Task Force on
Climate-related
Financial Disclosures
2021 Status Report

October 2021

Mr. Randal K. Quarles
Chair
Financial Stability Board
Bank for International Settlements
Centralbahnplatz 2
CH-4002 Basel
Switzerland

September 15, 2021

Dear Chair Quarles,
The Task Force on Climate-related Financial Disclosures (Task Force or TCFD) has had an exceptional
year rallying global support for consistent and transparent climate risk reporting. The Task Force’s
recommendations are leading the way for companies around the world to disclose the risks andopportunities they face due to climate change — and for governments to address the issue. To summarize
our latest progress, it is my pleasure to share our fourth annual status report with you.
Since our last report in September 2020, public- and private-sector support for the TCFD
recommendations has accelerated rapidly. When the recommendations were released in 2017, few
organizations accepted climate change as a major financial risk. Since then, the Task Force has raised the
profile of climate disclosures as a pressing issue, both for businesses and for the planet. And the TCFD
recommendations have become the global standard that guides private sector disclosures, informing newlaws and regulations and garnering notable endorsements from the G7 and G20. Today, organizations
are integrating climate risk into their financial risk frameworks, and governing bodies are incorporating
our recommendations into official disclosure requirements — including the European Union, the United
Kingdom, Switzerland, New Zealand, and Hong Kong. To date, 12 governments and dozens of central
banks, supervisors, and regulators have formally expressed support for the TCFD recommendations,and more than 2,600 organizations have now endorsed them, an increase of over 70% since last year.
The momentum we have built is helping to ensure that organizations throughout the global economy
understand and appreciate the role of climate change as a financial risk around the world. Our recent
review of more than 1,600 companies found the greatest-ever growth in disclosures aligned with the TCFD
recommendations. At the same time, companies continue to struggle to quantify the impacts of climatechange, and to source the data they need to fully assess the threats of a changing climate.
Our efforts to increase and improve these disclosures are only growing more important. Markets are
increasingly looking to channel funds to sustainable and resilient investments, and it is critical thatclimate reporting requirements are standardized across jurisdictions to help investors and consumers
make decisions. To that end, the Task Force is supporting efforts to develop global baseline sustainability
reporting standards built on our original recommendations.
Fighting climate change requires an all-hands-on-deck approach — and the Task Force’s work is vitalto securing a more sustainable and resilient future. Thank you for your continued support.
Sincerely,

Michael R. Bloomberg

1

The Task Force on Climate-related Financial Disclosures

Executive Summary
In June 2017, the Financial Stability Board’s
Task Force on Climate-related Financial
Disclosures (Task Force or TCFD) released its final
recommendations, providing a global framework
for companies and other organizations todevelop more effective climate-related financial
disclosures through their existing reporting
processes (Figure ES1).1 In its report, theTask Force emphasized the importance oftransparency in pricing of risk — including risk
related to climate change — to support informed,
efficient capital allocation decisions.
Global momentum behind the Task Force’s
work has grown significantly over the past
year (Figure ES2). Multiple jurisdictions haveproposed or finalized laws and regulations
to require disclosure aligned with the TCFD
recommendations — some coming into effectas early as 2022. The TCFD recommendations
are also the basis upon which international
accounting standard setters are building global
standards for climate risk disclosure.
These developments have taken place within abroader international focus on climate-related
risk as impacts of climate change have continued
to result in tangible and severe physical harm.
Simultaneously, a range of governments andprivate sector organizations are working tooperationalize public commitments to transition
to a low- or zero-carbon economy. In a rapidly
evolving climate risk landscape, transparency on
climate-related issues is increasingly critical forinvestors, lenders, and insurance underwriters tomake informed economic decisions.
At the request of the FSB, the Task Force has
issued four annual status reports describing
the alignment of companies’ reporting with
the TCFD recommendations. This fourthreport provides an update on key TCFD-related
developments and initiatives supporting the
TCFD as well as the results of the Task Force’s
annual review of climate-related reporting.
The report also describes key findings from an

1

Figure ES1
The Task Force’s Remit
In April 2015, the G20 Finance Ministers andCentral Bank Governors asked the Financial
Stability Board (FSB) to convene public- andprivate-sector participants to review how thefinancial sector can take account of climate-related
issues. As part of its review, the FSB identified theneed for better information to support informed
investment, lending, and insurance underwriting
decisions and improve understanding of climaterelated risks.
To help identify the information needed toassess and price climate-related risks, the FSB
established an industry-led task force — the TCFD.
The FSB asked the TCFD to develop voluntary
climate-related financial disclosures that would be
useful to investors and others in understanding
material risks.

analysis of disclosures on the financial impact
of climate-related risks and opportunities oncompanies’ businesses and strategies. Overall,
the Task Force is pleased to see increased
maturity in climate-related disclosure efforts
but believes significant work remains to“mainstream” consideration of climate-related
issues within financial decision-making.

INITIATIVES SUPPORTING TCFD
Since the release of the 2020 TCFD status report,over 1,000 additional organizations have pledged
support for the TCFD recommendations. As of
October 6, 2021, the Task Force had over 2,600
supporters globally, including 1,069 financial
institutions, responsible for assets of $194
trillion. TCFD supporters now span 89 countries
and jurisdictions and nearly all sectors of theeconomy, with a combined market capitalizationof over $25 trillion — a 99% increase since lastyear, as shown in Box ES1 (p. 4).

In this report, the Task Force uses the term “companies” to refer to entities with public debt or equity as well as asset managers and asset owners,
including public- and private-sector pension plans, endowments, and foundations.

2The Task Force on Climate-related Financial Disclosures

Box ES1

TCFD 2021 Year in Review
Continued Growth in Support

2,600+

TCFD Supporters Globally
8
7

8

2

TCFD-Aligned Official
Reporting Requirements

4
3

1

5

Countries/jurisdictions with TCFD supporters

120+

Regulators and Governmental
Entities

89

New Zealand

2 European Union

6

Singapore

3 Hong Kong

7

Switzerland

4 Japan

8

United Kingdom

BrazilJurisdictions with announcements of TCFD-aligned
reporting requirements

Countries and Jurisdictions
Represented

Number of TCFD Supporters

5

1

6

$194 tn$25 tnAssetsCombined Company Market
Capitalization

TCFD Supporter Market Coverage
2,616

USD trillions$25 tn

1,069

+410%
1,512

$8 tn

$9 tn

2018

2019

$13 tn2020

Company Combined Market Capitalization$194 tn

700
785
513

226

$150 tn$100 tn$118 tn

812

287

2018

1,547

374

2021

411
2019

Financial Institutions

2020

2021

Other Supporters

2018

2019

Financial Company Assets

2020

2021

Making Headlines“We support moving towards
mandatory climate-related financial
disclosures that provide consistentand decision-useful information formarket participants and that are
based on the Task Force on Climaterelated Financial Disclosures (TCFD)
framework, in line with domestic
regulatory frameworks.”“The commission supports initiatives
by the G20, the G7, the Financial
Stability Board and others to generateinternational 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.”– G7 Finance Ministers & Central Bank
Governors Communiqué– European Commission Corporate
Sustainability Reporting Directive“(Mandatory) reporting will bebased on the Task Forceon Climate-related Financial
Disclosures (TCFD) framework,
which is widely acknowledged
as international best practice.”– Hon. Dr. David Clark and Hon. James Shaw,
New Zealand Parliament

Research and Engagement

26

User and Preparerinterviews on challenges
and uses of climaterelated financial impact
disclosures

1,651

Companies’ disclosuresreviewed with AI

220+

Responses to Consultation
on Forward-Looking
Metrics

Publications

2021 Status Report240+

Responses to Consultation
on Proposed Guidanceon Climate-Related
Metrics, Targets,
and Transition Plans

Consultation Responses

2021 Implementing
the Recommendationsof the Task Forceon Climate-related
Financial Disclosures(2021 annex)

Guidance on Metrics,
Targets, and Transition
Plans

Forward-Looking
Financial Metrics
Consultation:
Summary of Responses

Metrics, Targets,
and Transition Plans
Consultation:
Summary of Responses

4The Task Force on Climate-related Financial Disclosures

As support from the private sector has grown,
governments around the world have begun to
codify aspects of the TCFD recommendations
into policy and regulation, using the Task
Force’s work as a foundation for climate-related
reporting requirements. In addition to the
support of dozens of regulators and supervisors,

Brazil, the European Union, Hong Kong, Japan,
New Zealand, Singapore, Switzerland, and theUnited Kingdom have announced requirements
for domestic organizations to report in alignment
with the TCFD recommendations, as summarized
in Figure ES2.

Figure ES2
Announcements of Official TCFD-Aligned Reporting Requirements
Brazil: In April 2021, the Central Bank of Brazil (BCB) issued a public consultation on rules for disclosure of social,environmental, and climate-related risk management by institutions of the National Financial System (SFN). In
September 2021, BCB announced mandatory TCFD-aligned disclosure requirements, which will initially focus
on qualitative aspects related to governance, strategy, and climate-related risk management for regulated
institutions, with a second phase incorporating quantitative aspects.
European Union: In April 2021, the European Commission issued a proposed Corporate Sustainability Reporting
Directive (CSRD) that would amend existing reporting requirements. The EC noted that the reporting standards
should take into account existing standards and frameworks, including the TCFD framework, which would lead to
TCFD-aligned reporting for nearly 50,000 large companies with a presence in the European Union.
Hong Kong: In December 2020, Hong Kong’s Green and Sustainable Finance Cross-Agency Steering Grouppublished a new Strategic Plan, announcing that TCFD-aligned disclosures “will be mandatory” across relevant
financial sectors by 2025.2 The Steering Group pledged to “increase the coverage of mandatory disclosure assoon as practicable.”
Japan: In June 2021, the Tokyo Stock Exchange published a revised Corporate Governance Code (the Code) basedon the proposals made by Japan’s Council of Experts Concerning the Follow-up of Japan’s Stewardship Code andJapan’s Corporate Governance Code. Under revised Securities Listing Regulations, the Code requires certain
listed companies to enhance the quality and quantity of climate-related financial disclosures based on the TCFD
recommendations, with effect from June 11, 2021.
New Zealand: In September 2020, New Zealand announced plans to mandate climate-related financial
disclosures aligned with the TCFD recommendations for approximately 200 organizations, including mostlicensed insurers, listed issuers, large registered banks, and managers of investment schemes. In April 2021,
New Zealand introduced the Financial Sector (Climate-related Disclosure and Other Matters) Amendment Bill.
If passed, legislation would enter into force within 12 months after receiving Royal assent.
Singapore: In August 2021, the Singapore Exchange Regulation proposed a road map for mandatory TCFDaligned disclosure. Starting in 2022, all issuers would be required to adopt TCFD-aligned reporting on a comply
or explain basis. Disclosure would become mandatory in 2023 for companies in key industries including financeand transportation, and in most industries in 2024. Public consultation on the proposed road map ended on
September 27, 2021.
Switzerland: In December 2020, Switzerland’s Federal Council indicated the authorities should prepare thebinding implementation of the recommendations of the TCFD for Swiss companies across all sectors of theeconomy. In July 2021, the Swiss Financial Market Supervisory Authority (FINMA) amended its circulars to include
the disclosure of climate-related financial risks based on the TCFD recommendations.
In August 2021, the Swiss Federal Council instructed the Federal Department of Finance to prepare a consultation
draft for mandatory climate reporting based on the TCFD by summer 2022.
United Kingdom: In November 2020, the UK’s Chancellor of the Exchequer announced the UK’s intention to
mandate climate disclosures by large companies and financial institutions by 2025. In December 2020, theFinancial Conduct Authority introduced new rules for companies with a UK premium listing to disclose climaterelated risks and opportunities in line with the TCFD recommendations on a comply or explain basis.
In June 2021, the FCA published further proposals to extend TCFD-aligned disclosure requirements to issuersof standard listed equity shares and introduce TCFD-aligned disclosure requirements for asset managers, life
insurers, and FCA-regulated pension providers.

2 ong Kong’s Green and Sustainable Finance Cross-Agency Steering Group was established in May 2020 and is co-chaired by the Hong Kong Monetary
H
Authority and the Securities and Futures Commission. Additional members comprise the Environment Bureau, Financial Services and the Treasury
Bureau, Hong Kong Exchanges and Clearing Limited, the Insurance Authority, and the Mandatory Provident Fund Schemes Authority. The group aims
to coordinate the management of climate and environmental risks to the financial sector, among other sustainable finance activities.

5

The Task Force on Climate-related Financial Disclosures

International standard setters are also building
upon the TCFD recommendations to incorporate
climate-related issues within their disclosure
standards. Earlier this year the Trustees of theInternational Financial Reporting Standards (IFRS)Foundation signaled their intentions to establish
an International Sustainability Standards Board(ISSB) under the IFRS reporting framework.
Based on public feedback and encouragementfrom the International Organization of Securities

Commissions (IOSCO), the IFRS Foundation
pledged to “build upon the well-establishedwork” of the TCFD as a basis for its international
climate-related disclosure standards. Manyorganizations have issued official statements insupport of the TCFD recommendations as thebasis for international climate-related disclosure
efforts, either within the IFRS Foundation’s workor more broadly. Several of these statements arereferenced in Table ES1.

Table ES1

Support from International Standard Setters
and Regulators for TCFD
Organization(source hyperlinked)

3

Statement of Support

G7 Finance
Ministersand Central Bank
Governors“We support moving towards mandatory climate-related financial
disclosures that provide consistent and decision-useful information
for market participants and that are based on the Task Force on Climaterelated Financial Disclosures (TCFD) framework, in line with domestic
regulatory frameworks.”

G20 Finance
Ministers andCentral Bank
Governors“We will work to promote implementation of disclosure requirements
or guidance, building on the FSB’s Task Force on Climate-related
Financial Disclosures (TCFD) framework, in line with domestic regulatory
frameworks, to pave the way for future global coordination efforts.”

Financial Stability
Board“The TCFD framework provides a basis for initiatives that jurisdictions
may wish to take, based on domestic regulatory frameworks, while work
towards a global baseline corporate reporting standard progresses.
FSB and other bodies will promote consistent approaches among nationaland regional climate disclosure initiatives, using frameworks based on
the TCFD Recommendations.”

International
Financial ReportingStandards
Foundation“The new (International Sustainability Standards Board) would build
upon the well-established work of the Financial Stability Board’s Task Forceon Climate-related Financial Disclosures (TCFD).”International
Organizationof Securities
Commissions“IOSCO has strongly encouraged the ISSB to leverage the content of existingsustainability related reporting principles, frameworks and guidance,
including the TCFD’s recommendations, as it develops investor-oriented
standards focused on enterprise value, beginning with climate change.”“The alliance” 3“Given that the market is embracing the TCFD Recommendations to help
investors and others understand how reporting organizations assessclimate-related risks and opportunities, development of such a (global
sustainability reporting) standard would be timely.”

EuropeanCommission“The Commission supports initiatives by the G20, the G7, the Financial
Stability Board and others 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 alliance” was previously known as the Group of Five and comprises the CDP, the Climate Disclosure Standards Board (CDSB), the Global
Reporting Initiative (GRI), and the Value Reporting Foundation (previously the IIRC and SASB).

6

The Task Force on Climate-related Financial Disclosures

STATE OF CLIMATE-RELATED FINANCIALDISCLOSURESIn welcoming the 2020 TCFD status report, the
FSB asked the Task Force to publish a fourthannual status report in 2021.4 Consistent withprevious years, this status report provides an
overview of the growth and current state ofclimate-related financial disclosures by publiccompanies. The Task Force reviewed the reportsof 1,651 public companies over three years, as
described in Section B1. TCFD-Aligned Reportingby Public Companies, and assessed whether
the reports included information that appeared
to align with one or more of the Task Force’s 11
recommended disclosures (Table ES2).

Table ES2

TCFD Recommendations and Supporting
Recommended Disclosures

4

Governance

Strategy

Risk Management

Metrics and Targets

Disclose the company’s
governance aroundclimate-related risks andopportunities.

Disclose the actual andpotential impacts ofclimate-related risks andopportunities on thecompany’s businesses,
strategy, and financial
planning where suchinformation is material.

Disclose how thecompany identifies,
assesses, and manages
climate-related risks.

Disclose the metrics andtargets used to assess
and manage relevant
climate-related risks
and opportunities wheresuch information ismaterial.

a) D escribe the board’s
oversight of climaterelated risks andopportunities.

a) D escribe the climaterelated risks andopportunities thecompany has identified
over the short,medium, and long
term.

a) D
 escribe thecompany’s processes
for identifying andassessing climaterelated risks.

a) D isclose the metrics
used by the company toassess climate-relatedrisks and opportunities
in line with its strategy
and risk management
process.

b) D escribe management’s
role in assessing andmanaging climaterelated risks andopportunities.

b) D escribe the impact ofclimate-related risks
and opportunities
on the company’sbusinesses, strategy,
and financial planning.

b) D escribe thecompany’s processes
for managing climaterelated risks.

b) D isclose Scope 1, Scope2, and, if appropriate,
Scope 3 greenhousegas (GHG) emissions,and the related risks.

c) D escribe the resilienceof the company’s
strategy, taking into
consideration different
climate-related
scenarios, including
a 2°C or lower scenario.

c) D escribe how
processes for
identifying, assessing,and managing climaterelated risks areintegrated into thecompany’s overall risk
management.

c) D escribe the targets
used by the company tomanage climate-relatedrisks and opportunities
and performanceagainst targets.

TCFD, 2020 Status Report: The Task Force on Climate-related Financial Disclosures, October 29, 2020.

7

The Task Force on Climate-related Financial Disclosures

Table ES3 summarizes the key takeaways andfindings from the Task Force’s review of the stateof climate-related financial disclosures. The Task
Force also reviewed the aggregate reportingof signatories to the Principles for Responsible
Investment for the years 2018–2020, as describedin Section B2. TCFD-Aligned Reporting by AssetManagers and Asset Owners.

Table ES3

Overview: State of Climate-Related
Financial Disclosures
Disclosure increased more between 2019 and 2020 than in any previous year assessed,
consistent with global momentum around climate-related reporting. However, progressis still needed, with only 50% of companies reviewed disclosing in alignment with at least
three recommended disclosures.
Companies remain more likely to disclose information on their climate-related risks andopportunities (Strategy a) than on any other recommended disclosure, with over half ofthe companies reviewed including such information in their 2020 reports.
Disclosure of the resilience of companies’ strategies under different climate-related scenarios(Strategy c), although still the least reported recommended disclosure, encouragingly increased
from 5% of companies in 2018 to 13% in 2020.
Although the Task Force recommends disclosure of governance regardless of materiality, theGovernance recommendation remains the least disclosed recommendation with the two
Governance recommended disclosures the second and third least disclosed.
Materials and buildings companies now lead on disclosure. The average level of disclosure
across the 11 recommended disclosures for fiscal year 2020 was 38% for materials and buildings
companies.
The insurance industry significantly increased its average level of disclosure by 11 percentage
points between 2019 and 2020, and now leads all groups by at least 15 percentage points
in disclosure of risk management processes (Risk Management b).
Europe remains the leading region for disclosures, with average level of reporting acrossthe 11 recommended disclosures from fiscal year 2020 now at half of European companies
assessed. European companies have increased their average disclosure by 15 percentage points
since 2019, and now disclose 16 percentage points more than the next closest region.

INSIGHTS INTO DISCLOSURE OF
CLIMATE-RELATED FINANCIAL IMPACT
As part of the concept for the creation of aclimate-related disclosure task force, the FSB
noted that investors, lenders, and insurance
underwriters could use climate-related
disclosures to “analyse the potential changes
in value of their assets and liabilities” due toclimate-related developments.5 The Task Force’s

recommendations solicit a range of decisionuseful climate-related information that can informsuch assessments. However, past reviews of thestate of TCFD-aligned reporting have found few
descriptions of the potential impacts of climatechange.6 In this context, the FSB requested
that the TCFD “undertake further analysis on
the extent to which organizations describe
the financial impact of climate-related risks andopportunities on their businesses and strategies.”75

FSB, ”Proposal for a disclosure task force on climate-related risks,” 2015.

6

 he 2020 status report noted that “disclosure of TCFD-aligned information increased by six percentage points, on average, between 2017 and 2019.
T
However, companies’ disclosure of the potential financial impact of climate change on their businesses and strategies remains low” (p. 4). Also see
2018 Status Report, p. 13; 2019 Status Report, pp. iv and 51; and 2020 Status Report, pp. 4, 8, and 12.

7

FSB, “FSB welcomes TCFD status report,” October 29, 2020.

8

The Task Force on Climate-related Financial Disclosures

The Task Force used a range of sources to better
understand reporting on financial impact,
including interviews with users and preparersof climate-related financial disclosure, manual
reviews of public reports, the results of the
Task Force’s public consultation on its proposedguidance on disclosure of climate-related metrics,

targets, and transition plans, and solicitation of
input from rating agencies to provide insights
on how the financial implications of climaterelated risks and opportunities factor into theirrating processes.8 Key findings of the analysis are
summarized in Table ES4.

Table ES4

Key Findings
Preparer Perspective
At least one in five preparers that responded to the Task Force’s consultation disclose
financial impact, with disclosure of impact on financial performance more common than
impact on financial position.
Preparers interviewed reported disclosing potential financial impacts more often
than actual impacts.

The process of estimating financial impacts can lead to improved internaland external communication.
Lessons learned from interviews with preparers offer a path forward for organizations earlier
on in their journey:• Enhanced data-gathering strategies are critical to enable effective assessment of financial impact.
• Allocating sufficient resources to assessing financial impact helps timely developmentof decision-useful information.
• Overcoming institutional siloes enables more effective collaboration and alignment
on assumptions and methodologies used for estimating financial impact.
• Once financial impact has been estimated, approval from relevant internal stakeholders,
including legal teams, is generally required when making public disclosures.

User Perspective
Over nine out of ten consultation respondents identified as users find disclosureof financial impacts useful.

Rating agencies stated that climate-related information is an increasingly important input
into their financial impact assessments, informing the rating process.
Users have highlighted several areas that would improve the usefulness of information
disclosed on financial impact to support decision-making, including:• amount of expenditure or capital investment currently deployed toward climate-related risks
and opportunities;• amount of expenditure or capital investment to be deployed to meet targets for addressing
climate risks and opportunities, often disclosed in transition plans; and• interconnected reporting linking qualitative disclosures with their actual and potential
financial impact.
8

 hroughout this report, the term “preparer” refers to any organization that discloses climate-related financial information. The term “user”
Trefers primarily to investors, lenders, or insurance underwriters, though other market participants such as credit rating agencies and regulatory
authorities are also important users of such information. Many users are also preparers of their own disclosures.

9The Task Force on Climate-related Financial Disclosures

FURTHER WORK TO ADDRESSIMPLEMENTATION ISSUES
Each year, the Task Force undertakes work
to assist companies with implementing its
recommendations. Two of the most challenging
areas of implementation, according to TCFD
survey respondents, relate to the Task Force’s
recommendations on strategy and metrics andtargets.9 Historically, companies expressed aneed for assistance with climate-related scenario
analysis, and in response the Task Force provided
guidance and tools to support organizations inthis area in 2020. Over the last year, companies,
investors, data and methodology providers, andothers have continued to progress the disclosureof their strategies, taking climate-related
scenarios into account.
To help address challenges related to disclosureof financial impacts, metrics, and targets, and toincorporate new guidance on transition plans,
the Task Force released two supplemental
documents simultaneously with this report.
First, the Task Force updated its Implementing
the Recommendations of the Task Force on Climaterelated Financial Disclosures (2021 annex), which
was originally released in 2017. The revised
2021 annex updates the implementing guidance
for all sectors and supplemental guidance forthe financial sector for certain recommended
disclosures within the Strategy and Metrics andTargets recommendations. The Task Force also
developed guidance to assist companies withdisclosure of climate-related metrics, targets,and transition plans. In addition, the Task Forcerequested that external organizations conduct
further work in two areas: portfolio alignment
metrics for the financial sector and businessrelevant climate-related reference scenarios(Figure ES3).10
Significant public consultation informed the two
new TCFD documents. In October 2020, the Task
Force held a consultation on Forward-Looking
Financial Sector Metrics to gather feedback on
potential climate-related metrics for financialorganizations. Over 240 respondents provided
their input on the usefulness and challengesof forward-looking metrics to inform the Task
Force’s work.
Following the 2020 consultation, in June 2021, theTask Force proposed guidance on disclosure of

9

Figure ES3
External Work on Scenarios
and Portfolio Alignment
The Portfolio Alignment Team (PAT), an independentgroup of expert analysts from the financial
sector, was asked to develop a report on portfolioalignment to help clarify methodologies andassumptions. An initial version of the PAT’s report
was released for public consultation in June 2021,
and the final report was released in October 2021.
The World Business Council on Sustainable
Development (WBCSD) has convened a group of
preparers to develop climate reference scenario
approaches for companies from the energy
system. The approaches will draw on existing
public scenarios.

climate-related metrics, targets, and transition
plans to help clarify the link between metrics andfinancial impacts, describe principles for setting
targets, provide guidance for organizations
disclosing transition plans, and propose potentialchanges to the 2021 annex. A summary of theover 240 consultation responses received,
the updated 2021 annex, and the updated
guidance on climate-related metrics, targets, andtransition plans were released in October 2021.

NEXT STEPSOver the next several months, the Task Forcewill continue to promote and monitor adoptionof its recommendations, along with any further
work necessary to support preparers’ efforts
to implement TCFD recommendations, andwill prepare a status report for the Financial
Stability Board in September 2022. The TCFD
Secretariat is also supporting the efforts of the
IFRS to develop a global baseline sustainability
reporting standard, based on the TCFD
recommendations, and will continue to provide
technical advice to jurisdictional efforts. The
Task Force continues to believe the success of its
recommendations in informing capital allocation
decision-making depends on continued,
widespread implementation by companies in
the non-financial and financial sectors and views
its guidance as a means of helping improve
the quality and consistency of climate-related
financial disclosures.

See TCFD, 2020 TCFD Status Report, 2020, p. 31.

10

 he PAT consisted of technical representatives of seven major investment firms and other organizations. The PAT report provided importantT
technical context for the TCFD consultation.

10

Contents
Letter from Michael R. Bloomberg

1

Executive Summary2

A. Initiatives Supporting TCFD

12

1. Government and Regulatory Efforts

15

2. International Standard Setting

21

3. Stock Exchange Developments

23

4. Investor and Industry-Led Initiatives

24

B. State of Climate-Related Financial Disclosures26

1. TCFD-Aligned Reporting by Public Companies

28

2. TCFD-Aligned Reporting by Asset Managers and Asset Owners

50

C. Disclosure of Financial Impact

55

1. Approach58

2. Overview of Financial Impact

60

3. Key Themes of the Task Force’s Review

62

4. Preparer Perspectives: Challenges and Lessons Learned

64

5. User Perspectives: The Usefulness of Financial Impact Disclosure

69

Appendix 1: Task Force Members

76

Appendix 2: AI Review Methodology

78

Appendix 3: AI Review Results by Industry

83

Appendix 4: PRI Indicators Mapped to TCFD Recommended Disclosures

92

Appendix 5: Rating Agency Incorporations of Climate-Related Information

93

Appendix 6: Glossary and Abbreviations

101

Appendix 7: References

104

11

A.
Initiatives
Supporting
TCFD

The Task Force on Climate-related Financial Disclosures

A. Initiatives Supporting TCFD
In 2017, the industry-led Task Force on
Climate-related Financial Disclosures released
recommendations for more effective, voluntary
disclosure of climate-related risks andopportunities. Global support for the TCFD
in the private sector, including consistently
increasing investor demand for TCFD-aligned
reporting, has driven steady progress on thedisclosure of climate-related information
since 2017.

policy and guidance and move toward requiring
TCFD or TCFD-aligned disclosures throughlegislation and regulation. A summary of selected
recent public sector announcements is shown in
Figure A1. The Task Force believes the increased
focus on its recommendations by governments
and regulators around the world has accelerated
TCFD-aligned disclosure at international,
national, and regional levels.
This section provides an overview of public- andprivate-sector developments supporting the
TCFD framework since the Task Force issued its
previous status report in October 2020.

Over the past few years, the Task Force has seen
significant momentum by governments andregulators to embed its recommendations intoA.
Initiatives
Supporting TCFD

Figure A1

Geographic Distribution of TCFD Supporters

B.
State of Climate-Related
Financial Disclosures

93

Top Five Countries
by Number of Supporters
8
5

C.
Disclosureof Financial Impact

4
72

Appendices

1

Japan

527

United Kingdom

384

United States

345

Australia

125

France117

6

Legend:450+

449–350 349–250 249–150

149–100

99–50

49-25

<25

Number of Supporters

Developments in Various Jurisdictions
1

Australia
April 2021: The Australian
Prudential Regulatory Authority
published TCFD-aligned
draft guidance on managing
climate risks

4

Hong Kong
July 2021: The Hong Kong
Monetary Authority issued
draft guidance indicating
authorized institutions shouldmake TCFD-aligned disclosures

7

Singapore
August 2021: The Singapore
Exchange Regulation proposeda road map for mandatory
TCFD-aligned disclosure

2

BrazilSeptember 2021: The Central
Bank of Brazil issued TCFDaligned disclosure rules forregulated institutions

5

Japan
June 2021: The Tokyo Stock
Exchange issued a revised
Corporate Governance Code,indicating certain companies
should enhance disclosure basedon TCFD recommendations

8

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

3

European Union
April 2021: The European
Commission issued a proposalthat included the developmentof sustainability reporting
standards based on existing
frameworks, including the TCFD

6

New ZealandApril 2021: New Zealandintroduced a bill that would
require mandatory TCFDaligned disclosure for thefinancial sector

9

United Kingdom
2020–2021: Several UK
regulators issued rules andproposals for TCFD-aligned
disclosure

13

The Task Force on Climate-related Financial Disclosures

SUPPORT FOR TCFD RECOMMENDATIONSCONTINUES TO GROW
Support for the TCFD recommendations has
accelerated over the past year.11 Since October
2020, over 1,000 additional organizations havebecome TCFD supporters, bringing the supporter
count to over 2,600 globally.12 TCFD supporters
now represent 89 countries and jurisdictions.

Organizations supporting the TCFD spannearly all sectors of the global economy witha combined market capitalization of over
$25 trillion — a 99% increase since last year.
This includes 1,069 financial institutions,
responsible for assets of $194 trillion,
as shown in Figure A2.

Figure A2

Continued Growth in Support for the TCFD
Number of TCFD Supporters

TCFD Supporter Market Coverage
USD trillions

2,616

A.
Initiatives
Supporting TCFD

1,069

+410%

B.
State of Climate-Related
Financial Disclosures

$8 tn

$9 tn

2018

2019

2020

$194 tn

700$150 tn

785
513

Appendices

2018

1,547

374

$100 tn$118 tn

812

287
226

2021

Company Combined Market Capitalization

1,512

C.
Disclosureof Financial Impact$25 tn$13 tn411
2019

Financial Institutions

2020

2021

Other Supporters

2018

2019

2020

2021

Financial Company Assets

11Importantly, not all organizations that support the TCFD recommendations implement them. Some organizations express support by convening
their members and facilitating consistency in implementation, while others — such as governments and regulators — express support byencouraging or requiring companies and other organizations to implement the recommendations.

12F igures based on TCFD supporter data since October 2020, with data correct as of October 6, 2021.

14

The Task Force on Climate-related Financial Disclosures

Reflecting the momentum behind the
TCFD, online visits to the Climate DisclosureStandards Board’s (CDSB’s) TCFD Knowledge
Hub have increased by nearly 400% since the

Hub was launched in 2018 (Figure A3). The
Knowledge Hub provides online resources
useful to organizations in understanding andimplementing the TCFD recommendations.

Figure A3

TCFD Knowledge Hub
The TCFD Knowledge Hub has received nearly 200,000 unique visitors over the last year. Visits originatedin over 180 countries and jurisdictions, although nearly 40% of all visits were from the United Kingdom andthe United States. Additionally, TCFD Knowledge Hub online course completions reached nearly 10,000
completions in only two years since the course was released in 2019.

Annual Visitors to the TCFD Knowledge Hub

191,006

A.
Initiatives
Supporting TCFD

397%

B.
State of Climate-Related
Financial Disclosures

79,93938,457C.
Disclosureof Financial Impact
AppendicesYear 1
2018–2019Year 2
2019–2020

Year 32020–2021

Country/Jurisdiction

Users% Users

United Kingdom

62,69920.36%

United States

58,03318.84%

Canada16,356

5.31%

Australia

13,937

4.52%

Germany

11,847

3.85%

Ireland

11,164

3.62%

Japan

10,393

3.37%

India

10,161

3.30%

France

8,290

2.69%

Hong Kong

8,078

2.62%

CDSB, TCFD Knowledge Hub

1. G OVERNMENT AND REGULATORYEFFORTSOver the past year, a range of public sector
entities in various jurisdictions have announced
intentions to require climate-related reporting
through policy, guidance, legislation, or
regulation. This section summarizes government
announcements and regulatory developmentsthat are driving disclosure of information in linewith the Task Force’s recommendations.

