann
Head Sustainability, Emerging & Political Risk Management, Group Risk
Management
Swiss Re

Fiona Wild
Vice President, Sustainability and Climate Change
BHP

Michael Wilkins
Senior Research Fellow, Sustainable Finance
S&P Global Ratings

Jon Williams
Partner, Sustainability and Climate Change
PwC

Russell Picot (Special Advisor)
Chair, Trustee Board
HSBC Bank (UK) Pension Scheme
Former Group Chief Accounting Officer, HSBC
Deputy Chair, Chair of Investment CommitteeUSS36