13

Brazil: In April 2021, the Central Bank of Brazil(BCB) issued a public consultation on rules forthe disclosure of social, environmental, andclimate-related risk management by institutionsof the National Financial System (SFN). The BCB
indicated the proposed rules were “inspired”
by the TCFD recommendations and would be
implemented in two phases. In September
2021, the BCB issued final disclosure rules forregulated institutions addressing aspects ofgovernance, strategy, and risk management(first phase). The second phase will include
quantitative aspects, such as metrics and targets,to be disclosed in a defined and consistentmanner to better allow for comparability.

 he main types of financial institutions included in the SFN are banks, credit unions, investment promotion agencies, finance and investment
Tcompanies, and leasing companies. See BankTrack, An Introduction to the Brazilian Banking Sector and its Sustainability Practices, pp. 6–8.

15

The Task Force on Climate-related Financial Disclosures

European Union: In April 2021, the European
Commission (EC) issued a proposed Corporate
Sustainability Reporting Directive that would
amend existing reporting requirements toinclude a broader range of companies andrequire sustainability reporting according tostandards to be developed by the European
Financial Reporting Advisory Group.14 The EC
noted that the reporting standards should take
into account existing standards and frameworks,
including the TCFD framework.

A.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures
C.
Disclosureof Financial Impact
Appendices“The Commission supports initiatives by
the G20, the G7, the Financial Stability Boardand others to develop a baseline of global
sustainability reporting standards that would
build on the work of the Task Forceon Climate-related Financial Disclosures.”– European Commission, April 21, 2021

Hong Kong: In December 2020, Hong Kong’s
Green and Sustainable Finance Cross-Agency
Steering Group (Steering Group), established andco-chaired by the Hong Kong Monetary Authority
and Securities and Futures Commission (SFC),
announced that TCFD-aligned disclosures “willbe mandatory” across relevant sectors by 2025.
The regulators announced that they will “increase
the coverage of mandatory disclosure as soon aspracticable.”16
In July 2021, the Hong Kong Monetary Authority
issued draft guidance indicating authorized
institutions (i.e., banks, restricted license banks,and deposit-taking companies) should makeclimate-related disclosures aligned with the
TCFD recommendations.
New Zealand: In September 2020, New
Zealand’s Minister for Climate Changeannounced government plans to make climaterelated financial disclosures mandatory forcertain publicly listed companies and large
insurers, banks, and investment managers
and that reporting would be against a
standard developed in line with the TCFD
recommendations. In April 2021, the Financial
Sector (Climate-related Disclosure and Other
Matters) Amendment Bill (bill) was introduced
to Parliament. One of the bill’s main elements

is requiring large listed issuers, large registeredbanks and other deposit takers, large licensed
issuers, and large managers of managed
investment schemes to make climate-related
disclosures. If passed, the legislation would
enter into force within 12 months after receiving
Royal assent.

“Reporting will be based on the Task Forceon Climate-related Financial Disclosures(TCFD) framework, which is widely
acknowledged as international best practice.”– Hon. Dr. David Clark and Hon. James Shaw,
New Zealand Parliament, April 13, 2021

Switzerland: In December 2020, Switzerland’s
Federal Council indicated the authorities should“prepare the binding implementation of therecommendations of the Task Force on Climaterelated Financial Disclosures (TCFD) by Swisscompanies in all sectors of the economy.” TheFederal Council also advised Swiss companies toapply the TCFD recommendations immediately.
In January 2021, Switzerland became an official
supporter of the TCFD.
In August 2021, the Federal Council instructed
the Federal Department of Finance and otherfederal units to prepare a consultation on
mandatory climate reporting by large Swisscompanies by summer 2022. The Federal Council
noted several parameters of such a consultation,
including the binding implementation of the
TCFD recommendations.
• Swiss Financial Market Supervisory
Authority (FINMA): In June 2021, FINMA
amended its “Disclosure – banks” and“Disclosure – insurers” circulars to include
the disclosure of climate-related financial
risks. FINMA noted that it based its disclosurerules on the recommendations of the TCFD
and that the amended circulars would enter
into force on July 1, 2021, for large banks andinsurance companies.
United Kingdom (UK): In November 2020, theUK’s Chancellor of the Exchequer announced
the UK’s intention to mandate climate disclosuresby large companies and financial institutions
by 2025, “[g]oing further than recommended

14

 n June 25, 2020, the European Commission issued a request for technical advice mandating EFRAG to undertake preparatory work on possible
O
EU non-financial reporting standards under a revised NFRD. In March 2021, EFRAG published two documents guiding the development of acomprehensive set of EU sustainability reporting standards, including integration of the TCFD recommendations.

15In December 2019, Hong Kong Exchanges and Clearing Limited published Updated Environmental, Social and Governance Reporting Guide and Related
Listing Rules, requiring listed companies to disclose ESG information, effective on July 1, 2020.

16

 ee “Cross-Agency Steering Group Launches its Strategic Plan to Strengthen Hong Kong’s Financial Ecosystem to Support a Greener and MoreS
Sustainable Future.”

16

The Task Force on Climate-related Financial Disclosuresby the Taskforce on Climate-related Financial
Disclosures.” As part of the Chancellor’s
announcement, HM Treasury released an
Interim Report from the UK’s Joint GovernmentRegulator TCFD Task Force and a Roadmap
towards mandatory climate-related disclosures.
The Roadmap set out an indicative pathway
for making TCFD disclosures mandatory, assummarized in Figure A4.
• UK Financial Conduct Authority (FCA): In
December 2020, the FCA introduced newrules for companies with a UK premium
listing to disclose climate-related risks

and opportunities in line with the TCFD
recommendations on a comply or explain
basis. In June 2021, the FCA published further
proposals to extend TCFD-aligned disclosure
requirements to issuers of standard
listed equity shares and introduce TCFDaligned disclosure requirements for asset
managers, life insurers, and FCA-regulated
pension providers. The latter proposed
regulation would be introduced via a “phased
implementation approach” and cover 98%
of assets under management in both the UK
asset management market and held by UK
asset owners.

Figure A4
A.
Initiatives
Supporting TCFD

UK Roadmap Towards Mandatory Climate-Related
Disclosures

B.
State of Climate-Related
Financial Disclosures
C.
Disclosureof Financial Impact
Appendices

HM Treasury, A roadmap towards mandatory climate-related disclosures, November 2020, p. 5

17

The Task Force on Climate-related Financial Disclosures• UK Department for Business, Energy, andIndustrial Strategy (BEIS): In March 2021,
BEIS launched a public consultation on
proposals to require mandatory TCFD-aligned
disclosures from publicly quoted companies,
large private companies, and Limited Liability
Partnerships (LLPs).

A.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures
C.
Disclosureof Financial Impact
Appendices• UK Department for Works and Pensions(DWP): In June 2021, DWP proposed
legislation to Parliament that would require
UK occupational pension scheme trustees toassess and publicly disclose climate-relatedrisks in line with the TCFD recommendations.
The regulations would affect trustees ofschemes with at least £5 billion ($7.1 billion)
in assets from October 1, 2021, and be
extended to a £1 billion ($1.2 billion) thresholdfrom October 1, 2022. The proposed regulations
are subject to Parliamentary debate.

“Come 2023, the vast majority of (UK)assets will be invested with pension scheme
trustees, asset managers, and insurers
who are disclosing climate-related financial
risks and opportunities in line with therecommendations by the Task Force on
Climate-related Financial Disclosures (TCFD).”– Guy Opperman MP, July 2, 2021

Australia: In April 2021, the Australian Prudential
Regulatory Authority published a consultation
on draft guidance for banks, insurers, andsuperannuation trustees on managing thefinancial risks of climate change. The draft
Prudential Practice Guide CPG 229 Climate Change
Financial Risks (CPG 229) is aligned with the TCFD
recommendations and is expected to be finalized
before the end of 2021.
Canada: In April 2021, Canada published its 2021
Federal Budget and included multiple stipulations
related to TCFD alignment, particularly
related to its Crown Corporations.17 Canada
further pledged to “engage with provinces
and territories, with the objective of making
climate disclosures, consistent with the Task
Force on Climate-related Financial Disclosures,part of regular disclosure practices for a broad
spectrum of the Canadian economy.”18

Denmark: In October 2020, Denmark declared
its support for the TCFD, urging companies tocommit to TCFD-aligned climate disclosure asa means to building a more resilient financial
system. Following the declaration, Minister
for Industry, Business, and Financial Affairs
Simon Kollerup expressed: “I am very pleased
that so many Danish companies have already
implemented the recommendations from The
Task Force on Climate-related Disclosures (TCFD)
because it will contribute to more transparent
and consistent reporting on climate-related risks
and opportunities.”
France: In December 2020, following thefive-year anniversary of the Paris Agreement,
the 40 largest French companies listed on
the CAC40 index declared their support for
the TCFD. An official statement of support was
signed by multiple government officials anddemonstrated French commitment to building
a more climate-resilient financial system throughenhanced, TCFD-aligned disclosures.

“The official support of the big French
companies for the recommendations of
the Task Force on Climate-related Disclosuresbears witness to the fact that they consider
climate as vital for the sustainability of theirbusiness. They must continue to promote theuse of good practices and to onboard theentire supply chain towards the goal of carbon
neutrality set by the President of the Republic.”– Bruno Le Maire, French Minister of Economy,
Finance, and the Recovery, December 12, 2021

Germany: In May 2021, the German Finance
Ministry published a sustainable financestrategy. Within the publication, the federal
government states that “the recommendationsof the TCFD are an important element of uniform
global standards for sustainability reporting,”
pledging to “promote (the TCFD) at the G7 andG20 level.”
Ireland: In November 2020, Irish Finance
Minister Paschal Donahue publicly endorsed
the TCFD recommendations, stating that the
government is “actively encouraging greater17

 rown corporations are defined as wholly owned federal or provincial organizations that are structured like private or independent companies.
C
See the Canadian Encyclopedia for more details. The “Treasury Board Secretariat List of Crown corporations” includes 47 Crown corporations,accessed July 2021.

18

Government of Canada, Budget 2021: A Recovery Plan for Jobs, Growth and Resilience, April 19, 2021, p. 175.

18

The Task Force on Climate-related Financial Disclosurestake-up” among Irish firms. To support
government efforts, Sustainable Finance Ireland
has initiated a campaign modeled off the Japan
TCFD Consortium platform to accelerate Irish
firms’ commitment to the TCFD framework.
Italy: In March 2021, the Commissione Nazionale
per la Societa’ e la Borsa (Consob), Italy’s publicauthority responsible for regulating the Italian
securities market, announced formal support
for the TCFD recommendations. As part ofthe institute’s strategy aimed at developing amore sustainable economy in line with the EUcommitments, “Consob encourages companies
to voluntarily adopt the recommendations of the
TCFD,” among other activities.

A.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures
C.
Disclosureof Financial Impact
AppendicesJapan: In May 2021, Japan’s Financial Services
Agency, Ministry of Economy, Trade, and Industry,
and Ministry of the Environment released their
final Basic Guidelines on Climate Transition Finance.
The guidelines include several references to the
TCFD framework; for example, “[i]t is possible
to disclose transition strategies and elements
concerning the governance guaranteeing that theexecution of transition strategies is in alignment
with the reporting frameworks such as the
Recommendations of the Task Force on ClimateRelated Financial Disclosures.”
Malaysia: In February 2021, Malaysia’s
Joint Committee on Climate Changeannounced its intention to support “thevoluntary implementation of climate-related
disclosures that are aligned with the TCFD
Recommendations” and proposed various work
streams focused on industry take-up, resource
development, stakeholder engagement, andbuilding technical capacity.
Norway: In May 2021, the Norwegian Finance
Ministry announced Norway’s official support
for the TCFD. In a joint press release with theNordic CEOs for a Sustainable Future and theOslo Stock Exchange, Jan Tore Sanner, Norway’s
Minister of Finance, reflected that “in 2019,
the Norwegian Government endorsed the
TCFD recommendations and communicatedan expectation that large companies disclose
climate-related information in line with the TCFD
framework. Today, we reiterate our endorsement
by becoming an official supporter of the TCFD.”
Russia: In July 2021, the Bank of Russia publishedrecommendations for public joint-stockcompanies to disclose ESG-related information,
recognizing that “an assessment of ESG risks
is necessary, since over time they can betransformed with a high degree of probability
into financial risks.” The recommendations weredeveloped based on both the TCFD frameworkand GRI standards.
Singapore: In December 2020, the Monetary
Authority of Singapore (MAS) issued final
Guidelines on Environmental Risk Management
for Banks, Guidelines on Environmental Risk
Management for Asset Managers, and Guidelines
on Environmental Risk Management for Insurers.
The guidelines outline that financial institutions’disclosure should be in accordance with wellregarded international reporting frameworks,
such as recommendations by TCFD. In June 2021,
MAS released its inaugural sustainability reportand announced that all banks, insurers, and asset
managers in the city-state are expected to makeTCFD-aligned climate disclosures from June 2022.
• Green Finance Industry Taskforce(GFIT): In May 2021, Singapore’s GFIT,
convened by the MAS, published Financial
Institutions Climate-related Disclosure
Document (FCDD), an implementation guidefor climate-related disclosures for financial
institutions. The document adopts the TCFD’s
recommendations as “the guiding frameworkfor disclosure.”
South Korea: In May 2021, South Korea’s
Financial Services Commission (FSC), along with
13 other relevant institutions, declared official
support for the TCFD. Vice Chairman of the FSC
Doh Kyu-sang stated that “[f]ollowing the TCFD
recommendations, we hope that corporate
disclosures of climate-related financial data will
help transform our society into a sustainable andlow carbon economy and help us build a morestable financial system.”“Following the TCFD recommendations, wehope that corporate disclosures of climaterelated financial data will help transform oursociety into a sustainable and low carbon
economy and help us build a more stablefinancial system. To this end, we declare our
support for the TCFD and its recommendations
and pledge that each institution will work totake the following measures.”– Korean Financial Services Commission,
May 24, 2021

19

The Task Force on Climate-related Financial Disclosures

United States of America: Several federal andstate initiatives are underway in support of the
TCFD in the United States, as outlined here.
• U.S. Commodity Futures Trading
Commission (CFTC): In September 2020,
the CFTC’s Climate-Related Market Risk
Subcommittee released a report titledManaging Climate Risk in the U.S. Financial
System, issuing 53 recommendations to
mitigate the risks to financial markets. The
report urges regulators to “build from existing
standards that provide industry-specificclimate disclosure recommendations, forexample, those developed by the TCFD,”
among other frameworks, and to “consider the
TCFD recommendations” for governance andrisk management disclosure rulemaking.
A.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures
C.
Disclosureof Financial Impact
Appendices• U.S. Securities Exchange Commission (SEC):In March 2021, the SEC launched a public
consultation regarding potential regulationof climate risk disclosure, highlighting the
TCFD as an international reporting framework
for regulatory consideration. In April 2021,
during a speech to the International Instituteof Finance, U.S. Treasury Secretary Yellencommitted to working with the SEC to promoteconsistent climate-related financial disclosuresand noted that the TCFD framework provides
a strong foundation for climate risk reporting.
In July 2021, the results of the SEC’s public
consultation revealed strong support for
mandatory climate-related disclosure andthe TCFD framework as the recommended
basis for such disclosure.

• New York State Department of Financial
Services (NYDFS): In September 2020,
the Superintendent of Financial Services
announced several actions by New York State
Department of Financial Services to bolster
commitment to addressing financial risks
from climate change. DFS expects New Yorkinsurers to start developing their approach
to climate-related financial disclosure andconsider engaging with TCFD and otherinitiatives when doing so. The department
will begin an examination process in 2021
to develop this strategy.
• State of California: In April 2021, California
State Senator Stern (later joined by Senator
Wiener) introduced legislation, bill SB 449,
that would require California-based business
entities with over $500 million in annual
revenue to annually disclose their climaterelated financial risks in accordance with the
TCFD recommendations. Since then, E2, acoalition of 2,600 California business leaders,and a coalition of institutional investors
with more than $88 billion in assets undermanagement have sent letters in support of SB
449 to the California State Legislature.

20

The Task Force on Climate-related Financial Disclosures

2. INTERNATIONAL STANDARD SETTING
Several international standard setters working
to develop sustainability standards havestated intentions to draw from the TCFD
recommendations to promote harmonization
across global climate-related reporting practices.

A.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures
C.
Disclosureof Financial Impact“The alliance”: In December 2020, a groupof five leading sustainability reportingorganizations, comprising the Carbon Disclosure
Project (CDP), Climate Disclosure Standards
Board (CDSB), Global Reporting Initiative (GRI),
Sustainability Accounting Standards Board(SASB), and International Integrated Reporting
Council (IIRC), published a prototype for a global
comprehensive reporting system for climaterelated financial disclosure.19 The prototype
outlines a shared vision that integrates bothfinancial accounting and sustainability disclosureand builds on the TCFD recommendations. The
use of the TCFD recommendations as a starting

foundation is supported by the IFRS Foundation,
FSB, and IOSCO, as outlined in Figure A5.
The International Financial ReportingStandards (IFRS) Foundation: In early February
2021, the Trustees of the IFRS Foundation
announced their intention to establish aninternational sustainability standards board
within the existing governance structure of
the IFRS Foundation, serving to clarify
sustainability-related financial standards.
In March 2021, the Trustees published theirstrategic direction and declared that the
proposed board will “build upon the wellestablished work” of the TCFD and “the alliance”
reporting prototype.
Later in March 2021, the Trustees announced
a new technical readiness working groupto provide recommendations for prototype
standards, built on the TCFD recommendations,for its proposed international sustainability

Figure A5

Excerpts of International Organizations’ Support
for Convergence Around the TCFD

Appendices

The Trustees’ proposed sustainability standards board “would build upon
the well-established work of the Financial Stability Board’s Task Forceon Climate-related Financial Disclosures (TCFD).”“The FSB strongly encourages national or regional authorities thatare developing requirements or guidance for climate-related disclosures
to consider using the TCFD recommendations as the basis.”“We have used the four pillars of the TCFD as the basis for the wider setof sustainability-related financial risks and opportunities and to be
the foundation of a Prototype Sustainability-related Financial Disclosure
Presentation Standard.”“IOSCO welcomes a prototype for an approach to climate-related disclosuresthat builds on the recommendations of the Task Force of Climate-related
Financial Disclosures (TCFD).”IFRS Foundation, ”Trustees announce strategic direction based on feedback to sustainability reporting consultation”; FSB, “FSB encourages the
IFRS foundation and authorities to use TCFD’s recommendations as the basis for climate-related financial risk disclosures”; IMP, Reporting on
enterprise value climate prototype, p. 17; IOSCO, “IOSCO sees an urgent need for globally consistent, comparable, and reliable sustainability
disclosure standards,” p. 1

19In June 2021, the Sustainability Accounting Standards Board (SASB) and International Integrated Reporting Council (IIRC) merged to form
the Value Reporting Foundation.

21

The Task Force on Climate-related Financial Disclosures

standards board. The working group ischaired by the IFRS Foundation, overseenby the International Organization for
Securities Commissions (IOSCO), and includes
participation by the International AccountingStandards Board (IASB), the TCFD, “the alliance”
members, and the World Economic Forum’s
International Business Council (WEF-IBC).
In April 2021, the IFRS published institutionalarrangements for the proposed International
Sustainability Standards Board (ISSB).

A.
Initiatives
Supporting TCFD

Financial Stability Board: In December
2020, the FSB welcomed the IFRS Foundation’s
approach to focus on standards for climaterelated financial disclosures. It further
encouraged the IFRS Foundation to build on
the work of its Task Force on Climate-related
Financial Disclosures and to use the TCFD’s
recommendations as the basis for climaterelated financial disclosures.

B.
State of Climate-Related
Financial Disclosures

In July 2021, the FSB published a Roadmap for
Addressing Climate-Related Financial Risks, layingout a comprehensive plan to address climaterelated financial risks and promote international

C.
Disclosureof Financial Impact

Figure A6

Appendicescoordination on climate-related policy. The
Roadmap highlights the TCFD framework as afoundational baseline standard for promoting
globally consistent, comparable, and decisionuseful climate-related disclosures. Within the
document, the FSB and “other bodies” commit topromoting consistency in national and regional
climate disclosure policy using frameworks built
on the TCFD recommendations. In addition, theFSB released a report on promoting climaterelated disclosures (Figure A6).

“FSB and other bodies will promoteconsistent approaches among nationaland regional climate disclosure initiatives,using frameworks based on the TCFD
Recommendations for climate-related
financial disclosures, in line with domestic
legal and regulatory frameworks, as work on
the issuance of ISSB standards progresses.”– Financial Stability Board, July 2021

FSB Report on Jurisdictions’ Implementationof Climate-Related Disclosure Frameworks
In July 2021, the FSB published a Report on Promoting Climate-Related Disclosures, a document outlining high-levelguidance to support financial authorities in their development of climate-related disclosure frameworks. Aiming
to promote greater consistency in approaches and accelerate progress, the FSB report encourages authorities touse a framework based on the TCFD recommendations across all sectors (non-financial corporates and financial
institutions) for climate-related disclosures. It examines current and planned climate-related disclosure practices
across all 25 FSB member jurisdictions and provides case studies with examples of jurisdictions’ approaches toimplementing climate-related disclosure frameworks. The case studies examine strategies, mechanisms, andtools used by financial authorities to implement both mandatory and voluntary disclosure regimes in the United
Kingdom, European Union, Japan, Hong Kong, and Brazil.

International Organization for Securities
Commissions (IOSCO): In late February 2021,
IOSCO publicly endorsed the IFRS Foundation’s
proposed international sustainability standards
board and welcomed “the alliance” prototype“as a potential basis for the ISSB to develop
climate-related reporting standards.” The
statement explicitly approved of the use of the
TCFD recommendations within the prototype.

20

In June 2021, IOSCO released a Report on
Sustainability-related Issuer Disclosures,
outlining the work of its Sustainable FinanceTaskforce (STF) on improving corporate issuers’
sustainability-related disclosures. Among othertopics, the STF engaged with asset managers
and corporate reports to determine how
effectively TCFD-aligned disclosure standards
would meet investors’ needs. 20 The reportIn support of its Report on Sustainability-related Issuer Disclosures, IOSCO’s Sustainable Finance Taskforce engaged with a sample of approximately
60 asset managers across 19 jurisdictions to determine how asset managers use sustainability-related information provided by corporate issuers.
See p. 13 for more details.

22

The Task Force on Climate-related Financial Disclosures

supported the TCFD framework and climaterelated disclosure standards based on the TCFD
recommendations, including the IFRS ISSB.21
Finance Ministers and Central Bank
Governors of the G7: In June 2021, the Finance
Ministers and Central Bank Governors of theG7 released a communiqué announcing theirsupport of “moving toward mandatory climaterelated financial disclosures that provide
consistent and decision-useful information
for market participants and that are based on
the recommendations of the TCFD, in line withdomestic regulatory frameworks.”A.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures
C.
Disclosureof Financial Impact
AppendicesFinance Ministers and Central Bank
Governors of the G20: In July 2021, the Finance
Ministers and Central Bank Governors of theG20 released a communiqué committing to“work to promote implementation of disclosure
requirements or guidance, building on the
FSB’s Task Force on Climate-related Financial
Disclosures (TCFD) framework, in line withdomestic regulatory frameworks, to pave theway for future global coordination efforts.” The
statement further welcomed the TCFD-aligned
IFRS ISSB work program and FSB Roadmap.

3. STOCK EXCHANGE DEVELOPMENTS
The TCFD recommendations have seen traction
among stock exchanges globally, with someentities incorporating TCFD-aligned disclosure
into their listing requirements or guidance.
Singapore Stock Exchange (SGX): In August
2021, the Singapore Exchange Regulation
proposed a road map for mandatory TCFDaligned disclosure. Starting in 2022, all issuers
would be required to adopt TCFD-aligned
reporting on a comply or explain basis.
Disclosure would become mandatory in 2023 forcompanies in key industries including financeand transportation, and in most industries in
2024. Public consultation on the proposed roadmap ended on September 27, 2021.

Tokyo Stock Exchange (TSE): In June 2021,
TSE published a revised Corporate Governance
Code (the Code) based on the proposals madeby Japan’s Council of Experts Concerning the
Follow-up of Japan’s Stewardship Code andJapan’s Corporate Governance Code. Under
revised Securities Listing Regulations, the Coderequires certain listed companies to enhance thequality and quantity of climate-related financial
disclosures based on the TCFD recommendations,with effect from June 11, 2021.22
United Nations Sustainable Stock Exchanges(SSE) Initiative: In July 2020, the SSE Initiative
created a Climate Disclosure Advisory
Group and launched a new workstream todevelop guidance to assist stock exchanges indeveloping TCFD-aligned reporting guidance
for issuers. The project was conducted under
the direction of the UN Special Envoy for
Climate Action and Finance, Mark Carney, incollaboration with Advisory Group Co-Chairs,
London Stock Exchange Group (LSEG), andJohannesburg Stock Exchange. In June 2021,
the SSE Initiative published its final Model
Guidance on Climate Disclosure: A templatefor stock exchanges to guide issuers on TCFD
implementation, citing the TCFD as “current bestpractice for climate-related disclosure.”
London Stock Exchange (LSEG): In February
2021, LSEG pledged to embed the TCFD
recommendations within its new Environmental,
Social and Governance guide, mandating that
all listed companies commit to TCFD-aligned
financial reporting. The LSEG has officially
supported the TCFD and encouraged issuers toreport against the recommendations since 2017.
Oslo Stock Exchange (Oslo Børs): In May 2021,
Oslo Børs declared official support for the TCFD
recommendations. Øivind Amundsen, CEO of
Oslo Børs and member of the Managing Board
at Euronext, stated that Oslo Børs “encourages
our listed companies to implement therecommendations of the TCFD. Transparent
and consistent climate-related disclosure is
critical in order to effectively mobilize private
capital towards a greener and more climateresilient economy.”

21

IOSCO reports that “most of the asset managers conveyed that the TCFD’s recommendations are the framework they would like to see
universally applied for climate-related disclosures. In several cases, asset managers have called for mandatory reporting based on the TCFD
Recommendations.” See p. 13 of the Report on Sustainability-related Issuer Disclosures for more details supporting asset managers’ endorsement of
mandatory TCFD-aligned disclosure.

22

 he “Prime Market” will be a newly introduced market for companies that have higher standards of governance and are committed to sustainableT
growth and medium-to-long-term enhancement of corporate value, with a focus on constructive dialogue with investors. Prime Market–listedcompanies are estimated to account for over 90% of Japan’s listed companies on a market capitalization basis.

23

The Task Force on Climate-related Financial Disclosures

4. I NVESTOR AND INDUSTRY-LED
INITIATIVES
Numerous industry-led initiatives have driven
support for and implementation of the TCFD
recommendations over the past year, several ofwhich are summarized below.
Climate Action 100+: The CA100+ Net-Zero
Company Benchmark assesses the performanceof the world’s largest corporate greenhousegas emitters against 11 sustainabilityrelated indicators, including measuring
TCFD alignment.23 Despite a rise in net-zerocommitments, the inaugural 2020 CA100+
Net-Zero Company Benchmark revealed limited
progress on climate transition.

A.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures
C.
Disclosureof Financial Impact
AppendicesGroup of Thirty: In October 2020, the Groupof Thirty, a group of economic, financial, andacademic leaders, released a report calling forbusinesses, governments, and the financial
community to mandate climate risk disclosure inline with the TCFD recommendations by 2030.
Institute of International Finance (IIF) andUnited Nations Environment Programme
Finance Initiative (UNEP FI): In September
2020, the IIF and UNEP FI, together with EY,
jointly published a TCFD Report Playbook to serve
as a resource for organizations throughout
the various stages of developing TCFD-aligned
climate disclosure.
Investment Association (IA): In May 2021, theIA, a coalition of UK-based investment managers
with over £7.7 trillion AUM, published an open
letter outlining key measures they believe G7
nations should adopt, including a commitment
to “implementing mandatory economy-widereporting on international Task Force on Climaterelated Financial Disclosures (TCFD) reporting
agreed by national regulators.”
Maple 8: In November 2020, the CEOs of
Canada’s eight largest pension plan investment
managers, informally known as “Maple 8,”
issued a joint public statement calling for
SASB- and TCFD-aligned disclosure from all
listed companies. Specifically, Maple 8 cited an“obligation to disclose material climate-relatedrisks and opportunities to financial markets toprovide financially relevant, comparable, anddecision-useful information” in line with the
TCFD framework.

Nordic CEOs for a Sustainable Future: In May
2021, Nordic CEOs for a Sustainable Future
declared support for the recommendations of
the TCFD. In accordance with this declaration,group members pledged to report aligned to
the TCFD recommendations starting from thereporting year of 2021 — and committed tourging other Nordic companies to follow suit.
The group further developed a guide, Climate
Risk Management, a Guide to Getting Started, tosupport other Nordic countries throughout the
TCFD implementation journey.

“A s the first regional group to mobilize behind
the TCFD, the Nordic CEOs for a Sustainable
Future are further catalyzing (TCFD)
adoption in Europe and globally. I lookforward to discussing Nordic companies’
leadership in this space and what we haveleft to accomplish.”– Mark Carney, Finance Advisor for COP26 and UN
Special Envoy for Climate Action and Finance,
May 21, 2021

The Investor Agenda: In June 2021, the seven
Founding Partners of The Investor Agenda
released the “2021 Global Investor Statement toGovernments on the Climate Crisis,” calling on all
world governments to accelerate and strengthen
climate-related policy action in support of a
net-zero transition by 2050. The statement
specifically urges governments to “commit to
implementing mandatory TCFD-aligned climate
disclosure” and was signed by 457 investors
representing $41 trillion in assets.24“We, therefore, call on all governments in 2021
to [c]ommit to implementing mandatory
climate risk disclosure requirementsaligned with the Task Force on Climaterelated Financial Disclosures (TCFD)
recommendations, ensuring comprehensive
disclosures that are consistent, comparable,
and decision-useful.”– 2021 Global Investor Statement to Governmentson the Climate Crisis, 2021

23

T his is shown through Disclosure Indicator 10.

24

 ccording to IIGCC, the 2021 Global Investor Statement to Governments on the Climate Crisis represents the largest collective assets underA
management to sign on to a global investor statement to governments on climate change since the first statement in 2009.

24

The Task Force on Climate-related Financial Disclosures

UNEP FI TCFD Banking Programme: In January
2021, Phase III of the UNEP FI TCFD banking pilotcommenced. The pilot will “more fully explore
climate stress testing, the integration of physicaland transition risk assessments, and sectorspecific risks and opportunities.” In February
2021, the programme released three papers
relating to (1) understanding the financial risksof a disorderly transition using climate scenarios,(2) climate transition scenarios for financial
professionals, and (3) mapping climate-related
financial risk assessment methodologies.
WBCSD: In May 2021, WBCSD concluded its
series of sector-specific TCFD Preparer Forums,
having worked since 2017 with companies
from six sectors — oil and gas, construction,

A.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures
C.
Disclosureof Financial Impact
Appendiceschemicals, electric utilities, automobiles, andfood, agriculture, and forest products — toexplore their TCFD implementation practices.
Implementation reports for each of the six
sectors are now published on the WBCSD
website. Each report contains examples ofgood disclosure practice across all the TCFD’s
recommendations, together with commentaryon the challenges associated with disclosure,the opportunities for developing disclosure
practice over time, and comments based on
informal interactions with small, self-selectedgroups of investors.
Several TCFD Consortiums have also been
initiated or developed over the course of the lastyear, as outlined in Figure A7.

Figure A7

Spotlight on TCFD Consortiums

Japan:
Throughout 2020–2021, the Japan TCFD Consortium
developed Guidance on Climate-related Financial
Disclosures 2.0, promoted dialogue between users
and preparers of climate-related disclosures via theGreen Investment Guidance (GIG) Supporters platform,and supported the second annual TCFD Summit.25
The Japan TCFD Consortium has achieved measurable
success, serving as a model to promote adoption of
the TCFD recommendations at the national level. 26
Accordingly, some jurisdictions have initiateddevelopment of their own TCFD Consortiums.

Ireland:
In January 2021, following the Irish Government’s
public statement of support for the TCFD, Sustainable
Finance Ireland initiated a campaign to accelerate Irish
firms’ commitments to addressing the risks of climatechange by reporting in line with the TCFD framework.27
The campaign “will be using the model of the Japan
TCFD Consortium as a template” to drive support for
the TCFD.

25

In May 2019, Japan’s Ministry for Economy, Trade, and Industry (METI), Ministry of the Environment (MOE), and Financial Services Agency ( JFSA)
arranged an industry-led Japan TCFD Consortium — a public-private partnership designed to facilitate dialogues between financial institutions,business corporations, and institutional investors around climate-related financial disclosures recommended by the TCFD.

26

 s of July 2021, the Japan TCFD Consortium comprises 350 companies and has produced three TCFD-specific implementation guides, supported twoAnational TCFD Summits, and driven national support for the TCFD recommendations. Japan has the largest number of TCFD supporters of any country.

27

Sustainable Finance Ireland is a network of public- and private-sector actors working to advance Ireland’s sustainable finance agenda.

25

B.
State of
Climate-Related
Financial
Disclosures

The Task Force on Climate-related Financial Disclosures

B. State of Climate-Related
Financial Disclosures
Since 2018, the Task Force has assessed theevolution and current state of climate-related
financial disclosures using artificial intelligence(AI) technology to review public companies’
reports. These AI reviews provide helpful insight
into the current state and practices of climaterelated reporting. For this status report, theTask Force reviewed the reports of 1,651 publiccompanies for the 2018, 2019, and 2020 fiscal
year reporting periods.28 The AI assessed whether

the reports included information that appeared
to align with one or more of the Task Force’s 11
recommended disclosures (Table B1).
The Task Force also reviewed the aggregate
reporting of signatories to the Principles for
Responsible Investment for the years 2018–2020
to assess disclosures by asset managers andowners (Section B2. TCFD-Aligned Reportingby Asset Managers and Asset Owners).

Table B1
A.
Initiatives
Supporting TCFD

TCFD Recommendations and Supporting
Recommended Disclosures

B.
State of Climate-Related
Financial Disclosures

Governance

Strategy

Risk Management

Metrics and Targets

Disclose the company’s
governance aroundclimate-related risks andopportunities.

Disclose the actual andpotential impacts ofclimate-related risks andopportunities on thecompany’s businesses,
strategy, and financial
planning where suchinformation is material.

Disclose how thecompany identifies,
assesses, and manages
climate-related risks.

Disclose the metrics andtargets used to assess
and manage relevant
climate-related risks
and opportunities wheresuch information ismaterial.

a) D escribe the board’s
oversight of climaterelated risks andopportunities.

a) D escribe the climaterelated risks andopportunities thecompany has identified
over the short,medium, and long
term.

a) D
 escribe thecompany’s processes
for identifying andassessing climaterelated risks.

a) D isclose the metrics
used by the company toassess climate-relatedrisks and opportunities
in line with its strategy
and risk management
process.

b) D escribe management’s
role in assessing andmanaging climaterelated risks andopportunities.

b) D escribe the impact ofclimate-related risks
and opportunities
on the company’sbusinesses, strategy,
and financial planning.

b) D escribe thecompany’s processes
for managing climaterelated risks.

b) D isclose Scope 1, Scope2, and, if appropriate,
Scope 3 greenhousegas (GHG) emissions,and the related risks.

c) D escribe the resilienceof the company’s
strategy, taking into
consideration different
climate-related
scenarios, including a
2°C or lower scenario.

c) D escribe how
processes for
identifying, assessing,and managing climaterelated risks areintegrated into thecompany’s overall risk
management.

c) D escribe the targets
used by the company tomanage climate-relatedrisks and opportunities
and performanceagainst targets.

C.
Disclosureof Financial Impact
Appendices28 he Task Force gratefully acknowledges the work of Richard Cantor, Burcu Guner, Ashit Talukder, Sankalp Gaur, and Diya Sawhny from Moody’s
T
Corporation on the AI technology review. Moody’s contributed to the contents of this report by developing the artificial intelligence component
and providing its results as described in Appendix 2: AI Review Methodology. Moody’s contribution has been prepared only for the TCFD. Moody’s
accepts no liability (including for negligence) to anyone else in connection with the Moody’s contents of this report.

27

The Task Force on Climate-related Financial Disclosures

1. T
 CFD-ALIGNED REPORTING
BY PUBLIC COMPANIESThis sub-section summarizes the results and key
findings from the AI review, as shown in Table B2,
as well as the scope and approach used to review

the alignment of public companies’ reporting for
fiscal years 2018, 2019, and 2020 with the Task
Force’s 11 recommended disclosures. All quoted
percentages refer to the sample population,
unless otherwise stated.

Table B2

Overview: State of Climate-Related
Financial Disclosures
Disclosure increased more between 2019 and 2020 than in any previous year assessed,
consistent with global momentum around climate-related reporting. However, progressis still needed, with only 50% of companies reviewed disclosing in alignment with at least
three recommended disclosures.

A.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures
C.
Disclosureof Financial Impact
Appendices• Growth has accelerated over the past year from growth of four percentage points between
2018 and 2019 to growth of nine percentage points between 2019 and 2020.
• In 2020 disclosures, on average companies reported in line with three of the Task Force’s
11 recommended disclosures, as compared to two of the 11 in 2018.
• Seventy-five percent of companies reviewed disclosed in line with at least one TCFD
recommended disclosure.
Companies remain more likely to disclose information on their climate-related risks andopportunities (Strategy a), than on any other recommended disclosure, with over half ofthe companies reviewed including such information in their 2020 reports.
Disclosure of the resilience of companies’ strategies under different climate-related scenarios(Strategy c), although still the least reported recommended disclosure, encouragingly increased
from 5% percent of companies in 2018 to 13% in 2020.
Although the Task Force recommends disclosure of governance regardless of materiality,
The Governance recommendation remains the least disclosed recommendation with the two
Governance recommended disclosures the second and third least disclosed.
Materials and Buildings companies now lead on disclosure. The average level of disclosure
across the 11 recommended disclosures for fiscal year 2020 was 38% for Materials
and Buildings companies.
The Insurance industry significantly increased its average level of disclosure by 11 percentage
points between 2019 and 2020, and now leads all groups by at least 15 percentage points
in disclosure of risk management processes (Risk Management b).
Europe remains the leading region for disclosures, with average level of reporting acrossthe 11 recommended disclosures from fiscal year 2020 now at half of European companies
assessed. European companies have increased their average disclosure by 15 percentage points
since 2019, and now disclose 16 percentage points more than the next closest region.

28

The Task Force on Climate-related Financial Disclosures

Scope and Approach
The Task Force reviewed financial filings, annual
reports, integrated reports, and sustainability
reports of 1,651 public companies from 69
countries across eight industries. Six of the eightindustries align with groups highlighted in the
Task Force’s 2017 report: Banking, Insurance,
Energy, Materials and Buildings, Transportation,
and Agriculture, Food, and Forest Products.29
To incorporate other types of companies that
may be exposed to climate-related risks, two
additional industries were added to the review
in 2019 and retained for this year — Technology
and Media and Consumer Goods.

A.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures
C.
Disclosureof Financial Impact
Appendices

For the 2020 status report, the Task Force
identified an initial review population of nearly
4,500 public companies across the eightindustries based on company size thresholds.
Banks and insurance companies were selected
for the initial population if their assets totaled$10 billion or more or $1 billion or more,
respectively, for the 2019 fiscal year. Companies
in all other groups were selected if their annual
revenue totaled $1 billion or more for the 2019fiscal year. Once the initial population was
identified, companies that did not have annual
reports available for review in all three years
were removed from the population to ensure a
consistent population of companies and theirreporting could be reviewed across all three
years. Companies were also removed from theinitial population if they did not have annual
reports available in English in all three years.
This approach resulted in a final review
population of 1,701 companies.30
For this year’s status report, the Task Forcestarted with the 1,701 companies used in the2020 status report. However, 50 companies
from the 2020 review population no longer exist
as individual entities or did not have reports
available in English for fiscal year 2020. Removing
those 50 companies from the review population
resulted in a final population of 1,651 publiccompanies for the Task Force’s 2021 AI review(Figure B1).
It is important to note that there were several
methodological changes between the 2020

29

Figure B1
AI Review Population Size
Industry

NumberBanking282

Insurance

132

Energy267

Materials and Buildings

404

Transportation

158

Ag., Food, and Forest Products

142

Technology and Media

106

Consumer Goods

160

Total

1,651

AI review and 2021 AI review. These changes
may limit the comparability of the 2021
results to those conducted in 2018–2020. The
methodology used to conduct this year’s AI
review employs deep learning–based natural
language models that have been shown tounderstand meaning and semantic context intext documents. 31, 32 More details about themethodology are provided in Appendix 2: AI
Review Methodology.
Findings from Analysis
This section summarizes the results from theTask Force’s AI review of companies’ 2018, 2019,and 2020 reports for alignment with the Task
Force’s 11 recommended disclosures.
TCFD-Aligned Reporting Overview
Figure B2 (p. 30) shows the AI review
results by year for each of the Task Force’s
recommended disclosures. Due to the change
in the AI technology, the results are notdirectly comparable to those in the 2020 status
report, although they are broadly consistent.
Notably, the 2021 AI employed a more stringent
methodology for identifying climate-specificlanguage related to governance, resulting
in lower percentages for the Governancerecommended disclosures than would haveresulted from a less targeted approach.

TCFD, Final Report: Recommendations of the Task Force on Climate-related Financial Disclosures, June 29, 2017.

30

TCFD, 2020 Status Report, September 22, 2020.

31

Devlin, et al., “Bert: Pre-training of deep bidirectional transformers for language understanding,” October 13, 2018 (Revised May 24, 2019).

32

Wang, et al., “GLUE: A multi-task benchmark and analysis platform for natural language understanding,” 2018.

29

The Task Force on Climate-related Financial Disclosures

The level of disclosure varies significantly
across the Task Force’s 11 recommended
disclosures, as does growth rate of disclosure,which ranged from four percentage points to
12 percentage points across the recommended
disclosures. The AI review found an averageof 32% disclosure across all 11 recommended
disclosures, with companies disclosing in linewith certain recommended disclosures more
frequently than others. Overall, the averagelevel of disclosure increased by 13 percentage
points from 2018 to 2020.

Figure B2

TCFD-Aligned Disclosures by Year
Recommendation

Recommended
Disclosure

Pt. Change
2018–2020

Governancea) Board Oversight

16

Percent of Companies That Disclose
Information Aligned with TCFD
Recommended Disclosures
9%
13%
25%

A.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosuresb) Management’s Role

9

9%
11%
18%

Strategya) Risks andOpportunities

14

38%
42%
52%

b) Impact on
Organization

C.
Disclosureof Financial Impact

13

26%
30%
39%

c) Resilience of Strategy

8

Appendices

5%
7%
13%

Risk Managementa) Risk ID andAssessment Processes

14

16%
20%
30%

Metrics
and Targetsb) R isk Management
Processes

15c) Integration into
Overall Risk
Management

17a) Climate-Related
Metrics

10b) S cope 1, 2, 3
GHG Emissions

10

14%
17%
29%
10%
17%
27%
34%
40%
44%
27%
31%
37%

c) Climate-Related
Targets

Legend:

2018

2019

13

21%
24%
34%

2020

30

The Task Force on Climate-related Financial Disclosures

Disclosure increased more between 2019and 2020 than in any previous year assessed,
consistent with global momentum aroundclimate-related reporting. This momentum
is discussed in further detail in Section A.
Initiatives Supporting TCFD. However, progressis still needed, with only 50% of companies
reviewed disclosing in alignment with at least
three recommended disclosures.

A.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures
C.
Disclosureof Financial Impact
AppendicesCompanies remain more likely to disclose
information on their climate-related risks
and opportunities (Strategy a) than on any
other recommended disclosure, with overhalf of the companies reviewed including
such information in their 2020 reports.
However, disclosures on companies’ processes
for identifying, assessing, and managing climaterelated risks, and whether those processes
are integrated into the company’s overall risk
management, remain below average. While
companies are increasingly disclosing theirrisks, the processes through which they manage
those risks is currently less transparent —although between 2018 and 2020 disclosure
increased notably for the three Risk Management
recommended disclosures.
Disclosure of the resilience of companies’
strategies under different climate-related
scenarios (Strategy c), although still theleast reported recommended disclosure,encouragingly increased from 5% ofcompanies in 2018 to 13% in 2020. While this
8% growth represents a growth rate below
the average, given the relatively low starting
point of this recommended disclosure, thisrepresents a significant increase of disclosure
rates. The percentage of companies disclosing
the resilience of their strategies continues tobe the lowest of all recommended disclosures.
Section C. Disclosure of Financial Impact
describes several challenges noted by preparersthat relate to implementing elements of thisrecommended disclosure.

33

Although the Task Force recommends
disclosure of governance regardlessof materiality, the Governancerecommendation remains the least disclosed
recommendation. The two Governancerecommended disclosures were the second
and third least disclosed of the Task Force’s
11 recommendations, with 25% disclosing
information on board oversight (Governance a),and 18% disclosing information on the role ofmanagement (Governance b). Disclosure alignedwith all three Risk Management recommended
disclosures was also below average, despite
those recommended disclosures not being
subject to a materiality threshold. However, theRisk Management recommended disclosures
saw greater increases from 2019 to 2020 thanmany other areas. Information aligned withfive of the six Strategy and Metrics and Targets
recommended disclosures was reported at ahigher rate than the overall average of 32%,
despite being subject to a materiality threshold.
While disclosure of metrics and targets isstrong, growth has slowed. Disclosure of
Metrics and Targets a), b), and c) are all above
the overall average. There has also been strong
growth in disclosure of Metrics and Targets c),which has increased by ten percentage points
since 2019, from 24% to 34%. However, thegrowth rate of disclosure of climate-related
metrics (Metrics and Targets a) has slowed,
dropping from six percentage point growthfrom 2018 to 2019 to four percentage point
growth from 2019 to 2020. This represents theslowest growth of any of the recommended
disclosures over the last year, closely followedby disclosure of Scope 1, Scope 2, and Scope 3
GHG emissions (Metrics and Targets b), which
increased by six percentage points to 37%
disclosure. 33 To support companies in theirefforts to disclose in line with the Metrics
and Targets recommendation, TCFD this year
developed guidance to assist companies withdisclosure of climate-related metrics, targets,and transition plans.

Disclosure of Strategy c) also increased by six percentage points.

31

The Task Force on Climate-related Financial Disclosures

TCFD-Aligned Reporting in Select Industries

A.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures
C.
Disclosureof Financial Impact
AppendicesThis section summarizes the results of the AI
review of 2018, 2019, and 2020 disclosures
for the eight industries reviewed. To provide
a simple comparison of reporting across theeight industries, Figure B3 shows the average
percentage of disclosure across the 11
recommended disclosures by industry for all
three years reviewed. Figure B4 (p. 33) shows thebreakdown of disclosure percentage for each of the
11 recommended disclosures by industry for fiscal
year 2020 reporting, and Appendix 3: AI Review
Results by Industry includes the breakdown ofresults by industry and recommended disclosure
for all three years reviewed.

Figure B3
Overview of Disclosure by Industry

Materials and Buildings companies now
lead on disclosure. The average level of
disclosure across the 11 recommended
disclosures for fiscal year 2020 was 38% forMaterials and Buildings companies. This
group principally leads in disclosure of metrics
and targets information, with GHG emissions(Metrics and Targets b) being reported at a rate 13
percentage points higher than the next closest
group (Agriculture, Food, and Forest Products).
Materials and Buildings companies also showed
the fastest growth rate in disclosures of anygroup, with a 17-percentage-point increase indisclosure since 2018.
Different industries prioritize different
recommended disclosures. The Insurance
industry significantly increased its average levelof disclosure by 11 percentage points between
2019 and 2020. The Insurance industry now leads
all groups by at least 15 percentage points indisclosure of risk management processes (RiskManagement b). This is consistent with feedback
given to the Task Force on the criticality ofclimate-related impact assessments to many
insurance companies.

Industry

Average % by
disclosure year

Pt. change(′18–′20)

2018

2019

2020

Materials andBuildings

21

26

38

17

Energy

24

31

36

12

Insurance

22

23

34

12

Ag., Food,and Forest
Products

20

21

30

10

Banking

15

20

28

13

Transportation

17

20

26

9

Consumer
Goods

15

18

26

11

Technology
and Media

11

12

16

5

Groups seen to be less carbon intensive
disclose less. Technology and Media companies
have made the smallest improvements indisclosures, increasing by five percentage
points since 2018. This group now has 16%
disclosure on average across the recommended
disclosures. As Technology and Media is
generally seen as a less carbon-intensive
industry than most of the other industries
assessed, there is likely less investor pressure
on Technology and Media companies to increase
their disclosure.

While Energy companies disclose second moston average with 36% disclosure, they have thehighest disclosure of risks and opportunities(Strategy a) at 67%. However, some otherindustries lead Energy companies in disclosureof metrics and targets, particularly disclosure of
GHG emissions (Metrics and Targets b), which aredisclosed at 36%.

32

The Task Force on Climate-related Financial Disclosures

Figure B4Disclosure by Sector: 2020 Reporting

B.
State of Climate-Related
Financial Disclosures

Energy(267)

Materials& Buildings(404)

Recommended Disclosure

Governancea) Board Oversight

22%

35%

34%

27%

b) Management’s Role

17%

23%

20%

23%

a) Risks and Opportunities

45%

52%

67%

61%

b) Impact on Organization

35%

36%

47%

49%

c) Resilience of Strategy

15%

18%

18%

14%

a) R
 isk ID and Assessment
Processes

33%

37%

30%

33%

b) Risk Management Processes

32%

47%

32%

31%

c) I ntegration into Overall
Risk Management

29%

39%

31%

29%

a) Climate-Related Metrics

35%

32%

44%

58%

b) Scope 1, 2, 3 GHG Emissions

27%

30%

36%

52%

c) Climate-Related Targets

22%

27%

41%

43%

Transportation(158)

Ag., Food& Forest(142)

Technology& Media(106)

Consumer
Goods
(160)

Risk Management

Metrics
and Targets

C.
Disclosureof Financial Impact
AppendicesInsurance(132)

Recommendation

StrategyA.
Initiatives
Supporting TCFD

Banking(282)

Recommendation

Recommended Disclosure

Governancea) Board Oversight

23%

17%

6%

20%

b) Management’s Role

15%

13%

8%

16%

a) Risks and Opportunities

49%

50%

25%

41%

b) Impact on Organization

36%

31%

28%

26%

c) Resilience of Strategy

6%

11%

7%

8%

a) R
 isk ID and Assessment
Processes

25%

28%

12%

23%

b) Risk Management Processes

22%

25%

8%

21%

c) I ntegration into Overall
Risk Management

18%

23%

11%

18%

a) Climate-Related Metrics

41%

48%

26%

42%

b) Scope 1, 2, 3 GHG Emissions

28%

39%

24%

37%

c) Climate-Related Targets

28%

41%

25%

35%

Strategy

Risk Management

Metrics
and Targets

The numbers in parentheses represent the size of the review population.

Legend: Low to high percentage of disclosure

33

The Task Force on Climate-related Financial Disclosures

TCFD-Aligned Reporting by Region

A.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures
C.
Disclosureof Financial Impact
AppendicesCompanies in the AI review population werecategorized into five regions based on thelocation of their headquarters to consider
potential regional differences. Similar to theapproach taken toward industries, Figure B5
shows average percentage of disclosure acrossthe 11 recommended disclosures by region for
all three years reviewed. Figure B6 (p. 35) shows
the breakdown of disclosure percentage foreach of the 11 recommended disclosures byregion for fiscal year 2020 reporting.

Figure B5
Overview of Disclosure by Region

Europe remains the leading region fordisclosures, with average level of reporting
across the 11 recommended disclosuresfrom fiscal year 2020 now at half of European
companies assessed.34 European companies
analyzed now disclose 16 percentage points
more than the next closest region (Asia Pacific).
Europe is particularly prominent in disclosure of
metrics and targets information, with disclosureof climate-related targets (Metrics and Targetsc) being reported at 61%, 36 percentage points
higher than the next closest region. Furthermore,
75% of European companies reviewed disclose
climate-related metrics (Metrics and Targets a).
Europe’s leadership is likely driven by increasing
governmental pressure and requirements, as
outlined in Section A. Initiatives Supporting TCFD.

RegionAverage % by
disclosure year

Pt. change(҅18–҅20)

2018

2019

2020

Europe

28

35

50

22

Asia Pacific

19

25

34

15

Latin America

11

18

26

15

Middle East
and Africa

10

16

22

12

North America

15

16

20

5

Reporting in Latin America, and the Middle
East and Africa, has continued to progress overthe past year, with reporting at 26% and 22%,
respectively, up from 11% and 10% in 2018.
Progress in Latin America has been largely
driven by disclosure of risks and opportunities(Strategy a), with disclosure at 54%. Potential
drivers of increased reporting in Latin America
are highlighted in Figure B7 (p. 36).

There has been encouraging growthacross multiple other regions. Asia Pacifichas recorded 15 percentage point growthin disclosure since 2018, now disclosing thesecond most of any region assessed at 34%.
While relatively strong in disclosure of therole of management (Governance b) at 23%,ten percentage points higher than the thirdstrongest region, Asia Pacific companies
disclose climate-related targets (Metrics andTargets c) at similar levels to other regions,with 25% disclosure.

34

“ Europe” refers to all European countries assessed, not just members of the European Union.

34

The Task Force on Climate-related Financial Disclosures

Figure B6Disclosure by Region: 2020 Reporting

Appendices

Latin
America(52)

Recommended Disclosure

Governancea) Board Oversight

26%

36%

14%

20%

21%

b) Management’s Role

23%

31%

8%

11%

13%

a) Risks and Opportunities

48%

67%

32%

48%

54%

b) Impact on Organization

39%

50%

26%

35%

31%

c) Resilience of Strategy

15%

24%

6%

7%

10%

a) R
 isk ID and Assessment
Processes

35%

50%

20%

17%

29%

b) Risk Management Processes

32%

47%

15%

19%

27%

c) I ntegration into Overall
Risk Management

32%

41%

11%

18%

21%

a) Climate-Related Metrics

54%

75%

36%

23%

37%

b) Scope 1, 2, 3 GHG Emissions

42%

64%

26%

21%

25%

c) Climate-Related Targets

25%

61%

24%

25%

21%

Risk Management

B.
State of Climate-Related
Financial Disclosures
C.
Disclosureof Financial Impact

North
America(762)

Recommendation

StrategyA.
Initiatives
Supporting TCFD

Europe(424)

MiddleEast andAfrica(80)

Asia
Pacific(333)

Metrics
and Targets

The numbers in parentheses represent the size of the review population.

Legend: Low to high percentage of disclosure

35

The Task Force on Climate-related Financial Disclosures

Figure B7

Spotlight: Potential Drivers of TCFD-Aligned
Disclosure in Latin America
The Task Force’s 2021 AI review demonstrated a rise in TCFD-aligned disclosure throughout Latin America
for the 2020–2021 reporting cycle. The following list provides illustrative examples of initiatives that may havecontributed to this increase in disclosure.

A.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures
C.
Disclosureof Financial Impact
Appendices

Mexican Banking Association (ABM):
In 2019, ABM launched a Climate Risk Capacity
Building Program, including a “TCFD readiness tool”
and other TCFD modules, to support Mexican banks.

Brazilian Federation of Banks (FEBRABAN):
In 2019, FEBRABAN published Implementing the TCFD
recommendations: a roadmap for the Brazilian banking
sector to support banks’ TCFD efforts.

Ministry of Finance of Chile:
In 2020, with support from the Inter-American
Development Bank (IDB), UNEP FI, UK Embassy, and
the Public-Private Working Group on Green Finance ofChile, the Ministry held a series of webinars to educate
financial market participants on the TCFD and climate.

Mexican Green Finance Advisory Council (CCFV):
In 2020, Mexico’s CCFV issued a request to
public issuers to disclose climate-related risks,recommending alignment to the TCFD.

Bank of Mexico (BdeM):
In 2020, BdeM issued recommendations for financial
companies to enhance their sustainable finance and
ESG-related risk strategies. The recommendations
focus on the TCFD as the main framework to manage
and report climate-related risks and opportunities.

Central Bank of Brazil (BCB):
In 2020, the BCB announced a new sustainability
agenda, including a framework for more transparent
climate-related disclosure based on the TCFD
recommendations. It will be implemented over twophases, with both phases to be launched by the endof 2022.

Peruvian Securities Commission (SMV):
In 2020, SMV declared support for the TCFD, in line witha commitment to promoting best business practices in
the Peruvian securities market.

North American companies’ disclosure is at 20%
across all companies assessed; however, thisis skewed by the large sample of companies
included in the analysis (762, versus 52 in
Latin America). The sample of North Americancompanies reviewed incorporated a range ofcompany sizes, and had a heavier skew toward
Media and Technology companies than in someother regions. When considering all North
American companies analyzed, despite 48%
disclosure of risks and opportunities (Strategy a),
metrics and targets in particular are disclosed
less than in other regions.
Figure B8 shows the top 50 companies by 2020
revenue of the population analyzed for eachregion. This view shows North America disclosing
second most, at 42% (versus Europe’s 68%).

Figure B8Disclosure by Region:
2018–2020 Reporting for Top 50
Companies by 2020 Revenue by Region
RegionAverage %disclosure in 2020

Europe68

North America

42

Asia Pacific

36

Latin America

27

Middle East and Africa

27

36

The Task Force on Climate-related Financial Disclosures

TCFD-Aligned Reporting by Company Size
The Task Force divided the AI review population
into thirds to assess results by company size:
those with a market capitalization of less than
$3.4 billion, those with a market capitalizationof $3.4 billion to $12.2 billion, and those witha market capitalization of more than $12.2
billion. Figure B9 shows average percentage
of disclosure across the 11 recommended
disclosures by company size for all three years
reviewed. Figure B10 shows the breakdownof disclosure percentage for each of the 11
recommended disclosures by company size forfiscal year 2020 reporting.

B.
State of Climate-Related
Financial Disclosures

While reporting by the largest companies
remained stronger than reporting bysmaller companies, fewer than half of thelargest companies reviewed are reporting
climate-related information in line with
the TCFD recommendations. Forty-fourpercent of companies assessed with a market
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 theC.
Disclosureof Financial Impact

Figure B10

A.
Initiatives
Supporting TCFD

AppendicesFigure B9Overview of Disclosure by Company Size
Company size

Average % by
disclosure year

Pt. change(҅18–҅20)

2018

2019

2020

>$12.2B
Market Cap

29

33

44

15

$3.4B–$12.2B
Market Cap

18

22

31

13

<$3.4B
Market Cap

10

14

20

10

bottom third (less than $3.4B) disclosed in linewith the TCFD recommendations.
Disclosure from the largest companies
continues to grow the fastest, with a 15
percentage point increase in disclosure since
2018. However, there has been encouraging
growth in reporting by companies in the bottom
two thirds since 2018 (less than $3.4B and$3.4B–$12.2B market capitalizations), with 13
and ten percentage point growth, respectively.

Disclosure by Market Cap: 2020 Reporting<$3.4B
Market Cap(540)$3.4B–$12.2B
Market Cap(541)>$12.2B
Market Cap(542)

Recommendation

Recommended Disclosure

Governancea) Board Oversight

12%

24%

39%

b) Management’s Role

10%

18%

27%

a) Risks and Opportunities

38%

52%

67%

b) Impact on Organization

30%

36%

51%

c) Resilience of Strategy

5%

13%

20%

a) R
 isk ID and Assessment
Processes

16%

31%

42%

b) Risk Management Processes

17%

30%

41%

c) I ntegration into Overall
Risk Management

12%

26%

41%

a) Climate-Related Metrics

31%

43%

57%

b) Scope 1, 2, 3 GHG Emissions

26%

36%

50%

c) Climate-Related Targets

19%

30%

54%

Strategy

Risk Management

Metrics
and Targets

The numbers in parentheses represent the size of the review population.

Legend: Low to high percentage of disclosure

37

The Task Force on Climate-related Financial Disclosures

Examples of Climate-Related Disclosures
This section provides recent examples of reporting aligned with the Task Force’s 11 recommended
disclosures. These examples were primarily sourced from reports covering the fiscal year 2020
reporting period. The following sub-headings reflect each of the TCFD’s 11 recommended disclosures,within the TCFD’s recommendations. The examples may not be applicable to all sectors and should beconsidered within the framework of the sector in which the company operates.
Governancea) D escribe the board’s oversight of climate-related risks and opportunities.
Figure B11 describes the information disclosed by Legal and General Group, regarding how its Board
prioritizes, identifies, and reviews climate-related risks and opportunities, as well as its climaterelated governing bodies, individual Board roles and responsibilities, and feedback mechanisms.

Figure B11

Example Disclosure: Legal and General GroupA.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures
C.
Disclosureof Financial Impact
AppendicesIndustry: Asset Managers and Asset Owners
Board oversighton investing in clean energy

Throughout the year, the GroupCEO Report, divisional CEO Reports
and Chief Risk Officer (CRO) Reportto the Group Board detailed thechallenge of climate change andthe new opportunities presented
by it, including continued focus

The Group Chief Financial Officer(CFO), who is also a Board member,is responsible for how market risks
connected to our investments(including risks arising from climatechange) are identified, considered
and managed.

The Board is ultimately accountable technologies that support zerocarbon homes and climatefor the long-term stewardship ofcommitted cities.
the Group. Responding to climatechange and the risks associated with
Nigel Wilson, Group CEO, has
it are of importance to the Board.
spearheaded the Group’s
engagement on a range of climate
In early 2020 the Group addedchange and environmental‘addressing climate change’ as one
initiatives. Nigel is actively engagedof our six strategic growth drivers,emphasising the importance of climate and takes responsibility for theGroup’s strategic direction andrisk and the opportunities arisingfrom the necessary energy transition. progress on this important topic.

The CRO is responsible for ensuringthat an appropriate strategy isin place to understand, identify,
measure, monitor, control and reportrisks from climate change in line withthe risk strategy and risk appetiteparameters set by the Group Board.
The CRO also supports business
managers in the development ofappropriate processes to monitor
and report exposures to the risks
from climate change.
The Group Board, through theGroup Risk Committee (GRC) and
Executive Risk Committee (ERC),
has delegated oversight of the
management of the risks associatedwith climate change to the Group
Environment Committee (GEC).

Legal and General Group Plc, 2020 Climate Report in line with recommendations from the Task Force on Climate-related Financial Disclosures, p. 8
Note: Some content was reformatted in order to fit the page.

38

The Task Force on Climate-related Financial Disclosuresb) D escribe management’s role in assessing and managing climate-related risks
and opportunities.
Figure B12 describes ArcelorMittal management’s role in identifying, assessing, and managing
climate-related risks and opportunities. It describes specific roles and responsibilities, personnel
involved, relevant feedback mechanisms, and how managerial oversight informs group-level andclimate change strategy.

Figure B12

Example Disclosure: ArcelorMittal
Industry: Materials and Buildings
Section 3 Our opportunities, risks and governance of climate change
3.3 GovernanceA.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures
C.
Disclosureof Financial Impact
AppendicesAppointments, Remuneration,
Corporate Governance andSustainability (ARCGS) committee
Chaired by lead independent director
Mr. Bruno Lafont
The ARCGS oversees the implicationsof sustainable development
issues for the company under fivesustainability themes, of which one
is climate change. Members of the
ARCGS are independent and receive
regular training on climate changerelated issues. Their experience ofsustainability has been gained throughtheir leadership roles in the cement,
mining and global consulting sectors.
The committee is chaired by the leadindependent director on the Board, Mr.
Bruno Lafont, who has been a board
member of the World Business Council for
Sustainable Development for three years.
The Committee considers theimplications of climate change for thebusiness and oversees the company’s
strategic planning of resources andinvestments in response to the risks
and opportunities that arise, as wellas having oversight of policy andstakeholder trends. It receives regular
reports from senior management
on stakeholder expectations, thecompany’s low-emissions technology
strategy, climate-related policy
engagement and carbon performance.
Each year the ARCGS Committee
spends time undertaking a deep
dive on climate change to ensure
they remain updated with the latest
science, technology and stakeholder
developments. The chair of the ARCGS
liaises closely with the chair of the
Audit & Risk Committee, and provides asummary of its work on climate change
to the full Board.
Audit & Risk Committee
Chaired by non-executive independent
director Ms. Karyn Ovelmen
The Audit & Risk Committee ensuresthat the interests of the company’s
shareholders are properly protected inrelation to risk management, internal
control and financial reporting. It
oversees both the identificationof risks to which the ArcelorMittalgroup is exposed, via regular senior
management reports, and the
management response to these risks.
Executive Office
Executive Chairman Mr. Lakshmi N.
Mittal, and CEO Mr. Aditya Mittal
The Executive Office works closelywith executive officers and membersof the Management Committee on key
strategic issues.
Group Management Committee
Chaired by Group CEO Mr. Aditya Mittal
The Group Management Committee
regularly considers climate-related risks
and group-level strategy. Members
includes the leaders of all segments andmajor corporate functions.
Corporate Finance and Tax Committee
Chaired by Mr. Genuino Christino, CFO
The CFTC meets regularly to review thefinancial performance, tax planning andtreasury analysis of the business. It is
responsible for introducing policies andcontrols and implementation of strict
policies and procedures to manage andmonitor financial market risks. The CFTC
approves all corporate finance/funding/treasury files including for example the
Revolving Credit ESG facility.
Group Climate Council
Chaired by Mr. Brad Davey,
EVP business optimisation
Group Climate Council is responsiblefor informing and shaping thecompany’s climate change strategy,
considering both technology andstakeholder relations. Members of thegroup include VP government affairs,
VP corporate communications andcorporate responsibility; VP head ofcorporate strategy; VP technology
strategy; CTO Europe, VP climate action
Europe, GM, head of sustainability;
CMO Global Automotive.
Investment Allocations Committee
Chaired by CEO Mr Aditya Mittal and
Mr. Brad Davey, EVP business
optimisation

The Investment Allocations Committee
authorises large capex projects, including
those designed to deliver carbon andenvironmental improvements, andreviews CO2 impact of all proposals.
Committee members include EVP andchief financial officer, Mr. Genuino
Cristino, chief technical officer, Mr.
Pinakin Chaubal, and VP head ofcorporate strategy, Mr. David Clarke. The
IAC reviews the CO2 impact of all projects
as part of the evaluation process.
For decarbonisation projects inparticular, investment project concepts
are given the green light at executive
level as part of the investment strategy
discussed at the Climate Investment
Strategy Committee. These are thenscrutinised at the IAC which, after
the launch of our new global targets,will also ensure that no approved
project that is not specifically aimed
at decarbonisation, will reduce thecompany’s chances of achieving our
CO2 reduction targets.
Group CTO Council
Chaired by Chief Technical Officer
Mr. Pinakin Chaubal
The technical council coordinatesand oversees progress on the global
technology roadmap via regional andproject-based committees involving
CTO and R&D.
Sustainable Development Council
Chaired by EVP business optimisation
Mr. Brad Davey
The Sustainable Development Council
ensures that material sustainability
issues and progress reports arebrought to the attention of the ARCGS,
and that guidance from the ARCGS isduly followed up in action plans.
XCarb™ Technical Panel
Chaired by EVP business optimisation
Mr. Brad Davey
The purpose of the panel is to review
requests from the network to havetheir products or projects appearing
beneath the XCarb™ brand.

ArcelorMittal, Climate Action Report 2, p. 48
Note: Some content was reformatted in order to fit the page.

39

The Task Force on Climate-related Financial Disclosures

Strategya) D escribe the climate-related risks and opportunities the company has identified overthe short, medium, and long term.
Figure B13 describes Orbia’s climate-related risks and opportunities identified over the short,medium, and long term, including details of time horizon, risk type, risk classification, and magnitudeof financial impact. It also provides additional details on the scope of time horizon
used and quantifies levels of financial impact in terms of EBITDA.

Figure B13

Example Disclosure: Orbia
Industry: Agriculture, Food, and Forest Products; Materials and BuildingsA.
Initiatives
Supporting TCFD

2.a Climaterelatedrisks andopportunities
identified in
the short,medium andlong term.

B.
State of Climate-Related
Financial Disclosures

Climate change is a core challenge as Orbia transforms into a future-fit andresilient set of businesses. Each business group regularly develops and adapts
their strategy to ensure Orbia’s products and solutions address risks andopportunities of climate change.

Risks
As part of our business processes, we continually identify physical and transition
risks, quantifying their potential financial impacts and time horizon. Those risks
with higher financial impact are prioritized for action. See Table 1 for details.
Opportunities
Further detail of identified opportunities can be seen in Table 2.
Financial impact ranges

NOTE: impact range labels are aligned with categories used in Carbon Disclosure Project
reporting and reflect Orbia’s reviewed risk management processes

C.
Disclosureof Financial Impact

CDP response section C2.1,
C2.2, C2.3 and C2.4
Orbia Climate Risk
Assessment
Orbia 2020 Sustainability
Report:Risk Management p. 7
Sustainability Approachp. 22
Sustainable Solutions inPractice p. 35
Orbia 2020 Annual Reportp. 22, 26, 27, 35, 36, 74, 115

We have 5 levels to define substantive financial impact:
1. High: $50MM or greater USD
2. Medium-High: $37.5MM USD – $50MM USD
3. Medium: $22.5MM - $37.5MM USD
4. Medium-Low: $7.5MM - $22.5MM USD
5. Low: Less than $7.5MM USD

AppendicesTime Horizons•Short term: Up to 1 year
•Medium term: 1-4 years•Long term: 5 years and above

Table 1: Key Climate-Related Risks Identified
TIME
HORIZON

CLASSIFICATION

Physical

Chronic

Increased water stress and droughtleading to reduced capacity, resulting
in decreased revenues.

Low

Transition

Policy and Legal

Carbon pricing mechanisms leading toincreased direct costs.

Low

Transition

Policy and Legal

Mandates on and regulation ofexisting products and services (e.g.
The AIM Act, which was signed into
law in Dec. 2020, and directs EPA toestablish limits to production andconsumption of HFCs in line with theKigali amendment), leading to reduced
demand for products and services anddecreased revenues from HFCs.

Medium - Low

Physical

AcuteIncreased severity and frequency
of cyclones and floods, leading to
reduced capacity and decreased
production and revenues.

Medium - Low

Short term

Mediumterm

RISK DESCRIPTIONMAGNITUDE
OF FINANCIAL
IMPACTRISK TYPE

REFERENCE/FURTHERDETAILS

CDP response
section 2.3
Orbia 2020
Annual Reportp. 22, 26, 27, 35,
36, 74, 115

Orbia, TCFD Report 2020, pp. 2–3
Note: Some content was reformatted in order to fit the page.

40

The Task Force on Climate-related Financial Disclosuresb) D escribe the impact of climate-related risks and opportunities on the company’s businesses,
strategy, and financial planning.
Figure B14 describes the impact of climate-related opportunities on Ford’s strategy around use ofalternative fuels, electrification, and supply chain. It quantifies relevant commitments and provides
specific details related to its strategic planning and partnerships.

Figure B14

Example Disclosure: Ford
Industry: Transportation
Sustainability
Aspirations

A.
Initiatives
Supporting TCFD

ClimateChangeAchievecarbonneutrality by
2050

Topic Area

Goals

Reducing
Our Vehicle
Footprint• We have committed to science-based emissions targets for our operations
Improve fueleconomy acrossand vehicles:
our global vehicle– Reduce Scope 1 and 2 greenhouse gas (GHG) emissions by 76 percent
lineup, consistentby 2035 from a 2017 baseline
with regulatory– Reduce Scope 3 GHG emissions from use of sold products by 50
requirements andpercent per vehicle km by 2035 from a 2019 baseline
climate stabilization• C ombined U.S. car and truck fleet corporate average fuel economy improved

Progress• We have used our EcoBlue technology and award-winning EcoBoost®

technology in millions of engines worldwide

B.
State of Climate-Related
Financial Disclosures
C.
Disclosureof Financial Impact• C DP Climate Change questionnaire

Offer alternativefuel vehicles• We offer several models powered by ethanol and biodiesel

Pursue ourelectrification
strategy• We are increasing our planned investment in electrification to more than• A wide range of our commercial vehicles run on compressed natural gas(CNG) and liquefied petroleum gas (LPG)
Electrification$22 billion through 2025
• We have committed that by mid-2026, 100 percent of our passenger

vehicles in Europe will be zero-emissions capable, all-electric or plug-in
hybrid, moving to all-electric by 2030. Similarly, our European commercial
vehicles will be zero-emissions capable, all-electric or plug-in hybrid by2024, with two-thirds of Ford’s commercial vehicle sales expected to be
all-electric or plug-in hybrid by 2030

Appendices• Our new electrified models include the all-electric Mustang Mach-E andF-150 PowerBoost Hybrid on sale today, plus the all-electric E-Transit
coming late this year and the all-electric F-150 arriving by mid-2022
Sustainable
Operations

Reduce global
facility CO2emissions by 18
percent (2019–2023)• We achieved a 40 percent absolute reduction in our global manufacturing

Minimizing
our Supply
Chain Impact

Engage with our
supply chain tounderstand its
carbon footprint• We have surveyed 233 production suppliers (85 percent) using CDP Supply

carbon footprint since 2011

Chain program’s Climate Change questionnaire

Work with selected • We have shared best practice examples with more than 50 key Tier 1
suppliers to reduce
suppliers through PACE
our collective• We have introduced a streamlined version of our supply chain
environmental
sustainability program, FastPACE, to reach select suppliers in China,
footprint throughIndia, Thailand and South Africa
PACE
Sustainable
Air
Operations
Attain zero
emissions fromour vehicles
and facilities

Air emissions
reductions otherthan CO2

Sustainable
EnergyOperations
Use 100
percent local,
renewable
electricity in all
manufacturing
by 2035• O ver the past decade, we have achieved a 40 percent reduction in our
Achieve 32
percent renewablecarbon footprint through improved energy efficiency and conservation atelectricity by
our facilities and in our manufacturing processes
2023 and 100• Our Dearborn Truck Plant, Michigan Assembly Plant and several new buildings
percent locallyon our Research and Engineering and Corktown campuses will be powered bysourced renewable
100 percent locally sourced renewable electricity by January 2022
electricity• Our global amount of renewable electricity for 2020 was 29%
by 2035• We are working to reduce emissions of non-CO2 pollutants, inaccordance with increasingly stringent standards around the world• We are working to reduce volatile organic compound (VOC) emissions
during the vehicle painting process, using a combination of approaches
including abatement, color blocking and improved purge recovery

Ford, Integrated Sustainability and Financial Report 2021, p. 12
Note: Some content was reformatted in order to fit the page.

41

The Task Force on Climate-related Financial Disclosuresc) D escribe the resilience of the company’s strategy, LendleasetakingAnnual
into
consideration
Report2021 Risk and Climatedifferent
Related Resilience
climate-related scenarios, including a 2°C or lower scenario.

53

Figure B15 describes Lendlease’s planning for potential climate-related scenarios, including
sensitivity and types of impact of risks and opportunities. It details various scenarios considered,including a lower than 2°C scenario.

Our strategic
resilience to climate
FigureB15 impacts
relatedce

The assessment of the five CRIs per
scenario most likely to appear in themedium term has indicated a greater
resilience (higher residual positive
sensitivity) in our business strategy to ourParis Aligned scenario, a world that seescontinued global commitment to the Paris
Agreement. Our recent commitment tobeing a 1.5ºC aligned business has createdpositive sensitivities to our Transformation

Example Disclosure: Lendlease
Industry: Materials and BuildingsA.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures
C.
Disclosureof Financial Impact
Appendiceswescenarios
a 2–3ºCario).

e workshops used the five CRIs that
re identified as most likely to appear
he next 10 years from each scenario
he basis of review. Participants wereed to:

dentify positive and negative
ensitivities to each CRI relative tother sectors
dentify what actions could be takeno reduce sensitivity and either absorb,
dapt or transform to the CRIs
Determine what the residual sensitivities
would be if those actions were taken.

scenario. As with all real estatecompanies, we have negative sensitivities
to the physical impact of climate change
in a more than 3ºC warmed world, ourPolarisation scenario. The integrationof climate risk assessments into ourinvestment decision making processes
has seen reduced residual sensitivities toclimate impacts.

Scenario

Climate Related Impact

Polarisation scenario (>3ºC)

Impact of climate change on
assets and communities

Our Polarisation Scenario sees a world where climate action isdelayed by the polarisation of climate action. This delay results in aworld where physical climate change risks are the greatest acrossour three scenarios.

Residual Sensitivity
Development Construction Investment

Impact of climate change on
the way we work

The integration of ‘Leadership in Sustainability’ as a strategic priority
Shift in consumer preference
and our Net and Absolute Zero Carbon targets sees high levels of
toward secure and resilient
positive sensitivity in both leadership in decarbonisation and a shiftcommunities
in consumer preference to secure and create resilient communities.
Continued integration of physical climate risk assessments into ourinvestment and business processes is essential to reducing negative
sensitivities and building resilience to physical climate change risk.

Industry leadership in
decarbonisation valued
Impact of climate change
on cities

Paris Alignment scenario (2–3ºC)
Our Paris Alignment Scenario sees a market led transition to a lower
carbon future through global government commitments to the Paris
Agreement, resulting in higher regulation to climate action andwith lower physical impacts of climate change compared to ourPolarisation scenario.
There are many ‘difficult to decarbonise’ products and materials inour supply chain, including cement, steel and aluminium. The costof decarbonisation in our supply chain creates negative sensitivities
for future development opportunities. Our commitment to Absolute
Zero Scope 3 emissions will drive action in our supply chain,creating resilience in our strategy.
Our leadership in sustainability and carbon targets creates similar
positive sensitivities to decarbonisation as per our Polarisation scenario.

Transformation scenario (<2ºC)
Our Transformation Scenario sees a rapid decarbonisation pathway,
where global emissions peak in 2020 and are close to zero in 2040.
The speed of change that is needed to limit global warming to
1.5ºC is likely to create negative sensitivities in our supply chain
as suppliers try to keep pace with decarbonisation demands andshifting preferences towards localisation.
Our leadership in sustainability and carbon targets create similar
positive sensitivities to decarbonisation, as per our Polarisation andParis Alignment scenarios.

Increase speed of change inclimate related impacts

Increase cost of carbon

Demand for decarbonisationof supply chain
Increased scrutiny overactions versus branding
Industry leadership in
decarbonisation valued
Increase speed of change inclimate related impacts
Local companies preferenced
over global ones
Shifting social licence tooperate expectations
Industry leadership in
decarbonisation valued
Shifting consumer preferences
towards lower impact living
Higher negative sensitivity

Higher positive sensitivity

Lendlease, Lendlease Annual Report 2021, p. 53

42

The Task Force on Climate-related Financial Disclosures

In another example, Figure B16 highlights the impact of two transition risk scenarios — both 2°C or
lower — on the risk exposure (i.e., resilience) of Allianz’s strategy. It shows various time horizons,
asset types, risk levels, and factors that may enhance or mitigate potential risk exposures in order
to increase resilience (e.g., policy, technology substitutions, and other market forces).

Figure B16

Example Disclosure: Allianz
Industry: Insurance Companies, Asset Managers
Assets and business impact under transition scenarios (source: Allianz, excerpt)
2ºC

1.5ºC

2020 2025 2030 2035 2040

2020 2025 2030 2035 2040

(M)

(M)

GlobalA.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures
C.
Disclosureof Financial Impact
Appendices

EnergyIntegrated oil and gas

EnergyOil and gas storage
and transportation

EnergyCoal and consumable fuels

Materials

Fertilizers and agriculturalchemicals

Materials

Aluminium

Materials

Steel

Industrials

Industrial conglomerates

Industrials

Airlines

Consumer discretionary

Auto components

Consumer discretionary

Automobiles

Utilities

Electric utilities

Utilities

Renewable electricity

Risk enhancer:

Risk mitigator:

P = policy(P) = policy

T = substitution technology(T) = little substitution technology

MediumM = related market forces(M) = countering market forces

High

(M)

(T)

(T)

(T)

P

T, P

(T)

(T)

(T)

P
P

T, P

P, T

T

P

P

T

T

(M)

T

T, P
(T)

(T)

(T)

P

P
P

(M)

T, P

(T)

P

P

P, T

P, T

P

P

T

T

Risk:
Low

Very highAllianz Group, Sustainability Report 2020, p. 86
Note: Some content was reformatted in order to fit the page.

43

The Task Force on Climate-related Financial Disclosures

Risk Managementa) Describe the company’s processes for identifying and assessing climate-related risks.
Figure B17 describes CPP Investments’ processes for assessing climate-related risks, including
the relationship between climate risks and other risk types. The framework enables assessmentof climate risk in relation to financial and reputational impact.

Figure B17

Example Disclosure: CPP Investments
Industry: Asset Managers
Mandate: “maximize returns without undue risk of loss”
Risk Appetite Statements, Limits & Policies

A.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures
C.
Disclosureof Financial Impact

Strategy/Business Objectives
Plan Adjustment Risk
Market & Credit Risk

Liquidity & Leverage
Risk

Geopolitical
GovernanceAppendices

Operational
Risk

Competition
Strategy Execution

Regulatory& Legal Risk

Strategic
Risk

Data & Tech Disruption
Climate Change

CultureRelative
Underperformance

Financial Impact
Reputation Impact
Risk Event
Identification

Risk Assessment &Measurement

Control
Implementation

Monitoring

Risk Oversight: Independently Measure, Monitor and Report
Assurance and Advisory
CPP Investments, Report on Sustainable Investing 2020, p. 52
Note: Some content was reformatted in order to fit the page.

44

The Task Force on Climate-related Financial Disclosuresb) Describe the company’s processes for managing climate-related risks.
Figure B18 describes Cemex management’s role in identifying, assessing, monitoring, and mitigatingclimate-related risks and opportunities within an overarching Risk Management Process framework.

Figure B18

Example Disclosure: Cemex
Industry: Materials and BuildingsA.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures
C.
Disclosureof Financial Impact
Appendices

Cemex, 2020 Integrated Report, p. 87

45

The Task Force on Climate-related Financial Disclosuresc) D escribe how processes for identifying, assessing, and managing climate-related risks areintegrated into the company’s overall risk management.
Figure B19 describes how PSEG’s processes for identifying, assessing, and managing climate-relatedrisks are integrated into the company’s overall enterprise risk management process. It provides
illustrative examples of risks associated with climate change for each risk category.

Figure B19

Example Disclosure: PSEG
Industry: Energy

A.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures
C.
Disclosureof Financial Impact
Appendices

PSEG, 2020 Climate Report, p. 16

46

The Task Force on Climate-related Financial Disclosures

Metrics and Targetsa) D isclose the metrics used by the company to assess climate-related risks and opportunities
in line with its strategy and risk management process.
Figure B20 describes Standard Bank Group’s metrics for portfolio segments with elevatedclimate-related risks. These risks are quantified and divided by risk type, and are shown
as a percentage of the company’s loan exposure.

Figure B20

Example Disclosure: Standard Bank Group
Industry: BanksA.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures
C.
Disclosureof Financial Impact
AppendicesStandard Bank Group, TCFD Interim Report 2020, p. 11 (excerpt)

47

The Task Force on Climate-related Financial Disclosuresb) D isclose Scope 1, Scope 2, and, if appropriate, Scope 3 greenhouse gas (GHG) emissions,and the related risks.
Figure B21 describes Maersk’s Scope 1, Scope 2, and Scope 3 greenhouse gas emissions, represented
as carbon dioxide equivalents, as well as sources of primary emissions and estimatesof material Scope 3 emissions categories.35

Figure B21

Example Disclosure: Maersk
Industry: Transportation

A.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures
C.
Disclosureof Financial Impact
Appendices

Maersk, 2020 Sustainability Report, 2020

35

Maersk measures CO2 eq, or “carbon dioxide equivalent,” which is defined by the GHG Protocol Corporate Standard as “the universal unitof measurement to indicate the global warming potential (GWP) of each of the six greenhouse gases, expressed in terms of the GWP of one
unit of carbon dioxide. It is used to evaluate releasing (or avoiding releasing) different greenhouse gases against a common basis.”

48

The Task Force on Climate-related Financial Disclosuresc) Describe the targets used by the company to manage climate-related risks and opportunities
and performance against targets.
Figure B22 describes Japan Airlines’ CO2 historical emissions and forward-looking reduction targets.
Japan Airlines’ disclosure in Figure B23 (p. 51) also includes interim targets and specific initiatives
supporting these targets, as well as quantified expenditure deployed toward climate-related risks
and opportunities (investment in SAF).36

Figure B22

Example Disclosure: Japan Airlines (JAL) Group
Industry: Transportation
CO2 Emissions Reduction Targets and Progress

A.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures
C.
Disclosureof Financial Impact
IATA start JAL
reductions operated-1.5%/yr
the world’s
first test
flightpoweredwith SAF
derivedfrom plantmaterial

Appendices

Boeing 747
andAirbusA300
retirement
completed

Boeing 787 ChicagoNarita
introduced
SAFon
international poweredflightroutesInvests
approx.
JPY0.9 Bn
in US SAF
producer(Fulcrum)

San FranciscoHaneda
SAF-poweredflightAirbus A350
introduced
Made-inon domestic
Japan SAF routes
Project
Airbus A350
delivery flights
using SAF

Specific Initiatives from fiscal 2020

Japan Airlines ( JAL) Group, 2020 Sustainability Report, p. 45
Note: Some content was reformatted in order to fit the page.

36

 ustainable aviation fuel (SAF) is a common term used by the aviation industry to describe a nonconventional (fossil-derived) aviation fuel. See theS
International Air Transport Association’s What is SAF? for more information.

49

The Task Force on Climate-related Financial Disclosures

2. TCFD-ALIGNED REPORTING BY ASSETMANAGERS AND ASSET OWNERS
In its 2017 report, the Task Force recommended
that companies provide climate-related financial
disclosures in their public annual financial filings(or other publicly available corporate reporting).
However, the Task Force recognized comparable
reporting by asset managers and asset owners
to their clients and beneficiaries, respectively,
would usually occur in other types of financial
reporting. For purposes of adopting therecommendations, the Task Force recommended
asset managers and asset owners use their
existing channels of financial reporting to theirclients and beneficiaries, respectively, andrecognized such reporting may not be public.
A.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures
C.
Disclosureof Financial Impact
Appendices

Given the wide range of reporting channels
used by asset managers and asset owners andthe lack of a consistent set of public reports
in the two industries, the Task Force excluded
asset managers and asset owners from the AI
review. 37 As a result, the Task Force exploredother means of gaining insight on climaterelated financial reporting by asset managers
and asset owners and ultimately identified
their reporting to the Principles for Responsible
Investment (PRI) as a possible means for
gaining such insight. The Task Force reviewed
aggregated reporting results of asset manager
and asset owner signatories to the PRI for
the 2021 reporting period. 38 PRI signatories
are required to report on their responsible
investment activities on an annual basis by
responding to “indicators” in the PRI reporting
framework; a subset of those indicators isaligned with the Task Force’s recommendations.
Importantly, PRI signatories’ responses tothe indicators are self-reported and a PRI
signatory’s responses to indicators aligned with
the TCFD recommendations do not imply thesignatory meets the recommendations or thatthe signatory provides TCFD-aligned reporting
to its clients or beneficiaries.

Background and Approach
Shortly after the Task Force issued its final
recommendations in June 2017, the PRI
integrated several climate-related indicators
based on the TCFD recommendations and the
supplemental guidance for asset managers andasset owners into its 2018 reporting framework.
The PRI has made adjustments to its climaterelated indicators over the years, including in its
2021 reporting framework. 39
To use signatories reporting to PRI as a proxy
for asset managers’ and asset owners’ TCFDaligned reporting, the Task Force mapped
specific PRI climate-related indicators to its 11
recommended disclosures for 2021 — where
possible — as shown in Appendix 4: PRI
Indicators Mapped to TCFD Recommended
Disclosures. In mapping the PRI’s climaterelated indicators to the Task Force’s
recommended disclosures, we attempted tomaintain consistency in the definitions of the
PRI indicators mapped to the recommended
disclosures between this year and last year. We
were able to map one or more PRI indicators
to each recommended disclosure with the
exception of Strategy c).
For the 2020 reporting period, the PRI madeits governance and strategy climate-related
indicators mandatory for signatories to reportto PRI, but voluntary to disclose publicly. For
the 2021 reporting period, the PRI required
signatories to report and disclose publicly its
governance and most of its strategy climaterelated indicators.40 In the following figures
on TCFD-aligned reporting, the Task Forcedistinguishes between indicators that aremandatory for asset managers and asset
owners to report and disclose and those thatare voluntary.

37

 ased on an assessment of publicly available information by EY, a smaller percentage of asset managers and asset owners disclose TCFD-aligned
B
information compared to companies in other industries. The 2021 EY Global Climate Risk Disclosure Barometer report found the level of disclosure forasset managers and asset owners to be the lowest of the 11 industries they reviewed.

38

In an August 2021 article, PRI informed signatories of certain issues related to its new pilot reporting framework used for the 2021 reporting period,
including that some signatories’ submissions contained data gaps or errors (see PRI’s August 2, 2021, “An important update for all signatories onreporting”). The PRI data used in the analysis in this section was not affected.

39

Adjustments refer to changes to the indicator name, its description, or the associated explanatory notes.

40

O f its six climate-related indicators mapped to the Strategy recommendation, four are mandatory to report and disclose publicly.

50

The Task Force on Climate-related Financial Disclosures

Demographics of PRI Signatories
In the first quarter of 2021, there were 2,720
asset managers and asset owners with $134
trillion in assets under management reportingto PRI on climate-related indicators. This
includes 2,182 asset managers and 538 asset
owners.41 In terms of PRI signatories’ market
coverage, asset manager signatories coveralmost 75% of global assets under managementby asset managers, and asset owner signatories
cover around 24% of global assets undermanagement by corporate and noncorporate
pensions, insurance companies, and reserve/
sovereign wealth funds.42

A.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures
C.
Disclosureof Financial Impact
Appendices

Geographically, these 2,720 asset managers
and asset owners were headquartered in over
60 countries. The geographical spread of the
15 largest countries — based on the numberof asset managers and asset owners reportingon PRI climate-related indicators — is shown in
Figure B23. The United States has the largest
number of asset managers and asset owners
reporting to PRI on climate-related indicators,
followed by the United Kingdom and France,
where the introduction of Article 173 climate
and ESG reporting initiative in 2015 may be
one of the drivers for the high number ofasset managers and asset owners reportingto PRI.43 These results are broadly in line withthe global distribution of asset managers andasset owners, with the largest number of asset
managers and asset owners present in the
United States with 5,058 as of 2021. In Europe,
the largest distribution of asset managers andasset owners is in the United Kingdom with
720 as of 2021.44 Canada and Australia have382 and 262 asset managers and asset owners,
respectively, as of 2021.

Figure B23

Countries with the Largest Number of Asset Managers
and Asset Owners Reporting on PRI Climate-Related
Indicators in 2021
45

United States

517

United Kingdom

417

France231

Canada149

Australia

143

Germany

130

Netherlands

106

Sweden103

Switzerland

99

Japan

73

Luxembourg

68

Spain

66

Italy

59

Brazil58

South Africa

52
0

50

100

150

200

250

300

350

400

450

500

550

Number of asset managers and asset owners

41

Preliminary number, of asset manager and asset owner signatories who reported in 2021, may be subject to change.

42

 oston Consulting Group, Global Asset Management 2020: Protect, Adapt, and Innovate, May 2020; Organisation for Economic Co-operation andB
Development (OECD), Global Pension Statistics; OECD, OECD Insurance Statistics 2019, 2020; and IE Foundation, Sovereign Wealth Funds 2018, 2019.

43

A ssemblée Nationale, Session Extraordinaire de 2014-2015, July 2015.

44

Custom Search Using Preqin’s Investor Advanced Search, July 2021.

45

Preliminary numbers, may be subject to change.

51

The Task Force on Climate-related Financial Disclosures

Review of Asset Manager and Asset Owner
Reporting to the PRI
Figure B24 shows the response rates by asset
manager and asset owner PRI signatories
to the indicators mapped to the TCFD
recommended disclosures. The percentages
shown in Figure B24 are based on the numberof asset managers and asset owners thatreported on each mapped indicator and thetotal number of asset managers and asset
owners that reported in 2021. For both asset
managers and asset owners, the reporting

against the PRI indicators for Governance a) andb), Strategy a) and b) and Risk Management a), b),
and c) is considerably higher than for Metrics
and Targets a), b), and c). According to PRI, thenumber of asset managers and asset owners
who indicated they were using climate-related
metrics was three to four times higher (45%of asset managers responding, 52% of asset
owners responding) than those who provided
additional details on those metrics, such as
the assets under management covered, or the
methodology used to calculate the metric. In
addition, PRI indicated quantitative information

Figure B24

A.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures

Asset Manager and Asset Owner TCFD-Aligned
Reporting to PRI
Recommendation

Recommended Disclosure

Governancea) Board Oversight

Percent Responding
79%85%b) Management’s RoleC.
Disclosureof Financial Impact

Strategy

83%83%a) Risks and Opportunities

77%
77%

Appendicesb) Impact on Organization

61%
56%

c) Resilience of Strategy

25%
35%

Risk Management

Metrics
and Targets

47%
42%

a) Risk ID and Assessment
Processesb) R isk Management
Processes

48%47%c) Integration into Overall
Risk Management

52%
49%

a) Climate-Related Metrics

19%
21%

b) S
 cope 1, 2, 3
GHG Emissions

8%12%c) Climate-Related Targets

7%
10%
0%

20%

40%

60%

80%

100%

Base size: 2,182 asset managers, 538 asset owners
Asset manager

Asset owner

Mandatory PRI indicator
52

The Task Force on Climate-related Financial Disclosures— such as metrics and targets — is morechallenging to report and is generally disclosed
less than narrative reporting.
In its 2020 status report, the Task Forcedescribed the low levels of reporting of themetric it recommended asset managers andasset owners disclose for Metrics and Targets
recommended disclosure b) — the weighted
average carbon intensity (WACI).46 In fact, theTask Force highlighted that the WACI metric had
the lowest percentage of responses across four
different carbon footprinting metrics for eachof the three reporting periods reviewed (2018–2020). Interestingly, for the 2021 reporting

period, the WACI metric had the highest
percentage of responses across the same four
carbon footprinting metrics for asset owners,
as shown in Figure B25. For asset managers,
however, the WACI metric continued to havethe lowest percentage of responses across the
carbon footprinting metrics.
This year, PRI included some of the emerging
alignment metrics (“implied temperature
warming” and “proportion of assets alignedwith the EU Taxonomy”) in its answer options
providing an indication of the number of asset
managers and asset owners that have started toreport using these metrics to PRI.47

Figure B25
A.
Initiatives
Supporting TCFD

Percentage of Asset Managers and Asset Owners Indicating
Use of Metrics to Manage Climate-Related Issues

B.
State of Climate-Related
Financial Disclosures

Total carbon emissions*

11.6%
10.4%

Portfolio carbon footprinting*C.
Disclosureof Financial Impact

10.3%
11.0%

Carbon intensity*

9.2%
10.6%

Weighted average carbon intensity*

Appendices

8.1%
11.7%

Other transition metrics (as specified)

4.0%
4.1%

Implied temperature warming

3.3%
3.3%

Proportion of our property,
infrastructure, or other

3.2%
3.3%

Other physical metrics (as specified)

3.4%
3.0%

Avoided emissions metrics (real assets)

3.0%
2.6%

Weather-related operational losses
for real assets

2.6%
2.2%

Percentage of assets aligned with
the EU Taxonomy

2.3%
3.0%
0%

5%

10%

Base size: 2,182 asset managers, 538 asset owners*Carbon footprinting metrics
Asset manager

Asset owner46

 CFD, 2020 TCFD Status Report, 2020, p. 23, and 2017 TCFD Annex, pp. 37 and 41–42, Supplemental Guidance on the Financial Sector, for Metrics andT
Targets recommended disclosure b) for Asset Owners and Asset Managers.

47“ Implied temperature warming” refers to estimates of global temperature rise associated with the greenhouse gas emissions of a single entity or aselection of entities (See TCFD Forward-Looking Financial Sector Metrics Consultation, p. 18), and “Proportions of assets aligned with the EU Taxonomy”
measures the degree to which an issuer is performing taxonomy-aligned asset management activities (See “Testing the taxonomy: insights from the
PRI Taxonomy Practioners Group”).

53

The Task Force on Climate-related Financial Disclosures

With respect to climate-related targets, Figure
B26 shows that the number of asset managers
and asset owners reporting different types ofclimate-related targets to PRI is fairly low, withmost climate-related targets having response

rates of only 2%–3% of PRI signatories. “Aligningentire group-wide portfolios with net-zero” is thelowest target for asset managers; while “reducing
exposure to assets with significant climatetransition risks” is the lowest for asset owners.

Figure B26

Percentage of Asset Managers and Asset Owners
Indicating Use of Climate-Related Targets
Reducing carbon intensity of portfolios

3.4%
5.8%

A.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures
C.
Disclosureof Financial Impact

Reducing exposure to assets with significant
climate transition risks

2.1%
2.4%

Investing in low-carbon, energy-efficient
climate adaption opportunities

2.0%
3.0%

Aligning entire group-wide portfolios
with net-zero

1.5%
3.0%
0%

5%

Base size: 2,182 asset managers, 538 asset owners*Carbon footprinting metrics
Asset manager

Asset owner

Appendices54

C.
Disclosureof Financial
ImpactThe Task Force on Climate-related Financial Disclosures

C. Disclosure of Financial Impact
While climate change affects nearly all economic
sectors, the level of exposure and the impact
of climate-related risks differ by industry,geography, and organization.48 Furthermore,
the financial impacts of climate-related risks andopportunities on organizations are not always
clear or direct, and, for many organizations,
identifying the issues, assessing theirfinancial impacts, and ensuring that these areappropriately reflected in organization reporting
may be challenging.

A.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures
C.
Disclosureof Financial Impact
Appendices

Despite challenges, the financial impact ofclimate-related risks and opportunities onan organization is critical decision-useful
information that investors, lenders, andinsurance underwriters seek to understand. The
Task Force’s recommendations solicit a range of
disclosures that can inform users’ assessmentsof an organization’s financial performanceover time. Better disclosure of climate-related
financial implications—which enables effective
pricing of climate-related risks and opportunities
and efficient allocation of capital — is a key goalof the Task Force’s work.
Fundamental to pricing risks, including climaterelated risks, is the accurate and timely
disclosure of actual impacts on organizations’financial performance and position. In addition,
given the unprecedented nature of climatechange, organizations’ disclosure of potential
impacts is equally important in assessing anorganization’s exposure to climate-related risks
and opportunities. The Task Force’s Strategy
recommendation addresses disclosure of bothactual and potential impacts associated withclimate change, including financial impacts.

48

However, the Task Force’s annual assessmentsof reporting have found few descriptions of
the potential impacts of climate change. The
Task Force’s AI analysis (Section B. State of
Climate-Related Financial Disclosures) showedthat Strategy c) is disclosed the least out of the
11 recommended disclosures with only 13% oforganizations analyzed disclosing. Given theimportance of such disclosure, the FSB requested
that the TCFD “undertake further analysis on
the extent to which companies describe thefinancial impact of climate-related risks andopportunities.”
To better understand current disclosure offinancial impacts of climate-related risks andopportunities, the Task Force solicited preparer
perspectives on reporting financial impact,
including associated challenges and lessons
learned, and user perspectives on current usesof financial impact disclosures and ways toimprove their usefulness. In addition, the Task
Force analyzed the results of the Task Force’s
consultation on the proposed guidance on
disclosure of climate-related metrics, targets, andtransition plans. Key findings from the analysis
are described in Table C1 (p. 57). In addition,
several examples of disclosures are included
to demonstrate some approaches in current
reporting.
The Task Force hopes that these insights will
help to identify key areas requiring further work,
and will drive progress in the development ofmethodologies and processes for assessing anddisclosing financial impact.

T he Task Force uses the term “organizations” when referring to a broad range of entity types.

56

The Task Force on Climate-related Financial Disclosures

Table C1

Key Findings
Preparer Perspectives on Financial Impact of Climate-Related Risks
and Opportunities
At least one in five preparers that responded to the Task Force’s consultation disclose financial
impact, with disclosure of impact on financial performance more common than impact onfinancial position.
• Twenty percent of preparers currently disclose impact on financial performance, while 14% disclose
impact on financial position, according to the consultation.
• Disclosures vary from qualitative, directional information for potential longer-term financial impacts
to more specific, quantitative financial plans and project budgets in the shorter term and actual financial
values booked in the current period.
• More than 40% of organizations are currently estimating, but not yet disclosing, or planning to estimate
financial impacts.

A.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures
C.
Disclosureof Financial Impact
Appendices

Preparers interviewed reported disclosing potential financial impacts more often thanactual impacts.
• Organizations most commonly disclose potential financial impacts of transition risks based on theirstrategy and supporting financial plans, supported by the use of scenario analysis.
• Disclosure of actual impacts is rarer; organizations interviewed highlighted that the main challenge of
estimating actual financial impact is effective attribution to climate-related events, as financial effects
may have multiple drivers beyond climate.
• Potential financial impacts are most often disclosed in sustainability reports, while actual impacts areoften disclosed in annual reports or captured within notes of financial statements.
The process of estimating financial impacts can lead to improved internal and external
communication, according to findings from preparer interviews.
• Preparers disclosing financial impact often observe improved engagement with investors, lenders,and insurance underwriters.
• The process of conducting financial impact analysis can improve communication among businessand financial decision-makers, and sustainability teams.
Lessons learned from interviews with preparers offer a path forward for organizations earlier
on in their journey:• Enhanced data gathering strategies are critical to enable effective assessment of financial impact.
• Allocating sufficient resources to assessing financial impact helps timely development of decisionuseful information.
• Overcoming institutional siloes enables more effective collaboration and alignment on assumptions
and methodologies used for estimating financial impact.
• Once financial impact has been estimated, approval from relevant internal stakeholders, including
legal teams, is generally required when making public disclosures.

57

The Task Force on Climate-related Financial Disclosures

User Perspectives on Financial Impact of Climate-Related Risks and Opportunities
Over nine out of ten consultation respondents identified as users find disclosureof financial impacts useful.
• Active investors in particular leverage disclosure of actual and potential financial impacts forfinancial impact assessments.
• Some users conduct their own “outside-in” financial impact analysis and compare the outcomeswith that disclosed by preparers, frequently furthering stewardship interactions.
Rating agencies stated that climate-related information is an increasingly important input
into their financial impact assessments, informing the rating process.
• For example, credit rating agencies may consider rising costs of the climate-related transition or
exposure to mortgage-backed securities with high concentration in areas of heightened natural
disaster risk as a part of their credit rating process.
• These users find value in preparers disclosing financial impact information in order to not be solely
subject to an “outside-in” view of the impact of climate-related risks and opportunities on theirfinancial performance and position.

A.
Initiatives
Supporting TCFD

Users have highlighted several areas that would improve the usefulness of information
disclosed on financial impact to support decision-making, including:

B.
State of Climate-Related
Financial Disclosures• amount of expenditure or capital investment currently deployed toward climate-related risks
and opportunities;• amount of expenditure or capital investment to be deployed to meet targets for addressing
climate risks and opportunities, often disclosed in transition plans; andC.
Disclosureof Financial Impact• interconnected reporting linking qualitative disclosures with their actual and potential financial impact.

Appendices1. APPROACH
The Task Force drew from a range of sources
to better understand disclosure of financial
impact as well as associated challenges and uses.
As described in Table C2 (p. 59), the primarysources of information were manual disclosure
reviews, interviews with users and preparersof disclosures, and a consultation conductedby the Task Force. The Task Force reviewed the
public disclosures of 25 organizations in various
industries and jurisdictions that had experience
with assessing financial impact associated withclimate-related risks and opportunities (Figure
C1, p. 59). The Task Force then interviewed
representatives from the 25 organizations,
including individuals who could provide
perspective on challenges related to preparing
climate-related disclosures and how to address
those challenges, and individuals who could
provide insight on how disclosures are used infinancial decision-making and the usefulness andquality of current reporting.49
In addition, the Task Force interviewed threeorganizations that work closely with users andpreparers and reviewed several other available
49

assessments of climate-related disclosuresthat address financial impact. Finally, the Task
Force solicited input from several credit andinsurance rating agencies on how climate-related
information is taken into account within theirratings, which serve as important inputs for avariety of economic decisions.
The Task Force also held a public consultationfrom June 7 to July 18, 2021, on its proposedguidance on disclosure of climate-related
metrics, targets, and transition plans. The
consultation included questions for preparers
about their disclosure of financial impact,
including impacts on their financial performanceand financial position, and questions forusers about the usefulness of financial impact
disclosures. In total, the consultation received
over 240 survey responses and letters, with 205
respondents identifying as users or preparersof disclosure. The survey was publicly available,
and also distributed to TCFD supporters,
representatives of NGOs, and businessassociation partners, as well as being sharedthrough TCFD’s social media pages, so it isimportant to note that most survey respondents
were familiar with the Task Force’s work.

 he Task Force interviewed two individuals from one organization to obtain both a user and a preparer perspective. Therefore, while 25 disclosures
Twere reviewed, 26 user and preparer interviews were conducted.

58

The Task Force on Climate-related Financial Disclosures

Table C2

Primary Sources for Perspectives
on Financial impact
Perspective

Sources

Preparers of
disclosure• Task Force manual review of publicly available disclosures from 25 organizations• Interviews with 14 preparers in the following industries: Asset Managers, Energy,
Materials and Buildings, Technology and Media, and Transportation• 100 preparer responses to the Task Force’s consultation on its proposed guidanceon disclosure of climate-related metrics, targets, and transition plans

Users ofdisclosure• Interviews with 12 users in the following industries: Asset Managers, Asset Owners,
Banking, and Insurance• Insights from credit rating agencies

A.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures
C.
Disclosureof Financial Impact• 105 user responses to the Task Force’s consultation on its proposed guidanceon disclosure of climate-related metrics, targets, and transition plans
General• Interviews with representatives from three organizations that assist companies withpreparing and using climate-related disclosures

These primary sources provided the basis for the Task Force’s findings on disclosure of climate-related impact. However,
the Task Force also reviewed a range of data and analysis from additional sources, which are noted as appropriate.

AppendicesFigure C1Distribution of Interviewees on Financial Impact
7

EuropeNorth America

2

Users

Preparers

Asia Pacific

5

Users

2

3

Others

Preparers

13

Preparer

Users

Middle East & Africa

2Latin America

1

3

Users

Preparers

User

Users

Preparers

Others59

The Task Force on Climate-related Financial Disclosures

2. OVERVIEW OF FINANCIAL IMPACT
The financial impacts of climate-related issues
on an organization are driven by the specificclimate-related risks and opportunities to which
the organization is exposed, and its strategic
and risk management decisions on seizing
those opportunities and managing those risks(i.e., through mitigation, transfer, acceptance,
adaptation, or control). Whether an individualorganization is or may be affected financiallyby climate-related issues usually depends on:• the organization’s exposure to, and anticipatedeffects of, specific climate-related risks andopportunities;

A.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures
C.
Disclosureof Financial Impact
Appendices• the organization’s planned responses tomanage (i.e., mitigate, transfer, accept, adapt,or control) its risks or seize opportunities; and• the implications of the organization’s planned
responses on its income statement, cash flow
statement, and balance sheet.
Climate-related risks and opportunities canaffect an organization’s financial performanceor financial position. An organization’s
performance typically shows changes over time;that is, what happened in the reporting period
and how results compare with metrics reported
in previous reporting periods and with targets
set by management in previous periods. An
organization’s position reflects a point in timestocktaking; for example, the position at theend of the reporting period of the organization’s
assets, liabilities, resources, contracts, andrelationships, and how they position theorganization to execute its strategy to address
climate-related risks and opportunities.50
Organizations can then assess (1) actual
financial impacts that have alreadyoccurred as a result of climate-related risks
or opportunities, and (2) potential financial
impacts that may occur in the future due
to climate-related risks or opportunities.51
Organizations use scenario analysis tosupplement their understanding of potential
financial impacts of any climate-related risks
and opportunities, and to help inform theirstrategy. The Task Force recognizes disclosing
the potential financial impact of climatechange may not be consistent with national
financial filing requirements and encourages
organizations to make financial disclosuresin accordance with their national disclosure
requirements. If certain elements of therecommendations are incompatible withnational disclosure requirements for financial
filings, the Task Force encourages organizations
to disclose those elements in other official
company reports that are issued at least
annually, widely distributed and available toinvestors and others, and subject to internal
governance processes that are the sameor substantially similar to those used forfinancial reporting.52

50

Definitions from IFRS, Conceptual Framework, 2021.

51

 hile financial impacts may take the form of actual or potential monetary changes to an organization’s income statement, cash flow statement, orWbalance sheet, financial impacts may also have intangible effects on an organization’s enterprise value; for example, through changes in the value ofan organization’s reputation.

52

TCFD, Final Report: Recommendations of the Task Force on Climate-related Financial Disclosures, June 29, 2017.

60

The Task Force on Climate-related Financial Disclosures

Organizations may choose to describe financial
impact qualitatively or present quantitative
figures, ranges, and estimates. Qualitativedescriptions often include summaries ofanalysis conducted and directional outcomes.
For instance, an organization might report thatrevenue of a particular service is expected to be
negatively impacted under the tested scenario.
Meanwhile, quantitative figures tend to provide

more specificity. For instance, an organization
might disclose the percentage increase ofoperating costs due to a climate-related event,or the capital allocated toward a particular
adaptation project. Figure C2 shows a range ofreporting styles from qualitative descriptionsof the types of risk exposures and expected
direction of impacts to more detailed analysis bybusiness line, product, asset, or counterparty.

Figure C2

Example Range of Quantification
More qualitative

More quantitativeA.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures
C.
Disclosureof Financial Impact
AppendicesHigh-leveldescriptions ofqualitative impacts

Qualitative impacts
broken down bybusiness line or asset

High-level
quantification

Quantitative impacts
broken down bybusiness line or asset

Explanation of:Assessments ofrisk exposures andmateriality, often byclimate risk acrosssectors/portfolios

Range or quantity of
impacts and estimates atorganization level

Provides specificquantity, or quantities,
including underpinningassumptions forpotential financial
impacts• Risk exposures• Expected impacts• Management actions
to mitigate risks

VW, 2020 Sustainability report, p. 15; PIMCO, “ESG in Action: Evaluating Global Financials”; Hannon Armstrong, 2020 Form 10-K, p. 62;
Meridian Energy, Climate Change Disclosures Meridian Energy Limited FY20, p. 11

61

The Task Force on Climate-related Financial Disclosures

3. K EY THEMES OF
THE TASK FORCE’S REVIEW
Based on the Task Force’s manual review of
disclosures, consultation outcomes, interviews,
and other sources, several key themes emerged
around preparers’ current reporting practicesof financial impact. The key themes are
summarized here.
Disclosure of financial impacts remain limited.
According to the results of the consultation
shown in Figure C3, disclosure of each of financial
performance and financial position was at or
below one in five companies. Around the same

A.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures
C.
Disclosureof Financial Impact
Appendicesnumber of companies responded that they do
not plan to estimate or disclose information on
financial impact. More than 40% of respondents
identifying as preparers estimate or plan toestimate impact on financial position, but do
not necessarily plan to disclose those estimates.
Similarly, among the 25 organizations reviewed
by the Task Force, which had experience withassessing financial impact associated withclimate-related risks and opportunities, only 20(80%) disclosed qualitative information on theactual or potential impacts of climate-relatedrisks or opportunities, while 13 (52%) disclosed
quantified actual or potential impacts of climaterelated risks and opportunities. Additionally,

Figure C3

Extent of Financial Impact Disclosure
The Task Force’s consultation on its proposed guidanceon disclosure of climate-related metrics, targets, andtransition plans asked preparers about the extent towhich they were disclosing financial impacts on theirfinancial performance and financial position as well as
challenges associated with these disclosures. A total of
100 preparers, from both financial and non-financialorganizations, responded to the consultation.
A majority of respondents (64%) estimate, but do notdisclose, or do not plan to disclose impact on financial
position. Only one in eight respondents plan to disclose
information on financial performance and financial
position in the future. Explanations from consultation
respondents that do not plan to disclose financial
impact were consistent with the challenges summarized
in the section.

I’m not sure

8%

10%

No plans to estimate
or disclose

19%

16%

Planning to disclose

13%

12%

Planning to estimate, but
not necessarily disclose

28%

Currently estimate, but
do not disclose

12%

Currently disclose

20%
Financial
Performance

30%

18%
14%
Financial
PositionQ8. Which of the following climate-related information does your organization disclose? (n = 100) Base: Preparers

the Sustainability Accounting Standards Board(SASB) shared insights from their manual reviewof 159 organizations’ public disclosures with the
Task Force. For the review SASB intentionallyselected organizations that they determined arefurther along in financial impact disclosure. SASB
found that only 18 (11%) of the 159 organizations
reviewed reference financial impacts.53
Impact on financial performance is estimatedand disclosed more commonly than impact
on financial position. As seen in Figure
C3, 20% of preparers that responded to theconsultation currently disclose impact onfinancial performance, while even fewer (14%)
53

disclose impact on financial position. Of thereports reviewed by the Task Force, disclosuresof financial impact tended to focus on theamount of investment or financing deployed
toward addressing climate-related risks andopportunities. Sixteen of the 25 organizations
reviewed disclosed an amount of expenditureor capital investment deployed toward climaterelated risks or opportunities, though primarily inthe form of case studies or examples rather thanas an aggregated view of the organization’s total
climate-related expenditure or capital investment.
Seven of the 25 organizations disclosed revenues
from climate-related opportunities and one in five
disclosed cost savings.

 ASB used keyword and proximity searches of sustainability reports, annual reports, and financial filings to identify disclosures that seemed likelyS
to contain information on financial impact. SASB primarily reviewed documents issued between 2019 and 2021. Based on the results of this search,
SASB performed a manual review to identify whether the documents included disclosure of climate-related financial impact.

62

The Task Force on Climate-related Financial Disclosures

Organizations also reported financial impacts
in various other forms, such as potential
impairment values, return volatility, enterprisevalue, profit and loss (P&L), fair value of assets,
and net present value (NPV), as seen in Figure C4.

Figure C4

Example Disclosure: Equinor

A.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures

Equinor, 2020 Sustainability Report, p. 17

C.
Disclosureof Financial Impact

The disclosures reviewed primarily focusedon potential financial impacts rather thanactual financial impacts. Several preparers
interviewed by the Task Force stated that actual
financial impact is challenging to identify anddisaggregate from other non-climate events.
Meanwhile, determining potential financial
impact can be more accessible, often assessed
through leveraging scenario analysis. A reportby CDP found that 60% of financial companies
in the CDP 2020 dataset use scenario analysis
to inform their strategy, including potential
financial impact. Forty-seven percent of thesecompanies assess exposure to climate-relatedrisks and opportunities covering the majority of
their portfolio, while 29% consider climate change
when reviewing and guiding their annual budget.54
Interviewees noted that their organizations weremore likely to conduct scenario analyses thanpublicly disclose the output of such analyses.

AppendicesFinancial impact can be disclosed in a variety
of forms, most commonly through qualitativedescriptions. From the small sample of the 25
organizations reviewed, the Task Force observedthat the extent of disclosure can vary across
type of risk (physical versus transition risks) andopportunity, nature of disclosure (qualitative or

quantitative), and time horizon. Twenty of the 25
organizations reviewed disclosed financial impact
in a qualitative, directional, and aggregated form.
Quantitative disclosure of potential impacts wasless common, and most often found for forwardlooking transition risks than forward-looking
physical risks. Discussion of physical impacts was
typically in the form of qualitative descriptions
rather than quantitative information.
Financial impacts can be disclosed in various
locations. Consistent with the findings of the
Task Force’s broader annual reviews of climaterelated reporting (Section B1. TCFD-Aligned
Reporting by Public Companies), the organizations
reviewed disclosed financial impacts in a variety oflocations, including annual reports, sustainability
reports, TCFD reports, and financial filings.55
However, the type of information reported varied
based on the type of disclosure. Interviews andresearch suggest that quantified reporting ofpotential financial impact is primarily found insustainability reports, while quantified reportingof actual financial impact and qualitative reportingis more often found in annual reports. Some
organizations include qualitative informationin the notes within their financial statements
attributing certain impacts to weather or climate.

54

CDP, Running Hot — Accelerating Europe’s Path to Paris, 2021.

55

 CFD, 2019 Status Report, 2019, p. 54: “To better understand whether more companies are including climate-related information in their financial
Tfilings, the Task Force asked survey respondents that identified as preparers where they disclosed this information for fiscal years 2016, 2017, and2018. Sustainability reports continue to be the dominant location of climate-related financial disclosures; however, preparers increasingly include
such information in their financial filings, annual reports, and integrated reports.”

63

The Task Force on Climate-related Financial Disclosures

4. P
 REPARER PERSPECTIVES:
CHALLENGES AND LESSONS LEARNEDThe Task Force focused its interviews withpreparers on the challenges related to assessing
and disclosing the financial impacts of climaterelated risks and opportunities. In response to theconsultation, preparers noted several challenges
related to conducting and disclosing financial
impact analysis, as highlighted in Figure C5.

Challenges of Conducting Financial
Impact Analysis
Consistent with findings from the consultation,
preparers interviewed by the Task Force noted
numerous challenges around effectively
assessing the financial implications of theirclimate-related risks and opportunities. These
challenges occur throughout the process ofconducting financial impact analysis, starting

Figure C5

Key Challenges of Financial Impact Disclosure
A.
Initiatives
Supporting TCFD

The consultation asked preparers that found disclosure difficult to identify the key challenges of disclosing
impacts on financial position and financial performance. The two main challenges preparers identified
were both challenges in conducting analysis, namely difficulties with obtaining relevant data and selecting
and applying assessment methodologies.
Challenges in disclosing analysis was secondary, with fewer respondents identifying lack of requirements
to disclose or lack of buy-in in their organization as key challenges.56

B.
State of Climate-Related
Financial Disclosures

Challenges in
conducting analysis

Challenges
in disclosing
analysis

Challenges in
conducting analysis

Challenges
in disclosing
analysisC.
Disclosureof Financial Impact
Appendices

63%

67%

65%

64%
34%

31%

19%

17%

19%

13%

Financial Performance

16%

14%

Financial Position

Lack of internal expertise and/or resources

Selection/application of methodologies

Lack of buy-in across organization

Hard to get relevant data

Not required to disclose

Other

Q16 & Q18. In general, what are the key challenges your organization is facing (or may face) in disclosing the proposed cross-industry, climate-related
metrics and climate-related 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” to disclose in Question 12 or 14.

from organizational alignment and support
through data acquirement, attribution of risks
and opportunities, and estimation of potential
financial impacts.
Coordinating organizational support andresources. Conducting a financial impact analysis
is a multidisciplinary process and requires
access to, and coordination among, the requisite
resources and experts due to the range of ways
in which climate-related impacts can affect anorganization financially. A lack of collaboration
can make it difficult to identify and assess
56

planning assumptions and potential businesschanges in response to climate-related risks andopportunities. Coordination of efforts to conduct
this analysis can improve communication between
teams and improve the output of the analysis.
One interviewee stated that “moving the climate
conversation into financial language has helped
bridge the gap between finance and sustainability
teams by creating common language between
departments.” Another said that “new integration
between climate and financial teams has directly
influenced planning on how carbon offsets feed
into valuations.”L ack of buy-in across an organization can result in challenges in both conducting and disclosing financial impact analysis.

64

The Task Force on Climate-related Financial Disclosures

A.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures
C.
Disclosureof Financial Impact
Appendices

Obtaining and using relevant data. Due tothe complexity of estimating financial impacts,
preparers interviewed reported often using
a combination of internal performance data,
forecasts, organization-specific climate scenarios,and external data in their analysis. In addition,
preparers can also depend on disclosures fromorganizations in their supply chains or portfolios
as inputs to their financial impact analysis.
Interviewees noted that external data, particularly
from small, private suppliers or counterparties
can be difficult to obtain, with one interviewee
stating that “sourcing data from private markets isa black box.” Granular, asset-level data can also be
hard to source, which interviewees noted as one
reason analysis of physical risks and opportunities
is less common than that of transition risks
and opportunities. Meanwhile, governments,
investors, and other stakeholders may require
disclosure of different financial information acrossvarious regions, while the relevance of various
data varies with sector. Variability in metrics andfinancial impact data reported, and time horizons
considered (even within sectors), can make data
aggregation and comparability challenging.
Determining actual financial impacts.
Organizations have noted challenges withattribution of specific monetary amounts
affecting financial accounts to climate events.
This is especially difficult when a monetary
effect has multiple drivers in addition to climate(e.g., technology trends, political instability).
Financial impacts can be attributed to a broad
set of factors, and preparers interviewed noteda subjective element in organizations’ decisionsof how to attribute the impact of climate-relatedrisks and opportunities to financial accounts.57
Many jurisdictions require organizations todisclose material risks in their financial filings,
including material climate-related risks. However,some organizations interviewed describedchallenges around communicating the financial
accounting implications of climate-related risks
under financial reporting standards. For instance,
incorporating climate considerations into
impairment analysis can be challenging due todivergent time horizons between accounting andclimate reporting frameworks.

Estimating potential financial impacts. One
aspect of estimating forward-looking financial
impacts is selecting which methodologies to use(e.g., scenario analysis, forecasting, sensitivity
analysis, trend analysis). Interviewees notedthat climate-related scenario analysis can be auseful tool to assess potential financial impacts.
Scenarios help organizations understand thepotential consequences of a range of climaterelated risks and opportunities and, in turn, help
to identify the specific and relevant factors that
can impact financial results.
Nearly all interviewees reported using recognizedthird-party scenarios — such as those developedby the International Energy Agency (IEA) or
Network for Greening the Financial System (NGFS)— to evaluate financial impact. These recognized
scenarios were selected largely due to thesimplicity of using predetermined methodologies
and promoting comparability of results. Use ofthird-party scenarios also reduces the amountof scenario building expertise required within an
organization and enables resources to be directed
toward other areas. However, some interviewees
felt that this increased standardization decreased
granularity and customization of analyses.
An additional challenge in assessing potential
financial impacts is misaligned scenario andbusiness planning timeframes. Organizations
often view the climate-related risks andopportunities as occurring years beyond typicalbusiness planning time horizons, making it
difficult to determine a baseline from which
to attribute quantified financial impact.
Organizations can assess a range of financial
implications across multiple scenarios andcompare the results to their baseline forecasts.
However, baseline forecasts rarely extend longterm, as opposed to climate-related scenarios,
which often extend to 2050 and beyond.58 This
creates challenges for organizations looking toestimate scenario impacts out to 2050 relative
to their baseline forecasts. Figure C6 (p. 66)
outlines the Task Force’s view that organizations
can disclose near-term financial impacts withmore specificity and quantification than potential
impacts farther in the future.

57

 s outlined in Section A. Initiatives Supporting TCFD, a coalition of leading sustainability reporting organizations (“the alliance”) has developedA
a proposal for a prototype climate-related financial disclosure standard to help connect sustainability and accounting standards. This work
supports the IFRS’s proposal to create an International Sustainability Standards Board and IASB’s work on clarifying application of financial
accounting standards to climate-related matters. Accounting firms are also issuing guidance on how climate-related risks can affect financial
accounts and statements.

58

Intergovernmental Panel on Climate Change, Special Report on Global Warming of 1.5°C Summary for Policymakers, January 2019.

65

The Task Force on Climate-related Financial Disclosures

Figure C6

Assessing Potential Financial Impacts
As noted in the 2020 TCFD Scenario Analysis Guidance, “Translating forward-looking scenarios into meaningful
financial implications is difficult, but not impossible.”59 That report stated that “the financial effects of a company’s
strategy in a longer time horizon might be characterized in terms of broad financial pathways or broad directional
shifts in capital expenditures; as the strategy is implemented over time, capital budgets, project plans, andoperational plans provide progressively more concrete estimates of financial effects.”

A.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures
C.
Disclosureof Financial Impact

Financial Implications
Broad conceptualizationof possible financial
pathways>10 Years

Strategic Thinking
Informed by Scenarios

Financial Implications
Broad estimates of relative
shifts in capital expendituresdue to climate change

5–10 Years

Strategic Planning Informed by
Scenarios Capital Planning

Financial Implications
Projections/estimates of potential
returns on specific planned responses
to climate-related risks and opportunities

2–5 Years

Financial Implications
Estimates/actual climate change impacts
on current revenues and costs, budgets& value of assets and liabilities

Project Planning, Financial Analysesof Strategic Projects & Initiatives
Formulating Financial Strategy

0–2 Years
Formulating Operating Plans & Budgets

Present

Appendices

TCFD, TCFD Guidance on Scenario Analysis for Non-Financial Companies, Figure E2, 2020

Climate models are often designed for policyor research purposes or cannot scale to the
granularity needed for business purposes.
Interviewees noted that the use of models
built to serve alternate purposes and functions
raised concerns about the accuracy and validityof estimated impacts. A recent report on theemergence of climate-related analytics found that“many of the emerging demands for financiallymeaningful information cannot be met bycurrent climate models that were designed forother purposes.”60 However, another reportclaimed that newer models, such as Integrated
Assessment Models, offer a potential solution as
they group together multiple models and impact
chains and assume more complex and nonlinear relationships between climate variables.
The paper claimed that “the next generation

59

of models is well placed to help rationalize thecomplexities of climate science.”61
Preparers in the financial sector noted an extra
level of complexity as they make assumptions
on how organizations within their portfolio will
adapt their product mix or business models
under various scenarios. According to one
financial sector preparer, it is difficult to define
assumptions for organizations within theirportfolio because this “requires understandingof proprietary positioning and preparations ontransition risks.”
Potential business changes were seen as crucial
inputs in determining potential impacts from atransition to a low-carbon economy — but can bedifficult to source or aggregate.

Rogelj, McCollum, and Reisinger, Probabilistic cost estimates for climate change mitigation, 2013.

60

Nature, “Business risk and the emergence of climate-related analytics,“ February 8, 2021, p. 91.

61

S&P Global, Model Behavior: How Enhanced Climate Risk Analytics Can Better Serve Financial Market Participants, June 24, 2021.

66

The Task Force on Climate-related Financial Disclosures

Challenges of Disclosing Financial Impact
Beyond the complexity of determining financial
impacts, the consultation highlighted that it canbe challenging to secure buy-in to disclose theresults of financial impact analyses, particularly
where disclosure is not mandated. Preparers
interviewed stated that in order to disclose
financial impacts, approval is often required
from a range of business functions such as legal,
corporate reporting, finance, sustainability, andstrategy teams that review the organization’s
public statements. Each function may haveconcerns with disclosure for a variety of reasons,such as reliability of data, litigation of risk, andcompetitive disadvantage.

A.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures

Articulating the uncertainty of assumptions
and the quality and reliability of disclosures.
A lack of confidence in data, methodology, andassumptions is often the main driver behinddecisions not to disclose quantitative financial
impacts. Several interviewees highlighted
that even though they quantified financial
impacts internally, their organization felt more

comfortable disclosing qualitative, directional
impacts. Preparers expressed hesitancy around
quantitative disclosure of potential financial
impacts because of the many assumptions
involved, the resulting uncertainty of potential
estimates, and difficulties in clearly andeffectively articulating uncertainties.
Historical challenges in auditing the effectsof financial impacts on financial accounts
and reports have also hindered disclosure.62
However, auditors are increasingly considering
climate-related issues when reviewing financial
statements (Box C1, p. 68). An analysis conductedby the Center for Audit Quality found thatorganizations in the S&P 100 are beginning tohire public company audit firms to independently
evaluate aspects of their ESG disclosures.
Eleven percent of S&P 100 companies “provided
independent assurance on some aspect ofcompany-prepared ESG information,” while 6%
of S&P 500 companies received assurance froma public company auditing firm over some of
their ESG information.63, 64

C.
Disclosureof Financial Impact
Appendices62

See Thomas, “Auditing climate impact,” March 2021.

63

Center for Audit Quality (CAQ), The Role of ESG Reporting in Building a Sustainable World, April 22, 2021.

64

C AQ, S&P 500 and ESG Reporting, August 9, 2021.

67

The Task Force on Climate-related Financial Disclosures

Box C1
Insights on Auditors’ Work on Current Climate-Related Financial Impacts
In September 2020, investor groups representing $103 trillion in global assets under management published
an Open Letter requesting that companies, and their auditors, ensure that material climate-related risks areincorporated into IFRS financial statements (and considered in the audits thereof). Reinforcing this call, in
November 2020, the Institutional Investors Group on Climate Change (IIGCC) wrote to audit committees andlead audit partners for 36 of the EU and UK’s largest energy, materials, and transportation companies, askingthat they ensure “material climate risks associated with the transition onto a 2050 net zero pathway are fully
incorporated into the financial statements.”
To assess consideration of climate in both financial statements and audit reports, the Carbon Tracker Initiative
reviewed the 2019 and 2020 annual reports of 55 investor-selected carbon-exposed companies, including the
36 IIGCC companies. The Climate Accounting Project (CAP), a team of accounting and finance experts drawn
from the investor community and sponsored by the PRI, reviewed the 2020 annual reports of an additional 52
companies.65 Select findings derived from the report are summarized here.66
Auditors are increasingly considering climaterelated issues in their audits. In their assessmentsof audit reports, Carbon Tracker found a notable 25
percentage point increase between 2019 and 2020in the percent of auditors that appeared to consider
climate-related issues, either as separate key audit
matters or as considerations for assessing a key audit
matter.67, 68 However, none of the audit reports for the
19 U.S. energy companies indicated consideration ofclimate-related issues in either year.69

A.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures

The International Federation of Accountants defines
key audit matters as “those matters that, in theauditor’s professional judgment, were of mostsignificance in the audit of the financial statementsof the current period. Key audit matters are selectedfrom matters communicated with those charged
with governance.” 70

C.
Disclosureof Financial Impact
Appendices

Auditors are incorporating climate-related
issues into assessments of company impairment
tests. Of the 107 companies reviewed for 2020,
77% of the auditors included impairment as a key orcritical audit matter in their audit reports. Of these,
Carbon Tracker and CAP found that only 25% noted
consideration of climate change–related matterswhen discussing their assessments of impairment intheir audit reports. It is important to note that someof these companies may have considered climaterelated issues in their impairment calculations.

Consideration of Climate-Related Risks and/orCompany Commitments in Audit Reports% of Audit Reports assessed65%

No evidenceof consideration

35%

Evidenceof consideration

90%

10%
2019

2020

Inclusion of Climate-Related Issues in
Impairment Assessments in Audit Reports% of Audit Reports assessed75%

No evidenceof consideration

25%

Evidenceof consideration

2020

Carbon Tracker, “Flying blind: The glaring absence of climate risks in financial reporting”

65

T he full report describes the review’s population selection methodology, scope and approach, and review criteria.

66

 ssessments with “significant concerns” were mapped to “no evidence of consideration,” while assessments with “some concerns” or “fewA
concerns” were mapped to “evidence of consideration.”67

 or example, Carbon Tracker looked for discussions of how the auditor assessed the effects of material climate-related matters on the assumptions
Fand estimates that the company used and that would be affected by such issues.

68This finding and the associated chart is based solely off the Carbon Tracker analysis, and so has a different review population to the subsequent chart.

69

 or audits in the United States this would relate to critical audit matters or CAMs, which the Public Company Accounting Oversight Board definesF
as “any matter arising from the audit of the financial statements that was communicated or required to be communicated to the audit committee
and that: Relates to accounts or disclosures that are material to the financial statements; and Involved especially challenging, subjective, or complex
auditor judgment.” Implementation of Critical Audit Matters: The Basics, 2019.

70

IFAC, Auditor Reporting Standards Implementation: Key Audit Matters, 2017.

68

The Task Force on Climate-related Financial Disclosures

Potential litigation risk. Interviewees notedthat legal departments can be hesitant toapprove disclosure of the results of quantitative,
forward-looking financial impact assessments
due to concerns of litigation risk if suchdisclosures ultimately vary from actual future
results. As a result, organizations that releasepotential financial impact data tend to emphasizethat the disclosures are illustrative or represent
only initial or “pilot” results. However, many
jurisdictions provide “safe harbor” provisions forforward-looking information when “accompanied
by meaningful cautionary statements identifying
important factors that could cause actual results
to differ materially from those in the forwardlooking statement.” 71

A.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures
C.
Disclosureof Financial Impact
AppendicesConcerns related to competitive
disadvantage. Some organizations expressed
concern over disclosing detailed financial
impact information that might put them at
a competitive disadvantage. Organizations

indicated a willingness to disclose information
at the same level as competitors but noted that
potential competitive disadvantages could arise
both from investors accessing different levels
of information from different organizations
as well as from competitors gaining a detailed
understanding of the disclosing organization’s
operations. One interviewee reported receiving
negative media attention when they reported
more extensive coverage of Scope 3 GHG
emissions data as it created an appearance of
higher impact on financial performance relative
to competitors.
In contrast to the concerns around competitive
disadvantage, several organizations
interviewed noted benefits from leading on
disclosure (Figure C7). Increased reportingon financial impacts, as encouraged by new
guidance in the Task Force’s updated 2021
annex, should also help organizations feel
more confident in their reporting.

Figure C7

Potential Advantages of Leading on Disclosure
In regions where climate reporting is moremainstream, interviewees expressed that they had
experienced advantages in being an early moveron disclosure. While some organizations were
initially concerned about weakening their competitive
positioning by disclosing more than peers, once users
began to expect more disclosures, those who had
historically included more disclosure on financial
impact saw themselves at a competitive advantage.

In part, some preparers felt that proactively disclosing
allowed them to control the conversation aroundtheir organization and avoid speculation. Thiswas seen as particularly valuable in carbon-intensive
sectors, where investors have been concerned byspeculation regarding potential stranded assets. As
one interviewee stated, “[Our company] has a lot more
opportunities to gain by moving quickly and efficiently.
By being a first mover with the TCFD, it shows that wehave something substantial to say here. We can earn aseat at the table in determining requirements for our
future, and hopefully harmonize this space of climate
disclosure to mitigate transition risks.”

5. U
 SER PERSPECTIVES:
THE USEFULNESS OF FINANCIAL
IMPACT DISCLOSURE

Investor Assessments of Financial Impact

Climate-related information is critical forusers of climate-related information to pricethe risks and opportunities of climate change
within economic decisions. Although many
types of stakeholders use information on
financial impacts, this section focuses on
the perspectives of the investors and rating
agencies who provided their insights to the
Task Force.

71

Users incorporate a broad range of data
sources to evaluate the actual and potential
impacts of organizations’ climate-relatedrisks and opportunities. In addition to public
disclosures, many investors use third-party
aggregated data, proxy disclosures, estimatesbuilt on industry averages, media coverage,
NGO analysis, and ratings from rating agencies.
Financial organizations generally assessclimate-related risks in their portfolios in oneof two ways: assigning risks at the sector or
portfolio level using indices (a “top-down”

 asim, Corporate (Non)Disclosure of Climate Change Information, 2019. In the United States, for example, the Private Securities Litigation Reform Act
W
of 1995 shields companies from liability for certain written and oral forward-looking statements.

69

The Task Force on Climate-related Financial Disclosuresapproach) or assessing the risks of major
individual holdings and aggregating those risks
up to a portfolio- or sector-wide level (a “bottomup” approach). Investors often use a top-down
approach to assess climate-related risks in theabsence of detailed data at the organizationlevel, particularly because application of a topdown approach is seen as easier than applicationof a bottom-up approach.
Usefulness of financial impact disclosures.
Almost all users participating in the consultation
noted that disclosure of financial impacts isuseful. More than 90% of users responded that
disclosure of impact on financial performanceand financial position is very useful orA.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures
C.
Disclosureof Financial Impact
Appendicessomewhat useful as shown in Figure C8. Users
interviewed by the Task Force reported that
their organizations are increasingly seeking
preparers’ financial impact disclosures to informtheir financial decisions. For example, users
may incorporate considerations of the cost ofdecarbonization into the potential return on
short-term investments. Several users reported
integrating financial impacts into scoring tools,
such as credit risk scoring tools, to support
effective financial decision-making, including
investment and credit risk processes. To
improve the use of financial impacts in decisionmaking, many interviewees are also building
capacity around data comparability, businessassumptions, and scenario analysis.

Figure C8

How Useful Is Disclosure of Financial Impact?
As part of the 2021 consultation on its proposedguidance on disclosure of climate-related metrics,
targets, and transition plans, the Task Force asked
users how useful it would be for preparers to disclose
climate-related impact on financial performance andfinancial position. Over 90% of the 105 respondents
rated disclosure in both areas as very useful orsomewhat useful.
Disclosure of financial performance and financial
position were seen to be similarly useful, with users
indicating analogous desire to see each.

Not at all or not very useful6%

8%

Somewhat useful

21%

17%

Very useful

75%

73%

Financial
Performance

Financial
PositionQ20. Which of the proposed cross-industry, climate-related metrics and financial impacts would your organization
find useful for preparers to disclose? (n = 105) Base: Users

Sourcing financial impact information. Users
generally access financial impact information
either directly from organizations’ disclosuresor through third-party aggregated data thatincorporates disclosures, proxy estimates, andother information.
Passive investors are likely to leverage thirdparty aggregated data to inform their financial
impact assessments. Although some users
noted that information sourced from thirdparty aggregators can lack granularity, it wasoften seen as the best available option andprovided useful directional indicators for passive
investors. Despite continued challenges insourcing high-quality data, data aggregators are
identifying new pathways to quantify impact
of climate-related risks and opportunities.
Interviews with users suggest that aggregators
are providing more comprehensive tools fororganizations to measure and manage risk, an
important input as investors and regulators shift
toward alignment with a net-zero economy.

70

The Task Force on Climate-related Financial Disclosures

Active investors are more likely to go beyond
third-party aggregated data to independently
evaluate disclosures and conduct morethorough financial impact assessments.
Users who supplement third-party analyses
with disclosures reported that this practiceenhances data coverage, enables organizations
to develop a more comprehensive view of risk
profiles of organizations in their portfolios, andimproves overall verifiability, promoting internal
confidence and usage of the data to drive
business decisions.

A.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures
C.
Disclosureof Financial Impact

When users do not have access to relevant
climate-related disclosure for a particularpreparer, they tend to conduct an outside-in
assessment using sector-level assumptions orleveraging data of a comparable organization.
Users highlighted it is challenging to makeassumptions based on limited data exposing
outside-in assessment to significant uncertainty.
Additionally, preparers may be exposed to lessfavorable assumptions and outcomes comparedto the actual information that would be used if
disclosure were available.
Ultimately, users noted that more datatransparency would facilitate better integrationof preparer data into users’ financial impact
assessments and increase confidence indecision-making processes.

Appendices

Desired Improvements to Financial
Impact Disclosures
As noted in a recent IOSCO report, “There isoften a disconnect between the informationthat investee companies produce, and theinformation that asset managers consider mostdecision useful. [F]urther maturity in companies’
disclosures is needed to better capture thetangible implications of climate governance,
strategy and risk management for businessplanning, operations and financial outcomes.” 72
Users interviewed by the Task Force provided
additional detail on specific aspects of disclosurethat they would find most valuable if disclosed.
Interviewees felt that transition-related
expenditure or capital investment can serve as a
key input to users’ financial decision-making andportfolio steering. However, users expressed that
it is currently difficult to gauge how committedorganizations are to addressing climate risks
and opportunities, and anticipate evolving
regulations. A recent Climate Action 100+
(CA100+) report highlighted this information gap,
showing that only six out of 159 organizations
surveyed met partial assessment criteria for
capital allocation alignment, as shown in Figure
C9.73 Given concerns about achievability ofcommitments, many users interviewed said that
more visibility on organizations’ planned actions,through expenditure and capital investment,
would allow them to judge the credibility of thesecommitments and evaluate the benefits of thetargeted initiatives.

Figure C9CA100+ Net-Zero Company Benchmark (excerpt)

CA100+, “Net-Zero Company Benchmark”

72

IOSCO, Report on Sustainability-related Issuer Disclosures, 2021.

73

C A100+, Net-Zero Company Benchmark, 2021.

71

The Task Force on Climate-related Financial Disclosures

A.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures
C.
Disclosureof Financial Impact
Appendices

In addition to expenditure or capital investment,
users would like to see more information on
actual and potential impacts of climate-relatedrisks and opportunities on an organization’s
financial performance and position. Users notedthat information on these financial impacts
may provide insight as to how preparers arethinking about climate change from a reporting
perspective, helping inform user decisions andportfolio planning. Some users cited a desire
to see revenue data split by product. Users
interviewed stated that disclosure of these
metrics would allow them to base decisions on
preparer-disclosed data rather than analysis
conducted by users, handing preparers greater
control of their own narrative and increasingease of data sourcing for users. One interviewee
enforced this message by stating, “I would likean organization to say, ‘Here is our balance
sheet split by sector, subsector, and withinthose, these are the pockets of high risk. Hereare our emissions from each bucket based on atransition perspective.’”
Users and preparers both identified additional
engagement as an opportunity for improved
financial impact disclosure. For example, users
and preparers may engage with each otherto better understand disparities between

disclosures and analyses conducted by users.
Increased collaboration, for example, byleveraging investor calls, could strengthen theunderstanding of developments for both users
and preparers. This process would enable amore comprehensive and accurate estimation offinancial impact.
Financial Impact in Credit
and Insurance Ratings
Many investors, lenders, and insurance
underwriters rely on credit ratings as key inputs
in their financial decision-making. Therefore, theTask Force asked four large credit rating agencies
to provide details on how they incorporate
climate-related risks, opportunities, and financial
impacts into their rating processes.
All four rating agencies responded that they
include assessments of financial impacts in theirrating process, such as rising costs of energy
transition and impacts on cash flow ratios.
Box C2 provides a summary of the rating
agencies’ responses, particularly input related
to (1) sourcing information and (2) impact on
ratings. Full responses can be found in Appendix
5: Rating Agency Incorporations of ClimateRelated Information.

Box C2
Summaries of Rating Agency Responses
In alphabetical order; see Appendix for full responses.
AM Best’s approach to assessing climate risks and opportunities includes consideration ofan (re)insurer’s climate exposures, their strategic business plans, and how these exposures
can positively or negatively affect their creditworthiness over the short-to-medium term.
For climate risks, AM Best explicitly considers the impact from physical, transition, andliability climate-related risks. AM Best’s evaluation considers the financial impact of climate
risks and opportunities across the building block assessments, namely balance sheet
strength, operating performance, business profile, and enterprise risk management.
AM Best assesses the financial impact of climate risks and opportunities for all (re)insurers,
emphasizing a forward-looking approach based on an understanding of how (re)insurers
adapt their profile to manage climate risks and capitalize on opportunities.
Sourcing Information
Financial disclosure on climate risks are becoming a mainstay in many insurance markets
with an increasing number of (re)insurers using the TCFD framework. AM Best uses
both public and nonpublic relevant information gathered through engagement withmanagement, company sustainability reports, regulatory reporting submissions, and othersources as part of the credit rating analysis.
Impact on Ratings
Approximately 9% of AM Best’s global rating movements have been as a result of ESG
factors, of which climate risks have been a key driver. Negative rating actions have mainly
affected companies that have concentrated exposures to weather-related events, whereby
exposures have fallen outside of risk appetite, and affected capital positions and earnings
profiles. Conversely, some (re)insurers have demonstrated positive rating actions mainly
through strengthened governance practices, driven by enhanced modeling techniques,
exposure management, and protection against peak risks.
72

The Task Force on Climate-related Financial Disclosures
Fitch provides a comprehensive, systematic approach to communicating how climaterelated risks and opportunities influence ratings at a sector, issuer, and transactionlevel. Analysts incorporate climate-related risks, which could affect credit profiles, into
their forecasts, including increased focus on carbon-transition policies and lower longterm oil price assumptions, partially due to increasing transition risk.
Sourcing Information
Over 150,000 ESG Relevance Scores (ESG.RS) have been applied by Fitch’s 1,500 global
credit analysts to over 11,000 issuers or transactions since their launch in 2019. ESG.
RS track the credit relevance of environmental factors including GHG emissions,energy management, and exposure to environmental impacts, firmly embedding thetransparent display of climate risk impacts within ratings reports and research.
Impact on Ratings
Fitch has noted examples of ratings pressures driven by rising costs of energy
transition (for example, electric vehicles in the auto sector) and physical risks of climatechange (for example, mortgage-backed securities with high concentration in areas ofheightened natural disaster risk and underinsurance). Conversely, the ESG.RS include
issuers that received positive ratings uplift from supply of renewable energy in markets
with supportive regulatory environments (climate-related opportunities).

A.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures
C.
Disclosureof Financial Impact
Appendices

Fitch recognizes the emerging, latent nature of many climate-related risks, as well as
widespread gaps in disclosure. Fitch’s global ESG research team undertakes detailed
thematic research on climate and ESG themes at macro, sector, and entity/transactionlevels to better understand the credit implications of these emerging risks acrossdiverse areas such as industrial decarbonization, deforestation, and sustainabilitylinked debt.
Assessment of Climate Risk
Moody’s Investor Services assesses the credit considerations of ESG risks including
climate change, alongside all other relevant credit drivers and mitigating factors, in thedetermination of its credit ratings. Moody’s has introduced ESG issuer profile scoresand ESG credit impact scores as well as Carbon Transition Assessment scores to assist
in the assessment of these risks and their impact on credit ratings. Moody’s observes
that the credit impact of physical climate risk is generally negative, to varying degrees.
The credit impact of carbon transition can be positive or negative, depending upon
whether the entity’s risk profile is improved or weakened by its operating environment’s
transition to a low-carbon economy.
Quantitative & Qualitative Analysis
Moody’s Investor Services’ transition and physical risk scores are informed byquantitative metrics, including some forward-looking data and projections. The finalscores are determined by analysts who also qualitatively consider the materiality oftransition and physical risk for an entity and information about that entity’s businessstrategy and operating environment. This augmentation of data and exercise of
judgment is necessary because, at present, TCFD-inspired and similar disclosures are
generally not sufficiently detailed, forward-looking, and consistent on a global — oreven on an industry — basis to support a mechanistic, quantitative scoring approach.
Impact on Ratings
Thirteen percent of Moody’s private sector ratings actions in 2020 cited environmental
issues, up from 5% in 2019. Carbon transition risk was the most frequently citedenvironmental consideration in these rating actions. Most rating actions citing carbon
transition came from sectors Moody’s had previously identified in their environmental
heat map as facing high or very high exposure to that risk, such as oil and gas and steel.
S&P Global Ratings incorporates environmental, social, and governance (ESG) credit factors,
including climate-related credit factors, into its credit analysis across all sectors if S&P
believes the factors are material and relevant to S&P’s opinions of creditworthiness. As
one of the key ESG credit factors, the potential effect of climate-related issues depends on
S&P’s opinion of how much they affect the capacity and willingness of an obligor to meet its
financial commitments.

Continued on next page73

The Task Force on Climate-related Financial Disclosures

Impact on Ratings
Climate-related disclosure information may affect credit rating analysis in many ways.
S&P’s credit analysis may incorporate climate-related short-, medium-, and long-term
information — both qualitative and financial. Qualitative information predominantly
influences S&P’s country and industry assessments as well as S&P’s evaluation ofmanagement and governance in case of non-financial corporates.
Forward-looking financial information provided by issuers that is material to S&P’s
analysis may not only affect an entity’s key metrics, such as the cash flow/leverage ratiosof a non-financial corporate, but also S&P’s assessment of an entity’s competitive position
among its peers.
Sourcing Information
S&P Global Ratings incorporates climate-related credit factors into its credit analysis if S&P
believes the factors are material and relevant to S&P’s opinions of creditworthiness.

A.
Initiatives
Supporting TCFD

The main challenges when trying to evaluate climate-related credit factors can beinsufficient disclosure generally and — where there is disclosure — inconsistent disclosure
across peers. Furthermore, S&P’s assessment could also be enhanced by an interconnectedreporting on these matters, linking the qualitative disclosures with their historic andpotential future financial impact. S&P believes that such a link would support telling acomprehensive story about the entity’s exposure to climate-related risks and opportunities
and management’s actions in response to those.

B.
State of Climate-Related
Financial Disclosures
C.
Disclosureof Financial Impact
Appendices74

Appendices

The Task Force on Climate-related Financial Disclosures

Appendix 1: Task Force Members
Chairman and Vice Chairs
Michael Bloomberg
Chair
Founder
Bloomberg LP and Bloomberg Philanthropies

A.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures
C.
Disclosureof Financial Impact
Appendices

Denise Pavarina
Vice Chair
Senior Advisor
Aggrego Consultores

Graeme Pitkethly
Vice Chair
Chief Financial Officer
Unilever

Yeo Lian Sim
Vice Chair
Special Adviser, Diversity
Singapore Exchange

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

Members
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 Presidentof 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

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
Blackrock76The Task Force on Climate-related Financial Disclosures

Martin 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
Special Advisor
A.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures
C.
Disclosureof Financial Impact
Appendices

Russell Picot
Chair, Trustee Board
HSBC Bank (UK) Pension Scheme
Former Group Chief Accounting Officer,
HSBC
Deputy Chair, Chair of Investment Committee
USS
Secretariat
Mary Schapiro
Vice Chair for Global Public Policy andSpecial Advisor to the Founder and Chair
Bloomberg LP
Mara Childress
Director, Global Public Policy
Bloomberg LP

Curtis Ravenel
TCFD Secretariat
Jeff Stehm
TCFD Secretariat
Stacy Coleman
TCFD Secretariat

Observers
Kathy Huynh
Secretariat Member
Financial Stability Board

Rupert Thorne
Deputy to the Secretary General
Financial Stability Board

This report was developed with the support of Oliver Wyman’s John Colas, Alban Pyanet, Ilya Khaykin,
Kaja Pergar, Becky Swanson, Kais Ben Halim, and Megan Dombrowski.

77

The Task Force on Climate-related Financial Disclosures

Appendix 2: AI Review Methodology
As summarized in Section B1. TCFD-Aligned
Reporting by Public Companies, the Task
Force developed an approach using artificial
intelligence (AI) technology to review thealignment of information in fiscal year 2018,2019, and 2020 public reports with the TCFD
recommendations. This appendix describes the
Task Force’s process for selecting the companies
included in the review, the types of documents
reviewed, and the AI review methodology.

1. C
 OMPANIES INCLUDEDIN THE REVIEWA.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures
C.
Disclosureof Financial Impact
Appendices

The AI methodology was used to review financial
filings, annual reports, integrated reports, andsustainability reports of 1,651 large companies
from 69 countries in eight industries. Six of theeight industries align with groups highlighted
in the Task Force’s 2017 report — Banking;Insurance; Energy; Materials and Buildings;
Transportation; and Agriculture, Food, andForest Products. Two additional industries fromthe 2020 status report were also included —Technology and Media, and Consumer Goods.
In order to select the companies to include in
the AI review, the Task Force started with the
population of companies used in the 2020 status
report AI review, which was selected using thefollowing methodology:• Identified universe of public companies —companies in the eight selected industries
are further classified into 29 sub-industries,
listed in Figure A2-1 (p. 79). The sub-industries
are loosely based on the Global Industry
Classification Standard sub-sectors andindustries.
• Removed subsidiaries to avoid double countingof companies. Identified companies thatshared the same industry and ultimate parent74

for capital structure purposes and retained thecompany with the largest annual revenue (fornon-financial industries) or the largest total
assets (for financial industries). We followed
this approach to avoid, as much as possible,
removing companies that published annual
reports separate from their parent company.
• Removed smaller companies from the
population to maintain focus on larger
companies. We retained banks and insurancecompanies with total assets of at least$10 billion and $1 billion, respectively, andcompanies in the six non-financial industries
with annual revenue of $1 billion or more. This
resulted in 4,446 total companies; and thebreakdown by industry and sub-industry is
shown in Figure A2-1 (p. 79).
• Removed companies that did not have reports
available in English.
• Removed companies that did not have annual
reports available for review in all three
years. This was done to ensure a consistent
population of companies and comparable
reporting across all three years. Importantly,
not all 2020 disclosures were available by thedate that documents were extracted for review(June 16, 2021).
This methodology resulted in a review
population of 1,701 companies for the 2020
status report.74
For this year’s status report, the Task Forcestarted with the 1,701 companies used in the2020 status report. However, 50 companies
from the 2020 review population no longer exist
as individual entities or did not have reports
available in English for fiscal year 2020. Removing
those 50 companies from the review population
resulted in a final population of 1,651 publiccompanies for the Task Force’s 2021 AI review.

TCFD, 2020 Status Report, September 22, 2020.

78

The Task Force on Climate-related Financial Disclosures

Figure A2-1

Industry and Sub-Industry of Companies
Selected for Review

A.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures
C.
Disclosureof Financial Impact
AppendicesIndustries

Sub-Industries

Banking
608 Companies• Regional Banks

Insurance
246 Companies• Multiline Insurance• Life and Health Insurance• Property and Casualty Insurance• Reinsurance

Energy483 Companies• Oil and Gas• Utilities

Transportation
456 Companies• Air Freight• Rail Transportation• Passenger Air Transportation• Trucking Services• Maritime Transportation• Automobiles• Chemicals• Metals and Mining• Construction Materials• Real Estate Management
and Development

Materials and Buildings
1,580 Companies• Investment and AssetManagement Firms• Large, Diversified Banks• Coal• Capital Goods
Agriculture, Food, and Forest
325 Companies• Beverages• Packaged Foods and Meats• Agriculture• Paper and Forest ProductsTechnology and Media
292 Companies• Technology Hardwareand Equipment• Interactive Media and Services

Consumer Goods
456 Companies• Consumer Retailing• Textiles and Apparel

Total: 4,446 Companies

2. DOCUMENTS REVIEWEDThe Task Force focused primarily on companies’
fiscal year 2018, 2019, and 2020 financial
filings, annual reports, integrated reports,and sustainability reports. These documents
were identified using the Bloomberg Terminal,and other relevant documents provided in the
Terminal were reviewed as available. The Task
Force only selected documents available in
English and documents were categorized by theyear of reporting.
• Financial Filings (including 10-Ks, 20-Fs,
annual report and accounts, and registration
documents): Reports that describe companies’
audited financial results under the corporate,compliance, or securities laws of the jurisdictions
where they operate. While reporting
requirements differ internationally, financial
filings generally contain financial statements

and other information such as governancestatements and management commentary.
• Annual or Integrated Reports: Reportsthat describe companies’ activities for thepreceding year (annual reports) or thebroader range of measures that contribute tocompanies’ long-term value and the role theyplay in society (integrated reports).
• Sustainability Reports (including corporatesocial responsibility and environmental,social, and governance reports): Reportsthat describe companies’ impact on society,often addressing environmental, social, andgovernance issues.
• Other Relevant Documents: Documents
available in the Bloomberg Terminal that areassociated with companies’ annual reportingor sustainability.

79The Task Force on Climate-related Financial Disclosures

3. AI-BASED REVIEW METHODOLOGYThe Task Force relied on a different AI technology
approach to review company reports forthe 2021 status report than the AI used inprevious years, as another AI provider offered
to undertake the review of climate-related
disclosures for the Task Force in 2021.75

A.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures
C.
Disclosureof Financial Impact
Appendices

The goal of the AI-based review was toautomatically identify TCFD-aligned disclosuresin financial filings and other company reports.
Designing an automated AI system to review
TCFD alignment entailed several challenges andnovel solutions to address these challenges. In
particular, the language aligning with different
TCFD recommended disclosures could be foundanywhere in multiple documents of significant
length. Another challenge was that the language
and semantics used to describe a particular
disclosure could differ across countries, sectors,
and even between companies in the same
sector. To help address these challenges, theAI system utilized language models that canmathematically represent whole sentences
and paragraphs and are able to capture andunderstand meaning in context.76
To begin the review process, text passages werefirst extracted from the various documents
available for review in PDF format. An AI model
incorporating computer vision techniques wasused in this step to properly identify paragraphboundaries. Correct paragraph segmentation
was important in order to allow the language
models used in subsequent steps to correctly
capture the context of sentences.
The paragraph segmentation technique
identified thousands of paragraph passages
across the various available documents for eachcompany. To filter these passages down to only
the ones relevant to climate-related disclosures,a language model–based information retrieval
technique was then used to retrieve, score, andrank the passages in order of their relevance toa particular disclosure. The top ranked relevant
passages were then selected as relevant to aparticular disclosure. Finally, a language model
fine-tuned for climate disclosure classification
was used to determine if an entity’s reportaligned with each of the 11 TCFD disclosures.

These language models used for classification
were based on the Bidirectional Encoder
Representations from Transformers (BERT)
architecture.77 BERT is a deep learning–based
natural language processing model trained ona massive text document corpus that encodes
text into mathematical representations while
taking into account the context for a given word.
For example, while other techniques might
have encoded the word “running” in the twosentences, “The car is running great,” and “Thecar is running out of gas,” in the same way, BERT
would take the context into account and provide
different representations for “running” in thetwo sentences. This means that BERT (and othersimilar architectures) based models can utilize
the contextual meaning of words while making
the classification decision.
The AI models discussed were trained andfine-tuned using text examples that subject
matter experts from V.E., part of Moody’s
ESG Solutions, had labeled as being aligned to
the recommended disclosures. To review thereports, the team used a common standard thatinvolved narrowing down each recommended
disclosure to a single yes-no question (Figure
A2-2, p. 81). To increase the efficiency of thelabeling effort, Active Learning (AL) techniques
were utilized.78 AL is an iterative machine-driven
annotation cycle for data labeling, where the AI
model identifies ambiguous unlabeled samples
that are most informative and provides themost useful information for improving its model
performance. This is very useful in resourceconstrained environments where labeled data
is limited, and sufficient number of humanexperts are not available to provide labels onlarge data volumes (which the AI deep learningmodels need to improve performance). A
batch-based AL process in which the AI models
iteratively identified relevant batches of
unlabeled informative data samples for humanannotation from large document collections
was used. This resulted in more efficient use ofannotator effort and enabled the AI models toperform successfully on a limited number ofannotated examples.

75

T he Task Force is grateful for the previous years of review provided by PwC as well as for the review in 2021 provided by Moody’s.

76Devlin, et al., “Bert: Pre-training of deep bidirectional transformers for language understanding,” 2018.

77

Liu, et al., “Roberta: A robustly optimized bert pretraining approach,” 2019.

78

Settles, “Active learning literature survey,” 2009.

80

The Task Force on Climate-related Financial Disclosures

Figure A2-2

AI Review Questions#

Question

Recommended Disclosure

1

Does the company describe the board’s or a board committee's oversightof climate-related risks or opportunities?

Governance a)2

Does the company describe management’s or a management committee'srole in assessing and managing climate-related risks or opportunities?

Governance b)

3

Does the company describe the climate-related risks or opportunities
it has identified?

Strategy a)

4

Does the company describe the impact of climate-related risks andopportunities on its businesses, strategy, or financial planning?

Strategy b)

A.
Initiatives
Supporting TCFD

5

Does the company describe the resilience of its strategy, taking into
consideration different climate-related scenarios, including a 2°C
or lower scenario?

Strategy c)

B.
State of Climate-Related
Financial Disclosures

6

Does the company describe its processes for identifying and/or assessing
climate-related risks?

Risk Management a)

7

Does the company describe its processes for managing climate-related risks?

Risk Management b)

8Does the company describe how processes for identifying, assessing, andmanaging climate-related risks are integrated into overall risk management?

Risk Management c)

9Does the company disclose the metrics it uses to assess climate-relatedrisks or opportunities?

Metrics and Targets a)

10

Does the company disclose Scope 1, Scope 2, and, if appropriate, Scope 3
greenhouse gas emissions?

Metrics and Targets b)

11

Does the company describe the targets it uses to manage climate-relatedrisks or opportunities?

Metrics and Targets c)

C.
Disclosureof Financial Impact
Appendices

The AI pipeline was implemented and run
on mlfabricTM, a custom-designed modular,
reusable, cloud-based platform developed at
Moody’s that operationalizes deep learning andmachine learning models, allowing users to
deploy and reuse AI models and AI workflows

at scale. The disclosure leveraged the mlfabricTM
models-as-a-service platform to scale theprocessing of greater than 10,000 documents(financial filings and other documents) for theselected population of companies to produce
the final results.

81

The Task Force on Climate-related Financial Disclosures

Performance Validation
The performance of the AI pipeline was assessed
at a company level. A company was marked ashaving a TCFD-aligned disclosure if at least one
passage was categorized as a positive result for
the questions in Figure A2-2 (p. 81) across anyof its documents. If a company was predicted
to be complying with a particular disclosureand human annotators were also in agreement(based on annotated data) with that judgment,
then that particular example was marked ascorrectly classified. The metric used to assess the
final performance of the AI pipeline was the F1
Score.79
F1 Scores for the 11 recommended disclosures
are presented in Figure A2-3.

A.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures

OutcomeFigure A2-3
Paragraph-level model performance
Recommended Disclosure

F1-Score

Governance a)

0.958

Governance b)

0.815

Strategy a)

0.857

Strategy b)

0.906

Strategy c)

0.820

Risk Management a)

0.900

Risk Management b)

0.882

Risk Management c)

0.897

Metrics and Targets a)

0.955

Metrics and Targets b)

0.957

Metrics and Targets c)

0.857

The AI pipeline was applied to the excerpts fromthe reports of the 1,651 companies, and theresults were aggregated for analysis by the 11
recommended disclosures, the eight industries,
the size of the companies, and the regions inwhich the companies were located.

C.
Disclosureof Financial Impact
Appendices79

In binary classification, precision measures the number of correct positive predictions out of the total number of positive predictions while
recall measures the number of correct positive predictions out of the actual number of examples that were correct. The F1 Score is the
harmonic mean of precision and recall. It is an indicator of the classification accuracy of a model and is commonly used in machine learning
applications to judge performance.

82

The Task Force on Climate-related Financial Disclosures

Appendix 3: AI Review Results by Industry
As summarized in Section B.1. TCFD-Aligned
Reporting by Public Companies, the Task
Force developed an approach using artificial
intelligence (AI) technology to review thealignment of information included in fiscal year
2018, 2019, and 2020 public reports with the
TCFD recommendations. This appendix provides

the results of the AI review for each of the eightindustries included in the review — Banking;Insurance; Energy; Materials and Buildings;
Transportation; Agriculture, Food, and Forest
Products; Technology and Media; andConsumer Goods.

A.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures
C.
Disclosureof Financial Impact
Appendices

83

The Task Force on Climate-related Financial Disclosures

Bankingalong with materials and buildings companies,
had the largest increase in disclosure of Strategya) — climate-related risks and opportunities —between 2018 and 2020 at 20 percentage points.
The most significant increases in disclosure forthis industry over the three-year period were forStrategy a) as mentioned, and Risk Managementc) at 19 percentage points, showing that banks
are increasingly disclosing their analysis ofclimate-related risks and opportunities as well as
integrating processes for identifying, assessing,and managing climate-related risks into their overallrisk management activities. However, in 2020,
banks had the lowest percentage of disclosureof any industry for the Metrics and Targets c)recommended disclosure, climate-related targets.

The AI technology reviewed reports from 282
banks in three sub-industries: investment andasset management banks, large and diversifiedbanks, and regional banks. The 282 banks had a
median asset size of nearly $66 billion in assets
and a maximum size of $5.1 trillion in assets. The AI
review results for banks are shown in Figure A3-1.
For seven of the 11 recommended disclosures,the percentage of banks disclosing relevant
information was lower than the average across allcompanies reviewed. However, banks’ disclosureof information in alignment with the TCFD
recommendations increased from 2018 to 2020
for all the recommended disclosures, and banks,
Figure A3-1
A.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures

Banking Review Results
Recommendation

Recommended
Disclosure

Pt. Change
2018–2020

Governancea) Board Oversight

16

C.
Disclosureof Financial Impact
Appendices

Strategy

Risk Management

Metrics
and Targets

Percent of Companies That Disclose
Information Aligned with TCFD
Recommended Disclosures
2018
2019
2020

6%
14%
22%

b) Management’s Role

8

2018
2019
2020

a) Risks andOpportunities

20

2018
2019
2020

25%
33%

b) Impact on
Organization

15

2018
2019
2020

20%
26%
35%

c) Resilience of Strategy

10

2018
2019
2020

a) Risk ID andAssessment Processes

15

2018
2019
2020

9%
10%
17%

45%

5%
8%
15%
18%
22%
33%

b) R
 isk Management
Processes

18

2018
2019
2020

14%
19%

c) Integration into
Overall Risk
Management

19

2018
2019
2020

10%
17%

a) Climate-Related
Metrics

12b) S cope 1, 2, 3
GHG Emissionsc) Climate-Related
Targets

32%

29%

2018
2019
2020

23%

16

2018
2019
2020

21%
25%
27%

7

2018
2019
2020
0%

32%
35%

15%
15%
22%
20%

40%

60%

80%

100%

Legend: Percentage of companies that disclosed information aligned with TCFD recommended disclosures in 2020

84

The Task Force on Climate-related Financial Disclosures

Insurance
The AI technology reviewed reports from 132
insurance companies in four categories: multiline
insurance, property and casualty insurance,
reinsurance, and life and health insurance. The
insurance companies reviewed had a median sizeof around $29 billion in assets and a maximum
size of $1.3 trillion in assets. The AI review results
for these companies are shown in Figure A3-2.
Based on 2020 reporting, the 132 insurancecompanies most often disclosed informationaligned with the TCFD recommended
disclosure Strategy a), climate-related risks andopportunities. The percentage of disclosurein 2020 was greater than or equal to the 2020
average across all companies for seven of
the 11 recommended disclosures. Insurancecompanies also exceeded the 2020 average by
ten or more percentage points for Governancea), Risk Management b), and Risk Managementc). In addition, the insurance companies had
higher than average percentage point increases
for seven of the 11 recommended disclosures
between 2018 and 2020. In 2020, the reviewed
insurance companies also had the highest
disclosure percentage for four of the 11
recommended disclosures: Governance a), Risk
Management a), Risk Management b), and Risk
Management c).

Figure A3-2
A.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures

Insurance Review Results
Recommendation

Recommended
Disclosure

Pt. Change
2018–2020

Governancea) Board Oversight

22

C.
Disclosureof Financial Impact
Appendicesb) Management’s Role

Strategy

Risk Management

Metrics
and Targets

10

Percent of Companies That Disclose
Information Aligned with TCFD
Recommended Disclosures
2018
2019
2020

13%
17%

2018
2019
2020

13%
13%

35%

23%

a) Risks andOpportunities

17

2018
2019
2020

35%
39%

b) Impact on
Organization

8

2018
2019
2020

28%
32%
36%

c) Resilience of Strategy

10

2018
2019
2020

a) Risk ID andAssessment Processes

10

52%

8%
9%
18%
27%
26%

2018
2019
2020

37%

b) R
 isk Management
Processes

16

2018
2019
2020

c) Integration into
Overall Risk
Management

17

2018
2019
2020

a) Climate-Related
Metrics

6

2018
2019
2020

b) S
 cope 1, 2, 3
GHG Emissions

10

2018
2019
2020

20%
20%

2018
2019
2020

18%
18%
27%

c) Climate-Related
Targets

9

0%

31%
30%
47%
22%
25%
39%
26%
27%
32%

30%

20%

40%

60%

80%

100%

Legend: Percentage of companies that disclosed information aligned with TCFD recommended disclosures in 2020

85

The Task Force on Climate-related Financial Disclosures

EnergyThe AI technology reviewed reports from 267
energy companies in three categories: oil andgas, coal, and utilities. The energy companies had
a median revenue of $4.6 billion and a maximumof $181 billion in annual revenue.
The AI review results for these companies areshown in Figure A3-3. In 2020, energy companies
had the highest percentage of disclosure forany industry for two recommended disclosures:
Strategy a), describing the climate-related risks
and opportunities the company has identified
over the short, medium, and long term, andStrategy c), describing the resilience of thecompany’s strategy, taking into considerationdifferent climate-related scenarios, including a
2°C or lower scenario. Energy companies also
disclosed TCFD-aligned information at a rate
greater than or equal to the 2020 average acrossall companies for ten of the 11 recommended
disclosures. The percentage of energy companies
reporting information aligned with Metrics andTargets c), describing the targets used by thecompany to manage climate-related risks andopportunities and performance against targets,
more than doubled between 2018 and 2020.

Figure A3-3
A.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures

Energy Review Results
Recommendation

Pt. Change
2018–2020

Governancea) Board Oversight

14

2018
2019
2020

b) Management’s Role

9

2018
2019
2020

a) Risks andOpportunities

13

2018
2019
2020

b) Impact on
Organization

14

2018
2019
2020

c) Resilience of Strategy

17

2018
2019
2020

a) Risk ID andAssessment Processes

8

2018
2019
2020

22%
29%
30%

b) R
 isk Management
Processes

14

2018
2019
2020

18%
25%
32%

c) Integration into
Overall Risk
Management

11

2018
2019
2020

20%
28%
31%

a) Climate-Related
Metrics

8

2018
2019
2020

b) S
 cope 1, 2, 3
GHG Emissions

14c) Climate-Related
Targets

21

C.
Disclosureof Financial Impact
Appendices

Percent of Companies That Disclose
Information Aligned with TCFD
Recommended Disclosures

Recommended
Disclosure

Strategy

Risk Management

Metrics
and Targets

20%
26%
34%
11%
15%
20%
54%
61%
67%
33%
42%
47%
11%
14%
18%

36%
45%
44%

2018
2019
2020

22%

2018
2019
2020

20%
27%

0%

33%
36%

41%
20%

40%

60%

80%

100%

Legend: Percentage of companies that disclosed information aligned with TCFD recommended disclosures in 2020

86

The Task Force on Climate-related Financial Disclosures

Transportation
The AI technology reviewed reports from 158
transportation companies in six categories: air
freight, automobiles, maritime transportation,passenger air transportation, rail transportation,and trucking services. The transportationcompanies had a median size of $4.3 billion in
annual revenue and a maximum of $254 billion in
annual revenue.
The AI review results are shown in Figure A3-4.
In 2020, the 158 transportation companies mostoften disclosed information aligned with Strategya) and Metrics and Targets a) at 49% and 41%,
respectively, while the lowest percentage of
disclosure related to Strategy c) at 6%. Between
2018 and 2020, the largest increase in disclosure(17 percentage points) was for Governance a),
the board’s oversight of climate-related risks
and opportunities. For the same period, thesmallest increase in disclosure percentage (three
percentage points) was in Strategy c) and Metrics
and Targets b). Overall, transportation companies
disclosed TCFD-aligned information below the2020 average across all companies for all of the
11 recommended disclosures.

Figure A3-4
A.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures

Transportation Review Results
Recommendation

Recommended
Disclosure

Pt. Change
2018–2020

Governancea) Board Oversight

17

C.
Disclosureof Financial Impact
Appendicesb) Management’s Role

Strategy

Risk Management

Metrics
and Targets

11

Percent of Companies That Disclose
Information Aligned with TCFD
Recommended Disclosures
2018
2019
2020
2018
2019
2020

6%
11%
23%
4%
9%
15%

a) Risks andOpportunities

10

2018
2019
2020

b) Impact on
Organization

13

2018
2019
2020

c) Resilience of Strategy

3

2018
2019
2020

a) Risk ID andAssessment Processes

14

2018
2019
2020

11%
15%
11%
13%
22%

39%
37%
49%
23%
27%
36%
3%
2%
6%

25%

b) R
 isk Management
Processes

11

2018
2019
2020

c) Integration into
Overall Risk
Management

11

2018
2019
2020

a) Climate-Related
Metrics

7

2018
2019
2020

b) S
 cope 1, 2, 3
GHG Emissions

3

2018
2019
2020

25%
30%
28%

c) Climate-Related
Targets

8

2018
2019
2020

20%
27%
28%

0%

7%
13%
18%
34%
38%
41%

20%

40%

60%

80%

100%

Legend: Percentage of companies that disclosed information aligned with TCFD recommended disclosures in 2020

87

The Task Force on Climate-related Financial Disclosures

Materials and Buildings
The AI technology reviewed reports from 404
materials and buildings companies in fivecategories: capital goods, chemicals, construction
materials, metals and mining, and real estate
management and development. The materials
and buildings companies had a median size of$5.7 billion in annual revenue with a maximum
size of $142 billion in annual revenue.
The AI review results for these companies areshown in Figure A3-5. In 2020 reporting, thematerials and buildings companies most often
disclosed information aligned with the TCFD
recommended disclosures Strategy a) and Metrics

and Targets a). The percentage of materials andbuildings companies disclosing information
was greater than that for companies in any
other industry for four of the 11 recommended
disclosures in 2020. In addition, the materials andbuildings companies disclosed at the highest rate
among all other companies for all three years, for
the Metrics and Targets a) disclosure, metrics used
to assess climate-related risks and opportunities.
The materials and buildings companies also
disclosed at a percentage that was three times
higher for 2020 as for 2018 for three of therecommended disclosures — Governance a),Strategy c), and Risk Management c).

Figure A3-5
A.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures

Materials and Buildings Review Results
Recommendation

Recommended
Disclosure

Pt. Change
2018–2020

Governancea) Board Oversight

18

C.
Disclosureof Financial Impact
Appendicesb) Management’s Role

Strategy

Metrics
and Targets

2018
2019
2020

9%
13%

2018
2019
2020

9%
13%

a) Risks andOpportunities

20

2018
2019
2020

b) Impact on
Organization

21

2018
2019
2020

c) Resilience of Strategy

Risk Management

14

Percent of Companies That Disclose
Information Aligned with TCFD
Recommended Disclosuresa) Risk ID andAssessment Processes

11

17

2018
2019
2020

27%

23%
41%
45%
61%
28%
33%
49%
3%
4%
14%
16%
20%

2018
2019
2020

33%

b) R
 isk Management
Processes

19

2018
2019
2020

12%
15%

c) Integration into
Overall Risk
Management

20

2018
2019
2020

9%

a) Climate-Related
Metrics

4

2018
2019
2020

b) S
 cope 1, 2, 3
GHG Emissions

18

2018
2019
2020

c) Climate-Related
Targets

18

31%
16%
29%
44%
51%
58%
34%
42%
52%
25%
31%

2018
2019
2020
0%

43%
20%

40%

60%

80%

100%

Legend: Percentage of companies that disclosed information aligned with TCFD recommended disclosures in 202088

The Task Force on Climate-related Financial Disclosures

Agriculture, Food, and Forest Products
The AI technology reviewed reports from 142
agriculture, food, and forest products companies
in four categories: beverages, packaged foods
and meats, agriculture, and paper and forest
products. The agriculture, food, and forest
products companies had a median size of $3.9
billion in annual revenue and a maximum size of$90 billion in annual revenue.
The AI review results for these companies areshown in Figure A3-6. In 2020, agriculture, food,and forest products companies most frequently
disclosed information on Strategy a), climaterelated risks and opportunities, and Metrics andTargets a), the metrics used by companies toassess climate-related risks and opportunities.
The percentage of agriculture, food, and forest
products companies disclosing in 2020 was lower
than 2020 average across all companies for eightof the 11 recommended disclosures. However, in2020 the companies in this group also disclosed
at a rate that was at least 10 percentage points
higher than the rate in 2018, for six of the 11
recommended disclosures.

Figure A3-6
A.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures

Agriculture, Food, and Forest Products Review Results
Recommendation

Recommended
Disclosure

Pt. Change
2018–2020

Governancea) Board Oversight

13

C.
Disclosureof Financial Impact
Appendices

Strategy

Risk Management

Metrics
and Targets

Percent of Companies That Disclose
Information Aligned with TCFD
Recommended Disclosures
2018
2019
2020

4%
7%
17%

b) Management’s Role

4

2018
2019
2020

a) Risks andOpportunities

6

2018
2019
2020

b) Impact on
Organization

4

2018
2019
2020

c) Resilience of Strategy

10

2018
2019
2020

a) Risk ID andAssessment Processes

15

2018
2019
2020

13%
20%
28%

b) R
 isk Management
Processes

15

2018
2019
2020

10%
15%

c) Integration into
Overall Risk
Management

19

2018
2019
2020

a) Climate-Related
Metrics

7

2018
2019
2020

b) S
 cope 1, 2, 3
GHG Emissions

4

2018
2019
2020

c) Climate-Related
Targets

11

2018
2019
2020
0%

9%
8%
13%
44%
42%
50%
27%
23%
31%
1%
5%
11%

25%
4%
12%
23%
41%
42%
48%
35%
33%
39%
30%
29%
41%
20%

40%

60%

80%

100%

Legend: Percentage of companies that disclosed information aligned with TCFD recommended disclosures in 2020

89

The Task Force on Climate-related Financial Disclosures

Technology and Media

disclosure of the industries reviewed for eightout of the 11 recommended disclosures. The
percentages of disclosure for these companies
was lower than the average percentagesof disclosure, across all the companies in
the industries reviewed, for all of the 11
recommended disclosures. For two of therecommended disclosures — Risk Managementb) and Metrics and Targets a) — there was anincrease of only one percentage point between
2018 and 2020. However, in 2020, over a quarterof technology and media companies disclosed
for four out of the 11 recommended disclosures.

The AI technology reviewed reports from
106 technology and media companies in two
categories: interactive media and services andtechnology hardware and equipment. The
technology and media companies had a medianannual revenue of $3.0 billion and a maximum
annual revenue of $275 billion.
The AI review results for these companies areshown in Figure A3-7. In 2020, technology andmedia companies had the lowest levels of

Figure A3-7
A.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures

Technology and Media Review Results
Recommendation

Pt. Change
2018–2020

Governancea) Board Oversight6

2018 0%2019 1%6%2020b) Management’s Role

5

2018
2019
2020

a) Risks andOpportunities

3

2018
2019
2020

22%
28%
25%

b) Impact on
Organization

13

2018
2019
2020

15%
22%
28%

c) Resilience of Strategy

4

2018
2019
2020

a) Risk ID andAssessment Processes

4

2018
2019
2020

8%
6%
12%

b) R
 isk Management
Processes

1

2018
2019
2020

7%
4%
8%

c) Integration into
Overall Risk
Management

9

2018
2019
2020

2%
6%
11%

a) Climate-Related
Metrics

1

2018
2019
2020

25%
22%
26%

b) S
 cope 1, 2, 3
GHG Emissions

2

2018
2019
2020

22%
19%
24%

c) Climate-Related
Targets

12

2018
2019
2020

C.
Disclosureof Financial Impact
Appendices

Percent of Companies That Disclose
Information Aligned with TCFD
Recommended Disclosures

Recommended
Disclosure

Strategy

Risk Management

Metrics
and Targets

0%

3%
5%
8%

3%
5%
7%

13%
9%
25%
20%

40%

60%

80%

100%

Legend: Percentage of companies that disclosed information aligned with TCFD recommended disclosures in 2020

90

The Task Force on Climate-related Financial Disclosures

Consumer Goods

was lower than the 2020 average across allcompanies for nine of the 11 recommended
disclosures. The highest percentage of disclosurefor companies in the consumer goods group wasfor climate-related metrics (Metrics and Targetsa), which was 42% in 2020. The percentage of the
160 consumer goods companies disclosing TCFDaligned information increased between 2018 and2020 by greater than five percentage points for
all recommended disclosures.

The AI technology reviewed reports from 160
consumer goods companies in two categories:
consumer retailing and textiles and apparel.
The consumer goods companies had a medianannual revenue of more than $6 billion and amaximum annual revenue of $518 billion.
The AI review results for these companies areshown in Figure A3-8. Overall, the percentagesof disclosure for the consumer goods companies

Figure A3-8
A.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures

Consumer Goods Review Results
Recommendation

Recommended
Disclosure

Pt. Change
2018–2020

Governancea) Board Oversight

16

C.
Disclosureof Financial Impact
Appendicesb) Management’s Role

Strategy

Risk Management

Metrics
and Targets

10

Percent of Companies That Disclose
Information Aligned with TCFD
Recommended Disclosures
2018
2019
2020

4%
6%

2018
2019
2020

6%
9%

a) Risks andOpportunities

7

2018
2019
2020

b) Impact on
Organization

15

2018
2019
2020

c) Resilience of Strategy

7

2018
2019
2020

a) Risk ID andAssessment Processes

11

2018
2019
2020

20%

16%
34%
36%
41%
21%
20%
26%
1%
5%
8%
12%
13%
23%

b) R
 isk Management
Processes

15

2018
2019
2020

c) Integration into
Overall Risk
Management

16

2018
2019
2020

a) Climate-Related
Metrics

11

2018
2019
2020

31%
38%
42%

b) S
 cope 1, 2, 3
GHG Emissions

9

2018
2019
2020

28%
30%
37%

c) Climate-Related
Targets

16

2018
2019
2020
0%

6%
9%
21%
2%
9%
18%

19%
25%
35%
20%

40%

60%

80%

100%

Legend: Percentage of companies that disclosed information aligned with TCFD recommended disclosures in 202091

The Task Force on Climate-related Financial Disclosures

Appendix 4: PRI Indicators Mapped
to TCFD Recommended Disclosures
A s described in Section B2. TCFD-Aligned
Reporting by Asset Managers and Owners, theTask Force used PRI’s climate-related indicators togain insight on asset managers’ and asset owners’

TCFD-aligned reporting. This appendix provides
the Task Force’s mapping of PRI indicators to its
11 recommended disclosures where possible asshown in Figure A4-1.

Figure A4-1

2021 PRI Indicators Mapped to TCFD
Recommended Disclosures
A.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures

TCFD
Recommendation

TCFD Recommended
Disclosure

Governancea) D escribe the board’s oversight of climate-related risks and opportunities.

b) D escribe management’s role in assessing and managing climate-relatedrisks and opportunities.80
Strategya) D escribe the climate-related risks and opportunities the organization
has identified over the short, medium, and long term.

PRI
Indicator(s)ISP 28A-G

ISP 29A-D
ISP 30A-G
ISP 31A-G

C.
Disclosureof Financial Impactb) D escribe the impact of climate-related risks and opportunities
on the organization’s business, strategy, and financial planning.

ISP 32

Appendicesc) D escribe the resilience of the organization’s strategy, taking into
consideration different climate-related scenarios, including a 2°C
or lower scenario.81

ISP 33.1a) D escribe the organization’s processes for identifying and assessing
climate-related risks.

ISP 34A-E

Risk Managementb) D escribe the organization’s processes for managing climate-related risks.

c) D escribe how processes for identifying, assessing, and managing climaterelated risks are integrated into the organization’s overall risk management.
Metrics andTargetsa) D isclose the metrics used by the organization to assess climate-related risks
and opportunities in line with its strategy and risk management processes.

ISP 36A-G

ISP 36A-G
ISP 38.1
ISP 39.1b) D isclose Scope 1, Scope 2, and, if appropriate, Scope 3 greenhouse gas (GHG)
emissions, and the related risks.

ISP 38.1c) D escribe the targets used by the organization to manage climate-relatedrisks and opportunities and performance against targets.

ISP 37.1

80

 RI excluded certain “free text” responses in the aggregate data provided for the indicators mapped to Governance b) and Risk Management a), whichP
may understate the level of TCFD-aligned reporting to the PRI.

81

 or Strategy c), the Task Force reviewed PRI indicators relative to its supplemental guidance for asset owners, which asks these organizations toFconsider providing a discussion of how climate-related scenarios are used, such as to inform investments in specific assets. The PRI indicator mostclosely aligned with Strategy c) asks signatories to “[d]escribe how climate scenario analysis is used to test the resilience of your organization’s
investment strategy and inform investments in specific asset classes.” The Task Force notes the PRI indicator could be interpreted as requesting
information beyond that described in the supplemental guidance.

92

The Task Force on Climate-related Financial Disclosures

Appendix 5: Rating Agency Incorporationsof Climate-Related Information
As part of its work on the usefulness of climaterelated financial impact information, the Task
Force asked several credit rating agencies toprovide a short submission on how climate risks
and opportunities factor into their credit ratingprocesses. These submissions are provided infull, in alphabetical order.

A.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures
C.
Disclosureof Financial Impact
Appendices

The physical hazards caused by climate risks
can drive significant socioeconomic disruptions.
Rising average temperatures are contributing to ahigher frequency and severity of weather-related
losses across the world. While many (re)insurers
focus on protection against climate risks, there
are also opportunities as a material protection
gap exists, new insurance opportunities emerge
in the transition to a low-carbon economy, andchanges in customer preferences and lifestyles
create new product prospects. The (re)insurance
sector serves to naturally identify and manage
the financial consequences of climate risks andenhance the resilience of affected communities.
AM Best’s approach to assessing climate risks
and opportunities includes consideration of an(re)insurer’s climate exposures, their strategic
business plans, and how these exposures
can positively or negatively affect their
creditworthiness over the short-to-medium
term. For climate risks, AM Best explicitly
considers the impact from physical, transition,and liability climate-related risks. AM Best’s
evaluation considers the financial impact ofclimate risks and opportunities across thebuilding block assessments, namely balance
sheet strength, operating performance, businessprofile, and enterprise risk management.
AM Best assesses the financial impact of climate
risks and opportunities for all (re)insurers,
emphasizing a forward-looking approachbased on an understanding of how (re)insurers
adapt their profile to manage climate risks andcapitalize on opportunities.
Weather-related events are considered a severe
threat to the balance sheet strength of insurers
because of the often significant, rapid, andunexpected impact of such losses. AM Best
expects (re)insurers accepting climate-relatedrisks to be able to demonstrate that theycan effectively manage these risks, including
consideration for climate trends and for theincreased severity and frequency of weatherrelated events — and have the financial
wherewithal to withstand potential losses.
The asset profile of (re)insurance is also
important. Any asset held by (re)insurers that
may be affected by climate risk, such as coastal
properties at risk of flooding due to rising sea
levels, or assets exposed to weather-related
catastrophe events, may need to be assessedto understand the value of these assets, or if
any write-downs are applicable. Any mitigating
measures that protect the asset value would alsoneed to be considered.
The financial impact of climate risks will vary
between companies depending on their mix
of business and geographic exposures. Theirbusiness profile and the level of reinsurance
protection will dictate underlying volatility infinancial metrics and their ability to produce
profitable returns. These elements are boundtogether based on the company’s risk appetite
and risk practices adopted to manage climate risk.
Risk management plays an important rolein the company’s ability to effectively model
weather-related events and factor climate
risk into the pricing and modeling of risks. A
key area for consideration is the availability of
appropriate data and analytical tools to accurately
model weather-related events. Overexposure,inadequate modeling, or insufficient protection
arising from an event are concerns if losses falloutside of AM Best, or company expectations.
For life insurers, climate risk can change thepattern and resistance to infectious disease,which could affect future mortality and morbidity
rates. In underwriting such risks, it is importantto understand changes to the operating
environment stemming from climate risks.
Financial disclosure on climate risks are
becoming a mainstay in many insurance markets
with an increasing number of (re)insurers using
the TCFD framework. AM Best uses both public
and nonpublic relevant information gathered
through engagement with management,
company sustainability reports, regulatory
reporting submissions, and other sources as partof the credit rating analysis.

93

The Task Force on Climate-related Financial Disclosures

Since March 2020, AM Best has been disclosing
whether environmental, social, and governance(ESG) factors have been key to any positiveor negative change in ratings (Figure A5-1).
Approximately 9% of AM Best’s global rating
movements have been as a result of ESG factors,of which climate risk has been a key driver.
Negative rating actions have been mainly oncompanies that have concentrated exposures
to weather-related events, whereby exposures
have fallen outside of risk appetite, and affected
capital positions and earnings profiles. These

losses have highlighted weaknesses in managing
climate risks, and their inability to model andmitigate these risks. Conversely, some (re)insurers
have demonstrated positive rating actions mainly
through strengthened governance practices,driven by enhanced modeling techniques,
exposure management, and protection against
peak risks. AM Best’s expectation is that the risk
management of climate risk is important andthat (re)insurers need to step up engagement on
climate risks and opportunities, according to aframework, such as that shown in Figure A5-2.

Figure A5-1

Key Drivers of Global Rating Movements
A.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures
C.
Disclosureof Financial Impact
AppendicesFigure A5-2

Assessing Climate Risks Through the Rating Process

ClimateRisks• Stability of earnings• Limited impact of
stranded assets• Adequate modellingand pricing• New climate products
earnings accretive• Underwriting profile
diversified andinsulated against
climate risks• Development of new
products• Clearly defined policy
wording and contracts• Climate risks factored
into ERM approach• Ability to absorb
climate stress tests• Ability to model
weather-related risks• High visibility ofclimate reporting,(financial disclosures,
regulatory reporting)• Board oversight

Balance Sheet
Strength

Operating
Performance

Business Profile

Enterprise Risk
Management• Rapid decline in capital
position – overexposure, unexpected
losses• Inadequate protection
against peak exposures• High volatility /sensitivity to climate
risks• Exposure to stranded
assets•V olatile earnings• Issues with stranded
assets•C limate risks notconsidered inunderwriting model•U nexpected losses•A dverse mortality andmorbidity rates fromresistant disease•U nderwriting orinvestment profile
concentrated andexposed to climate risk•U ncertain or indirect
exposures to climate
risks

•B
 reaches of appetiteand tolerance•S tress test failures• Inadequate risk
modelling – poor data
quality• Non-disclosure in
financial reporting• Inadequate protection
against peak exposure,or aggregation of risks• Capital position
withstand shocks• Protection against
peak exposures andaggregation of losses• Low volatility /sensitivity to climate
risk• Diversification in
investment portfolio

IssuerCreditRatingNote: Some content was reformatted in order to fit the page.

94

The Task Force on Climate-related Financial Disclosures

is of heightened importance under the new
EU Sustainable Finance Disclosure Regulation.
Financial materiality of climate issues can becompared across a peer group, distinguishingentities who are actively managing climate risks
from those whose exposure affects their credit
rating, in line with the “strategic planning risk
management” at the core of the TCFD. Changes to
ESG.RS over time capture the dynamic nature ofclimate risks.

Incorporation of climate risks
and opportunities into rating process
Fitch provides a comprehensive, systematic
approach to communicating how climate
risks and opportunities influence ratings at asector, issuer, and transaction level. Analysts
incorporate climate-related risks that could affectcredit profiles into their forecasts, including
increased focus on carbon-transition policies andlower long-term oil price assumptions, partially
due to increasing transition risk.

A.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures
C.
Disclosureof Financial Impact
Appendices

Fitch has seen several notable examples ofratings pressures driven by rising costs of energy
transition (for example, electric vehicles in theauto sector) and physical risks of climate change(for example, mortgage-backed securities withhigh concentration in areas of heightened natural
disaster risk and underinsurance). Currently,
38% of Fitch’s Autos sector and 20% of its EMEA
Utilities sector issuers for instance have an ESG
score of 4 or 5 for GHG emissions, reflecting thefactor as a key rating driver of the credit rating.
Conversely, the ESG.RS also include issuers who
have seen a positive ratings uplift from supplyof renewable energy in markets with supportive
regulatory environments, in line with the“opportunities” metric of the TCFD.

Over 150,000 ESG Relevance Scores (ESG.RS)
have been applied by Fitch’s 1,500 global credit
analysts to over 11,000 issuers or transactions
since their launch in 2019. ESG.RS tracks thecredit relevance of environmental factors
including GHG emissions, energy management,
and exposure to environmental impacts, firmly
embedding the transparent display of climate
risk impacts within ratings reports and research(as shown in Figure A5-3). Fitch Ratings’ ESG.
RS provide a tool to prioritize research andengagement around the most financially material
factors for rated entities or transactions, which

Figure A5-3

ESG Scoring Definitions
ESG Scoring Definitions
LOWEST RELEVANCE
1
Irrelevant to theentity rating andirrelevant to thesector.

NEUTRAL
2

Irrelevant to
the entity rating
but relevant tothe sector.

CREDIT-RELEVANT TO ISSUER

3

4

5

Minimally relevant
to rating, either
very low impact or
actively managed ina way that results
in no impact on theentity rating.

Relevant to rating,
not a key rating
driver but has an
impact on the ratingin combination withother factors.

Highly relevant,a key rating
driver that has asignificant impact
on the rating on an
individual basis.

Note: Some content was reformatted in order to fit the page.

95

The Task Force on Climate-related Financial Disclosures

Filling information gaps:
Fitch recognizes the emerging, latent natureof many climate risks, as well as widespread
gaps in disclosure. Its global ESG research teamundertakes detailed thematic research on
climate and ESG themes at macro, sector, andentity/transaction levels to better understand thecredit implications of these emerging risks acrossdiverse areas such as industrial decarbonization,

deforestation, and sustainability-linked debt
(Figure A5-4). Targeted use of third-party,
asset-level data sources such as CRU82 deepens
issuer commentary and benchmark climate risk
management. In addition, analysts’ interaction
with management boards as part of the ratingsprocess enables an ongoing discussion andunderstanding of how different entities are
impacted and are managing climate risks, which
better inform ESG.RS for each issuer.

Figure A5-4

Understanding ESG Credit Implications
SHORT TO MEDIUM-TERM

A.
Initiatives
Supporting TCFD

MEDIUM TO LONG-TERM

ESG Relevance Scores

ESG Research

ESG Vulnerability Scores

B.
State of Climate-Related
Financial Disclosures• ESG Relevance Scores
articulate the level of influencean environmental, social or
governance issue has had on acredit rating decision.

• Credit risk analysis based ona credible downside credit
risk scenario whereby climatechange is limited to 2 degrees ofwarming by 2050.

C.
Disclosureof Financial Impact• ESG Relevance Scores areforward looking and based on
the base case forecasts for thecredit ratings of entities andtransactions.

• Dedicated global ESG Researchteam based across threecontinents who cover thematicand cross-sector ESG credit
risk, as well as supporting credit
analysts with themed issuer andtransaction specific research.

• Fitch Ratings’ credit analysts
systematically evaluate
ESG credit considerations
incorporated in its ratings
methodologies.

Appendices• The scores cover Environmental,
Social, and Governance (E, S and
G, respectively) risks under atransparent sector based, crossasset, global framework.

• Thematic reports analysing
ESG themes at a macro-level,a sector level, and an entity/ transaction level with anemphasis on how they are likely
to affect sectors and entities
from a credit perspective.
• The ESG Research teamprioritize emerging ESG themesthat are most material andlikely to disrupt industries andbusiness models.

• Sector based templates provide
clear articulation of credit
relevant ESG risks.
Sector / Entity / Transaction

Sector / Thematic• Vulnerability scores provide
a time series comparative risk
score of credit risk vulnerability
for sectors, entities within asector, and debt instruments.
• T ime profiled scores at regularintervals from 2025 to 2050.
Unique granular view forinvestors looking to manage
longer term ESG credit risks.
• Based on the UN-backed
Principles for Responsible
Investment’s Inevitable Policy
Response scenario, refinedand adjusted for the in-depth
sector knowledge of Fitch’s
rating analysts.

Sector / Entity / Transaction

Note: Some content was reformatted in order to fit the page.

Regulatory landscape
In line with the TCFD recommendations, Fitch
uses scenario analysis and stress testing
methodologies to explore the implicationsof a changing regulatory landscape. Its ESG
Vulnerability Scores (ESG.VS) use a plausible
policy stress scenario (the UN PRI’s Inevitable
Policy Response) as a starting point to test
exposure to long-term regulatory tightening
in response to climate change. Fitch thenoverlays this with analysts’ detailed knowledge
2of sectoral and regional drivers of supply anddemand, as well as issuer-specific fundamentals
such as cost recovery mechanisms, local
policy environments, cost competitivenessand asset age, as well as climate risk strategy.
This enables Fitch to form a long-term view(2025–2050) of the relative exposure ofissuers to changing regulation and financial
materiality of the changes, in line with the TCFD
recommendations. This view is expounded in its
ESG Vulnerability Score sector reports.

CRU refers to CRU Group, a strategic partner of Fitch.

96The Task Force on Climate-related Financial Disclosures

Assessment of climate risk
Moody’s Investors Service assesses the credit
considerations of ESG risks including climatechange, alongside all other relevant credit drivers
and mitigating factors, in the determinationof its credit ratings — see Figure A5-5. It has
introduced ESG issuer profile scores and ESG
credit impact scores as well as Carbon Transition
Assessment scores to assist in the assessmentof these risks and their impact on credit ratings.

Categories of environmental risk scored include
exposure to climate risk, including transitionand physical risks. In assessing transition
risk for issuers in the most impacted sectors,
Moody’s also produces Carbon Transition
Assessments to further inform their assessmentof the transition risk facing that entity. Theyobserve that the credit impact of physicalclimate risk is generally negative, to varying
degrees. The credit impact of carbon transition
can be positive or negative, depending upon
whether the entity’s risk profile is improved
or weakened by its operating environment’s
transition to a low-carbon economy.

Figure A5-5
A.
Initiatives
Supporting TCFD

Summary of How Climate Risk Scores
Contribute to Credit Ratings

B.
State of Climate-Related
Financial Disclosures

SECTOR-SPECIFIC METHODOLOGIES
Methodology Scorecard / Model

C.
Disclosureof Financial Impact

ESG CREDIT
IMPACT SCORE

Other Considerations

CIS-1 Positive
Neutral-to-AppendicesCIS-2 low

CREDITRATINGESG CROSS-SECTOR METHODOLOGY

CIS-3 Moderately
Negative
HighlyCIS-4 Negative

ISSUER PROFILE SCORES
Environmental IPS

E-1
E-2

E-5
E-3

E-4

Social IPS

S-1
S-2

S-5
S-3

S-4

• Carbon Transition• Customer relations• Physical climate risks• Human capital• Water management• Demographic andsocietal trends• Waste and pollution• Natural Capital• Health and safety• Responsible production

Governance IPS

G-1
G-2

Very Highly

CIS-5 Negative

G-5
G-3

G-4

• Financial strategy & risk
management• Management credibility& track record• Organizational
structure• Compliance & reporting• Board structure,policies & proceduresNote: Some content was reformatted in order to fit the page.

97

The Task Force on Climate-related Financial Disclosures

Quantitative and qualitative analysis
Moody’s Investors Service’s transition andphysical risk scores are informed by quantitative
metrics, including some forward-looking dataand projections. The final scores are determinedby analysts who also qualitatively consider themateriality of transition and physical risk foran entity and information about that entity’sbusiness strategy and operating environment.
This augmentation of data and exercise of
judgment is necessary because, at present,
TCFD-inspired and similar disclosures are
generally not sufficiently detailed, forwardlooking, or consistent on a global — or even on
an industry — basis to support a mechanistic,
quantitative scoring approach.

A.
Initiatives
Supporting TCFD

p. 98 Figurep.
A5-6
98A5-6
Figure A5-6
FigureB.
State of Climate-Related
Financial Disclosures
C.
Disclosureof Financial Impact
Appendices

An example of the ESG scores for a U.S. utility
is shown in Figure A5-6 along with the narrative
explaining the positioning. While the sector has
high exposure to transition risk, the strategy of
the company is mitigating the risk to moderate
exposure for this particular issuer. The
geographic location of this utility’s operations
results in the physical risk exposure being high.
Environmental risk is the most significant of thethree ESG areas for the company resulting in the
E-4 IPS; however, in the context of the overall
credit analysis, ESG issues are only having alimited negative impact on the current credit
rating outcome, as indicated by the CIS-3 score.

Example of Moody’s Investors Service ESG Scores
Covering Climate Risk
ESG Credit Impact & Issuer Profile Scores: Southern Company (The)ESG Methodology

ESG Credit Impact &ESG
IssuerCreditProfileImpactScores:& IssuerSouthern
ProfileCompany
Scores:(The)Southern Company (The)ESG Credit Impact Score
27 MAY 2021

ESG Credit Impact Score
27 MAY 2021

CIS-3

CIS-3

Moderately Negative

Moderately Negative

NEGATIVE
IMPACT

ESG Issuer Profile Scores
27 MAY 2021

ENVIRONMENTAL

ENVIRONMENTAL
SOCIAL

SOCIAL
GOVERNANCE

GOVERNANCE

E-4

E-4
S-3

S-3
G-3

G-3

For an issuer scored CIS-3 (Moderately
Foran
an issuer
issuer
Negative),scored
its
CIS-3
ESG
(Moderately
attributes
areNegative),overallconsidered
its ESG attributesasare overall considered asForscoredCIS-3(Moderately
Negative),
having a limited impact on the current
having a
rating,limitedwith
impactgreateron potential
the current
forrating,future withnegative
greater
impactpotential
over for future negative impact overESG
are overall
considered
as havingtime. The negative influence ofits
time.
the
overall
Theattributes
negative
ESG attributes
influence
onofthetheratingoverall
is moreESG attributes
pronounced
on the rating is more pronounced
Sector Risk
compared to an issuer scoredaCIS-2.
comparedto an issuer
scoredCIS-2.rating, with greater
limited impact
on thecurrent
Level
ESG Factor

HighlyModerately
Negative
Negative

Sector Risk
Level

ESG Factor

Moderately
Moderately
Negative
Negative

Issuer Score

Environmental FactorsEnvironmental Factors

Southern’s ESG Credit Impact
Southern’s
Score isESG
moderately
Credit Impact
negative
Score(CIS-3).
is moderately
Its ESG negative (CIS-3). Its ESG
High
High
attributes are considered toattributes
be havingare
anconsidered
overall limited
to be
impacthavingonan
theoverall
current
limited impact on thecurrent Physical Climate Risks
rating, with potential for future
rating,negativewithpotential
impactoverforfuturetime.
Southern’s
negative
impactCIS-3
overreflects
time. Southern’s CIS-3 reflectsSouthern’s ESG Credit Impact Score is moderately
high environmental risk, along
highwithenvironmental
moderately
risk,
negativealongsocial
witharemoderately
andgovernancenegativesocial and governancenegative(CIS-3).
Its ESG
attributes
consideredtoHigh
Carbon Transition Highrisks.
berisks.
having an overall limited impact on the current rating,with potential for future negative impact over time.

NEGATIVEEXPOSURE

Note: Some content was reformatted in order to fit the page.

Moderately Negative

Issuer Score
POSITIVEEXPOSURE

Physical4 Climate Risks

4

Carbon3 Transition

3

Water ManagementModerate Water
Southern’s high environmental
Southern’srisk (E-4highissuerenvironmental
profile score)risklargely(E-4 issuer
reflects
profilehigh score) largelyModerate
reflects high
2 Management
Southern’s
CIS-3
reflects
high environmental
risk,
along
physical climate risks resulting
physicalfrom climate
hurricanes,risksstorms
resultingandfromtornados
hurricanes,
acrossstorms
its
and tornados across its
with moderately negative social and governance risks.
core service territory in the coreSoutheast
serviceUS.
territory
The company
in the Southeast
has moderately
US. Thenegative
company has moderately negative
Moderate Natural Capital
Moderate Natural
2 Capital
carbon transition risk reflecting
carbonits long-termtransition
carbonrisk reflecting
emissionslong-term
reductionplan emissions reduction plan
Southern’shigh environmental
riskits(E-4issuer carbon
profileincluding renewable energy
including
growthalongrenewablewith ahighenergyreliance
growthon fossil
along
fuels,
withincluding
a reliance on fossil fuels, including
score)
largely
reflects
physicalclimaterisks
substantial natural gas andsubstantial
decliningcoal.
naturalThegascompany’s
anddecliningcoal/oilcoal.
andThenuclearcompany’s coal/oil andHighnuclearWaste and Pollution
High
Waste
3 and Pollution
resultingfromhurricanes,
stormsand tornados
acrossgeneration fleets includesitsmoderately
generation
negative
fleetsincludesrisks
formoderately
waste management
negative
andfor waste management andcore service
territory
in theSoutheast
US. Therisks
pollution.
pollution.
company
has moderately negative carbon transition
Environmental Profile Score Environmental
Profile Score
E-4

risk reflecting its long-term carbon emissions reduction
plan including renewable energy growth along with areliance on fossil fuels, including substantial natural gas
and declining coal. The company’s coal/oil and nuclear
generation fleets includes moderately negative risks for
waste management and pollution.

ESG Methodolo

ESG Issuer Profile Scores
27 MAY 2021

POSITIVE NEGATIVEPOSITIVE
IMPACT
IMPACT
IMPACT
Highly Negative

potential for future negative impact over time. The
negative influence of the overall ESG attributes on
the rating is more pronounced compared to an issuer
scored CIS-2.

ESG Methodology

NEGATIVEEXPOSURE

2
2
3
E-4

5

98

POSITIVEEXPOSUR

The Task Force on Climate-related Financial Disclosures

Impact on ratings
Thirteen percent of private sector ratings actionsin 2020 cited environmental issues, up from 5%
in 2019. Carbon transition risk was the mostfrequently cited environmental consideration inthese ratings actions. Most ratings actions citing
carbon transition came from sectors Moody’s
had previously identified in its environmental
heat map as facing high or very high exposure tothat risk, such as oil and gas and steel.

How does climate-related financial information
affect S&P Global’s issuer credit ratings?

A.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures
C.
Disclosureof Financial Impact
Appendices

S&P Global Ratings incorporates environmental,social, and governance (ESG) credit factors,
including climate-related credit factors, into its
credit analysis across all sectors if it believes thefactors are material and relevant to its opinionsof creditworthiness. As one of the key ESG credit
factors, the potential effect of climate-related
issues depends on how much they affect thecapacity and willingness of an obligor to meet its
financial commitments.
Climate-related disclosure information may
affect credit rating analysis in many ways. 83
S&P Global’s credit analysis may incorporate
climate-related short-, medium-, and long-term
information — both qualitative and financial.
Qualitative information predominantly influences
its country and industry assessments as well as
its evaluation of management and governance incase of non-financial corporates.
Forward-looking financial information provided
by issuers that is material to S&P Global’s analysis
may not only affect an entity’s key metrics suchas the cash flow/leverage ratios of a non-financial
corporate, but also its assessment of an entity’scompetitive position among its peers.
• Transition and physical risks may materially
increase operating costs — such as greenhousegas and other pollution emissions compliancecosts and health and safety costs — or reduce
asset values and revenues through decreased
capacity or changing consumer preferences.
These risks and the mitigation of the risks may
also significantly affect the entities expenditureor capital investment plans and thereby its
future cash flow generation capability. Investing
to avail of climate-related opportunities may
weaken cash flow during the investment phase
but boost the entity’s forecast earnings andcash flow generation once the investment
breaks even.
83• S&P Global would factor in such climate-related
forecast information provided by companies
into cash flow/leverage assessments for
non-financial corporates, if there is sufficientcertainty and visibility, and if the information
is sufficiently material to the analysis ofcreditworthiness, which, in turn, can directly
affect the assessment of financial risk profile.
The revenue strength and its diversification,
cost structures, and volatility of profitability
are also key factors in competitive positionassessments for non-financial corporates.
For banks and insurance companies, S&P Global
analyzes capital and earnings as well as risk
exposures and considers financial data suchas expected loan losses or annual catastrophe
losses. Similarly, structural characteristics suchas revenue diversification and any strategicchanges to these characteristics are incorporated
into assessments of their business risk profiles.
S&P Global incorporates in its analysis forwardlooking financial information for periods overwhich it considers it has a sufficiently clear viewof an entity’s potential financial performance.
Nevertheless, it considers whether thecreditworthiness is sustainable beyond suchforecast period. If S&P Global has a high degreeof visibility about factors that may crystallize
beyond the typical forecast period, even if lesscertain, it could factor those into its ratings in its
qualitative considerations.
Furthermore, comparable, standardized, nonfinancial data, such as historical scope 1, 2,
and 3 GHG emissions metrics, and an entity’s
strategic targets as regards factors such as future
emissions and emissions intensity, as well as
physical risk mitigation goals, are also beneficial
in improving the information that is used toundertake credit analysis. However, for suchdata to facilitate deeper dialogue and analysisof both transition and physical risks, it needs
to be prepared on a consistent basis, globallycomparable, widespread in use, and reliable.
Information gap
S&P Global Ratings incorporates climate-related
credit factors into its credit analysis if it believes
the factors are material and relevant to its
opinions of creditworthiness.
The main challenges when trying to evaluate
climate-related credit factors can be insufficient
disclosure generally and — where there isdisclosure — inconsistent disclosure acrosspeers. Furthermore, this assessment could also
be enhanced by interconnected reporting onthese matters, linking the qualitative disclosures

S&P Global, S&P Global Ratings Proposes Additional Transparency On ESG Factors As Drivers Of Credit Ratings, 2021.

99

The Task Force on Climate-related Financial Disclosureswith their historic and potential future financial
impact. Such links would support telling acomprehensive story about the entity’s exposure
to climate-related risks and opportunities andmanagement’s actions in response to those.
Regulatory landscapeA.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures
C.
Disclosureof Financial Impact

S&P Global continues to monitor the changes
in climate-related policy landscape andevaluate any potential impact on all obligor’s
creditworthiness. As new information emerges,
S&P Global captures and incorporates risks
and opportunities through the surveillance andreview of existing and future information that isrelevant to the issuer. Future rating actions may
be influenced by climate-related policy changes
that impose new costs or create opportunities
for rated entities, such as greenhouse gas
emissions pricing or taxes, natural condition
adaptation requirements, or regulated safety
management costs.
A rating can reflect the potential effects of agiven policy action once there is high certainty
that a policy will be implemented (for example,
if a related law or regulatory requirement has
been, or is close to being, adopted). This makes

its potential credit implications more predictable.
In some cases, S&P Global could also consider
the potential credit implications of such actions,and possibly incorporate these into its ratings
analysis, where a future policy change is agreed
and highly certain to be implemented but witha delay.
Regulatory changes do not always have toalter underlying economics; they may simply
provide additional insights into an entity’s
existing climate-related risks or opportunities.
The introduction of mandatory disclosure
frameworks — such as the TCFD by the UKfrom 2022 — may improve how credit analysis
incorporates climate-related information byoffering comparable and consistent disclosuresby companies.
With the evolving policy and legal framework on
climate-related disclosures, a risk may become
more visible or more certain, or the obligor may
take action to mitigate the risk that reduces or
eliminates its risk exposure. Insignificant risks
or strengths that are not currently consideredmaterial to the obligor’s creditworthiness canlater become material.

Appendices100

The Task Force on Climate-related Financial Disclosures

Appendix 6: Glossary and Abbreviations
ANNUAL OR INTEGRATED REPORTS referto reports that describe companies’ activities
for the preceding year (annual reports) or thebroader range of measures that contribute tocompanies’ long-term value and the role theyplay in society (integrated reports).
BOARD OF DIRECTORS (OR BOARD) refers
to a body of elected or appointed members
who jointly oversee the activities of a company
or organization. Some countries use a two-tiered
system where “board” refers to the “supervisoryboard” while “key executives” refers to the“management board.”84

A.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures
C.
Disclosureof Financial Impact
Appendices

CARBON FOOTPRINTING is the calculation of
the total greenhouse gas emissions caused byan individual, event, organization, service, or
product, expressed as carbon dioxide equivalent.
CARBON INTENSITY relates to a company’s
physical carbon performance and describes theextent to which its business activities are based oncarbon usage for a defined Scope and fiscal year.
FINANCIAL FILINGS refer to the annual reporting
packages in which companies are required todeliver their audited financial results under the
corporate, compliance, or securities laws of thejurisdictions in which they operate. While reporting
requirements differ internationally, financial filings
generally contain financial statements and otherinformation such as governance statements andmanagement commentary.85
FINANCIAL PERFORMANCE refers to income
and expenses as reflected on its income andcashflow statements (actual) or potential
income and expenses under different climaterelated scenarios.
FINANCIAL PLANNING refers to a company’s
consideration of how it will achieve and fund its
objectives and strategic goals. The process offinancial planning allows companies to assess
future financial positions and determine how
resources can be utilized in pursuit of shortand long-term objectives. As part of financial
planning, companies often create “financial
plans” that outline the specific actions, assets,
and resources (including capital) necessary toachieve these objectives over a one-to-five-year

period. However, financial planning is broader
than the development of a financial plan as
it includes long-term capital allocation andother considerations that may extend beyond
the typical three-to-five-year financial plan(e.g., investment, research and development,
manufacturing, and markets).
FINANCIAL POSITION refers to assets, liabilities,
and equity as reflected on its balance sheet(actual) or potential assets, liabilities, and equity
under different climate-related scenarios.
GOVERNANCE refers to “the system by which
an organization is directed and controlled
in the interests of shareholders and otherstakeholders.”86 “Governance involves a setof relationships between an organization’s
management, its board, its shareholders, and otherstakeholders. Governance provides the structure
and processes through which the objectives of theorganization are set, progress against performanceis monitored, and results are evaluated.”87
GREENHOUSE GAS (GHG) EMISSIONSSCOPE LEVELS 88• Scope 1 refers to all direct GHG emissions.
• Scope 2 refers to indirect GHG emissions fromconsumption of purchased electricity, heat,or steam.
• Scope 3 refers to other indirect emissions
not covered in Scope 2 that occur in the value
chain of the reporting company, including both
upstream and downstream emissions. Scope
3 emissions could include: the extraction andproduction of purchased materials and fuels,transport-related activities in vehicles not
owned or controlled by the reporting entity,
electricity-related activities (e.g., transmission
and distribution losses), outsourced activities,
and waste disposal.89
IMPLIED TEMPERATURE RISE refers to an
estimate of a global temperature rise associatedwith the greenhouse gas emissions of a single
entity (e.g., a company) or a selection of entities(e.g., those in a given investment portfolio, fund,or investment strategy). Expressed as a numericdegree rating, ITR metrics incorporate current

84OECD, G20/OECD Principles of Corporate Governance, 2015.

85

Based on Climate Disclosure Standards Board, CDSB Framework for Reporting Environmental and Climate Change Information, December 2019.

86

Cadbury, Report of the Committee on the Financial Aspects of Corporate Governance, 1992.

87

OECD, G20/OECD Principles of Corporate Governance, 2015.

88

 orld Resources Institute and World Business Council for Sustainable Development, The Greenhouse Gas Protocol: A Corporate Accounting andW
Reporting Standard (Revised Edition), March 2004.

89

 orld Resources Institute and World Business Council for Sustainable Development, The Corporate Value Chain (Scope 3) Accounting and Reporting
W
Standard, April 16, 2014.

101

The Task Force on Climate-related Financial Disclosures

GHG emissions or other data and assumptions toestimate expected future emissions associatedwith the selected entity or entities. Then, theestimate is translated into a projected increasein global average temperature (in °C) above preindustrial levels that would occur if all companies
in corresponding sectors had the same carbon
intensity as the selected asset(s).
MANAGEMENT refers to those positions acompany or organization views as executive or
senior management positions.
NET-ZERO refers to achieving an equal balance
between GHG emissions produced and GHG
emissions removed from the atmosphere.

A.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures
C.
Disclosureof Financial Impact
Appendices

RISK is defined in many ways. For purposes ofthis guidance, risk is defined as the possibility
or likelihood that actual results (operationalor financial) deviate from expected results ina manner that has an effect on objectives atdifferent levels (such as strategic, organizationwide, project, product, and process). Risk is often
characterized by reference to potential eventsand consequences, or a combination of these,and expressed in terms of a combination of theconsequences of an event (including changes
in circumstances) and the associated likelihoodof occurrence. Uncertainty is the state, evenpartial, of deficiency of information related to,understanding or knowledge of, an event, itsconsequence, or likelihood. Risk conceptuallyequals the probability or likelihood of hazardous
events occurring multiplied by the company’s
exposure and vulnerability to the event.
RISK ASSESSMENT consists of risks identification,risk analysis, and risk evaluation. The essentialbuilding blocks for comprehensively assessing risk
(and establishing metrics) are hazards, exposure,vulnerability, risk, and impacts.
RISK MANAGEMENT refers to a set ofprocesses that are carried out by a company
or organization’s board and management tosupport the achievement of its objectives byaddressing its risks and managing the combined
potential impact of those risks.
RISK PROFILE refers to each company’s risk
attitude, which may be described as risk-averse,
risk-neutral, or risk-seeking, a risk tolerance,
which looks at acceptable/unacceptabledeviations from what is expected, and a risk
appetite, which looks at how much risk one iswilling to accept.

90

SCENARIO ANALYSIS is a process for identifying
and assessing a potential range of outcomes of
future events under conditions of uncertainty.
In the case of climate change, for example,
scenarios allow an organization to explore anddevelop an understanding of how the physicaland transition risks of climate change may
impact its businesses, strategies, and financial
performance over time.
SECTOR refers to a segment of companies
performing similar business activities in an
economy. A sector generally refers to a large
segment of the economy or grouping of businesstypes, while “industry” is used to describe more
specific groupings of companies within a sector.
STRATEGY refers to an organization’s desired
future state. An organization’s strategy
establishes a foundation against which it canmonitor and measure its progress in reachingthat desired state. Strategy formulation generally
involves establishing the purpose and scopeof the organization’s activities and the natureof its businesses, taking into account the risks
and opportunities it faces and the environment
where it operates.
SUSTAINABILITY REPORT is a report that
describes a company’s or organization’s impact
on society, often addressing environmental,social, and governance issues.
TRANSITION PLAN refers to an aspect of anorganization’s overall business strategy thatlays out a set of targets and actions supporting
its transition toward a low-carbon economy,
including actions such as reducing its GHG
emissions.
USER, or PRIMARY USER, refers to investors,
lenders, and insurance underwriters. The Task
Force recognizes that many other organizations,
including credit rating agencies, equity analysts,
stock exchanges, investment consultants, andproxy advisors also use climate-related financial
disclosures, allowing them to push information
through the credit and investment chain andcontribute to the better pricing of risks byinvestors, lenders, and insurance underwriters.
These organizations, in principle, depend on thesame types of information as primary users.90

TCFD, Final Report, 2017, pp. 2–3.

102

The Task Force on Climate-related Financial Disclosures

Abbreviations
1.5°C

1.5° Celsius

2°C

2° Celsius

AUM

Assets under management

CA100+ Climate Action 100+

A.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures
C.
Disclosureof Financial Impact
Appendices

IIRC

International Integrated Reporting
Council

IOSCOInternational Organization of Securities
Commissions

IPCC

Intergovernmental Panel on Climate
ChangeISSBInternational Sustainability Standards
Board

NGFS

Network for Greening the Financial
SystemPRI

Principles for Responsible Investment

SASB

Sustainability Accounting Standards
Board

TCFD

Task Force on Climate-related
Financial Disclosures

UN

United Nations

CDP

Carbon Disclosure Project

CDSB

Climate Disclosure Standards Board

CSRD

Corporate Sustainability Reporting
Directive

ESG

Environmental, social, and governance

FSB

Financial Stability Board

G20Group of 20

GHG

Greenhouse gas

GRI

Global Reporting Initiative

IASB

International Accounting Standards
Board

IFRS

International Financial ReportingStandards

WACI

IIF

Institute of International Finance

WBCSD World Business Council for Sustainable
Development

IIGCC

Institutional Investors Groupon Climate Change

UNEP FI United Nations Environment
Programme Finance Initiative
Weighted average carbon intensity

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The Task Force on Climate-related Financial Disclosures

Appendix 7: References
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Initiatives
Supporting TCFD
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State of Climate-Related
Financial Disclosures

Assemblée Nationale. “Session Extraordinaire de 2014-2015.” July 22, 2015. https://www.assembleenationale.fr/14/ta/ta0575.asp.
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C.
Disclosureof Financial Impact

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AppendicesBank Negara Malaysia. “Joint Statement by Bank Negara Malaysia and Securities Commission
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CDP. Running Hot: Accelerating Europe’s Path to Paris. March 2021. https://www.cdp.net/en/research/
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Cemex. 2020 Integrated Report. https://www.cemex.com/documents/20143/52528892/
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Central Bank of Brazil. “BCB Public Consultation No. 86/2021 - Regulation on the disclosure of social,environmental, and climate-related risks by financial institutions.” April 30, 2021. https://www.
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sustainability.
A.
Initiatives
Supporting TCFD

Central Bank of Brazil. Public Consultation 86: New regulation on social, environmental, and climaterelated risk disclosures. April 26, 2021. https://www.bcb.gov.br/content/financialstability/
ruralcreditdocs/BCB_Public_Consultation_86.pdf.

B.
State of Climate-Related
Financial Disclosures

Ceres. “Investors and business leaders urge passage of California climate risk disclosure legislation.”
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C.
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Citi. Finance for a Climate-Resilient Future. 2018. https://www.citigroup.com/citi/sustainability/data/
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AppendicesCiti. Finance for a Climate-Resilient Future II: Citi’s 2020 TCFD Report. December 17, 2020. https://www.
citigroup.com/citi/sustainability/data/finance-for-a-climate-resilient-future-2.pdf?ieNocache=90.
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Climate Action 100+. “Net-Zero Company Benchmark.” 2021. https://www.climateaction100.org/
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Climate Disclosure Standards Board. CDSB Framework for Reporting Environmental and Climate Change
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Commissione Nazionale per la Societa’ e la Borsa. “Consob supports the recommendations of the
Task Force on Climate-related Financial Disclosures designed to increase transparency on climaterelated risks and opportunities.” March 1, 2021. https://www.consob.it/documents/46180/46181/
press_release_20210301.pdf/91dc1e26-72f1-40b8-8a40-fe43b803f74d.
Commonwealth Climate and Law Initiative. Concerns misplaced: Will compliance with the TCFD
recommendations really expose companies and directors to liability risk? September 2017.
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CPP Investments. Report on Sustainable Investing 2020. September 29, 2020. https://cdn2.
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Department for Business, Energy, and Industrial Strategy. “Mandatory climate-related financial
disclosures by publicly quoted companies, large private companies, and LLPs.” March 24, 2021.
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Department for Work & Pensions. “The Occupational Pension Schemes (Climate Change Governanceand Reporting) Regulations 2021.” July 21, 2021. https://www.gov.uk/government/consultations/taking-action-on-climate-risk-improving-governance-and-reporting-by-occupational-pensionschemes-response-and-consultation-on-regulations/the-occupational-pension-schemes-climatechange-governance-and-reporting-regulations-2021.
Department of Finance. “Minister Donohoe adds support to the Task Force on Climate-related
Financial Disclosures (TCFD) as a key initiative in developing sustainable investment.” November
5, 2020. https://www.gov.ie/en/press-release/f8f7a-minister-donohoe-adds-support-to-the-taskforce-on-climate-related-financial-disclosures-tcfd-as-a-key-initiative-in-developing-sustainable-investment/#:~:text=Speaking%20today%20during%20a%20virtual,climate%20risks%20and%20
increasing%20the.

A.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures
C.
Disclosureof Financial Impact
Appendices

Department of Finance Canada. Budget 2021 - A Recovery Plan for Jobs, Growth, and Resilience. 2021.
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European Commission. “Sustainable Finance and EU Taxonomy: Commission takes further steps tochannel money towards sustainable activities.” April 21, 2021. https://ec.europa.eu/commission/presscorner/detail/en/ip_21_1804.
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A.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures
C.
Disclosureof Financial Impact
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FINMA. “FINMA specifies transparency obligations for climate risks.” May 31, 2021. https://www.finma.
ch/en/news/2021/05/20210531-mm-transparenzpflichten-zu-klimarisiken/?pk_campaign=NewsService&pk_kwd=FINMA%20specifies%20transparency%20obligations%20for%20climate%20
risks.
FINMA. “Offenlegung – Banken.” January 1, 2016, Amended May 6, 2021. https://www.google.com/
url?q=https://www.finma.ch/de/~/media/finma/dokumente/dokumentencenter/myfinma/
rundschreiben/finma-rs-2016-01-20210506pdf?la%3Dde&sa=D&source=editors&ust=163293011
2756000&usg=AOvVaw2DjGyQiWGvUEzyFly7qJ7Y.

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Financial Services Agency, Ministry of Economy, Trade and Industry, and Ministry of the Environment,
Japan. Basic Guidelines on Climate Transition Finance. May 2021. https://www.fsa.go.jp/en/
news/2021/20210524/04.pdf.
Financial Services Commission Korea. “Financial Authorities and Relevant Institutions Declare
Support for the TCFD and its Recommendations.” May 24, 2021. https://www.fsc.go.kr/eng/
pr010101/75957?srchCtgry=&curPage=&srchKey=&srchText=&srchBeginDt=&srchEndDt=.
Financial Stability Board (FSB). “FSB encourages the IFRS Foundation and authorities to use TCFD’s
recommendations as the basis for climate-related financial risk disclosures.” December 21, 2020.
https://www.fsb.org/2020/12/fsb-encourages-the-ifrs-foundation-and-authorities-to-use-tcfdsrecommendations-as-the-basis-for-climate-related-financial-risk-disclosures/.
FSB. “FSB roadmap for addressing climate-related financial risks.” July 7, 2021. https://www.fsb.
org/2021/07/fsb-roadmap-for-addressing-climate-related-financial-risks/.
FSB. “FSB welcomes TCFD status report.” October 29, 2020. https://www.fsb.org/2020/10/fsbwelcomes-tcfd-status-report/.

A.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures
C.
Disclosureof Financial Impact
Appendices

FSB. Proposal for a disclosure task force on climate-related risks. November 9, 2015. https://www.fsb.org/
wp-content/uploads/Disclosure-task-force-on-climate-related-risks.pdf.
FSB. Report on Promoting Climate-Related Disclosures. July 7, 2021. https://www.fsb.org/wp-content/
uploads/P070721-4.pdf?edLDf=false.
Ford. Integrated Sustainability and Financial Report 2021. https://corporate.ford.com/microsites/
integrated-sustainability-and-financial-report-2021/files/ir21.pdf.
Government of Germany. German Sustainable Finance Strategy. May 2021. https://www.
bundesfinanzministerium.de/Content/EN/Standardartikel/Press_Room/Publications/Brochures/
sustainable-finance-strategy.pdf?__blob=publicationFile&v=7.
Green and Sustainable Finance Cross-Agency Steering Group. “Strategic Plan to Strengthen
Hong Kong’s Financial Ecosystem to Support a Greener and More Sustainable Future.”
December 17, 2020. https://www.hkma.gov.hk/media/eng/doc/key-information/pressrelease/2020/20201217e4a1.pdf.
Group of Thirty. “G30 Calls for Urgent and Practical Steps to Speed Transition to a Net-Zero Economy
as Time Runs Out, Global Financial Community Must Engage to Avert Climate Catastrophe.”
October 8, 2020. https://ww1.prweb.com/prfiles/2020/10/05/17448548/Mainstreaming%20
the%20Transition%20to%20a%20Net-Zero%20Economy%20Press%20Release.pdf.
Hannon Armstrong Sustainable Infrastructure Capital, Inc. Form 10-K 2020. February 22, 2021. https://
d18rn0p25nwr6d.cloudfront.net/CIK-0001561894/e54092ce-7ecd-424c-a1ef-5a3bdb802dbb.html.
Hewlett Packard Enterprise. 2019 Living Progress Report. June 2020. https://www.hpe.com/us/en/
collaterals/collateral.a00097537enw.2019-Living-Progress-Report.html?rpv=cpf&parentPage=/us/
en/living-progress/report.
HM Treasury. Interim Report of the UK’s Joint Government-Regulator TCFD Taskforce. November 2020.
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/
file/933782/FINAL_TCFD_REPORT.pdf.
HM Treasury. A Roadmap towards mandatory climate-related disclosures. November 2020. https://
assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/
file/933783/FINAL_TCFD_ROADMAP.pdf.
Hong Kong Monetary Authority (HKMA). “Cross-Agency Steering Group Launches its Strategic Plan
to Strengthen Hong Kong’s Financial Ecosystem to Support a Greener and More Sustainable
Future.” December 17, 2020. https://www.hkma.gov.hk/eng/news-and-media/pressreleases/2020/12/20201217-4/.
HKMA. Supervisory Policy Manual: Climate Risk Management. July 20, 2021. https://www.hkma.gov.
hk/media/eng/doc/key-functions/banking-stability/supervisory-policy-manual/GS-1_for_
consultation_20Jul2021.pdf.
108

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IE Foundation. Sovereign Wealth Funds 2018. 2019. https://docs.ie.edu/cgc/SWF-CGC-2018.pdf.
Impact Management Project, World Economic Forum, and Deloitte. Reporting on enterprisevalue: Illustrated prototype climate-related financial disclosure standard. December 2020.
https://29kjwb3armds2g3gi4lq2sx1-wpengine.netdna-ssl.com/wp-content/uploads/Reportingon-enterprise-value_climate-prototype_Dec20.pdf.
Institutional Investors Group on Climate Change. IIGCC investor expectations for Paris-aligned accounts.
November 2020. https://www.iigcc.org/download/investor-expectations-for-paris-aligned-accoun
ts/?wpdmdl=4001&masterkey=5fabc4d15595d.
Intergovernmental Panel on Climate Change. Special Report on Global Warming of 1.5°C Summary for
Policymakers. January 2019. https://www.ipcc.ch/site/assets/uploads/sites/2/2019/05/SR15_SPM_
version_report_LR.pdf.
International Air Transportation Association. What is SAF? https://www.iata.org/contentassets/
d13875e9ed784f75bac90f000760e998/saf-what-is-saf.pdf.

A.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures
C.
Disclosureof Financial Impact
AppendicesInternational Federation of Accountants. Auditor Reporting Standards Implementation: Key Audit
Matters. December 13, 2017. https://www.ifac.org/knowledge-gateway/supporting-internationalstandards/discussion/auditor-reporting-standards-implementation-key-audit-matters.
International Finance Corporation. Green Bond Impact Report Financial Year 2019. https://documents1.
worldbank.org/curated/en/961221573041494528/pdf/Financial-Year-2019.pdf.
International Financial Reporting Standards Foundation (IFRS). Conceptual Framework. 2021.
https://www.ifrs.org/issued-standards/list-of-standards/.
IFRS. “Educational material: the effects of climate-related matters on financial statements prepared
applying IFRS Standards.” November 20, 2020. https://www.ifrs.org/news-and-events/
news/2020/11/educational-material-on-the-effects-of-climate-related-matters/.
IFRS. “IFRS Foundation Trustees announce next steps in response to broad demand for global
sustainability standards.” February 2, 2021. https://www.ifrs.org/news-and-events/
news/2021/02/trustees-announce-next-steps-in-response-to-broad-demand-for-globalsustainability-standards/.
IFRS. “IFRS Foundation Trustees announce strategic direction and further steps based on feedback
to sustainability reporting consultation.” March 8, 2021. https://www.ifrs.org/news-and-events/
news/2021/03/trustees-announce-strategic-direction-based-on-feedback-to-sustainabilityreporting-consultation/.
IFRS. “IFRS Foundation Trustees announce working group to accelerate convergence in global
sustainability reporting standards focused on enterprise value.” March 22, 2021. https://www.ifrs.
org/news-and-events/news/2021/03/trustees-announce-working-group/.
IFRS. “IFRS Foundation Trustees publish institutional arrangements for proposed new sustainability
standards board.” April 30, 2021. https://www.ifrs.org/news-and-events/news/2021/04/ifrstrustees-publish-institutional-arrangements-for-proposed-new-sustainability-standards-board/.
International Organization of Securities Commissions (IOSCO). “IOSCO sees an urgent need for
globally consistent, comparable, and reliable sustainability disclosure standards and announces
its priorities and vision for a Sustainability Standards Board under the IFRS Foundation.” February
24, 2021. https://www.iosco.org/news/pdf/IOSCONEWS594.pdf.
IOSCO. “IOSCO Technical Expert Group to undertake an assessment of the technicalrecommendations to be developed as part of the IFRS Foundation’s sustainability project.” March
30, 2021. https://www.iosco.org/news/pdf/IOSCONEWS599.pdf.
IOSCO. Report on Sustainability-related Issuer Disclosures. June 2021. https://www.iosco.org/library/
pubdocs/pdf/IOSCOPD678.pdf?edLDf=false.
Investment Association. “Investment industry calls on G7 to take further action on climate change.”
June 1, 2021. https://www.theia.org/media/press-releases/investment-industry-calls-g7-takefurther-action-climate-change#.
109

The Task Force on Climate-related Financial Disclosures

Investor Agenda. “The Investor Agenda: Accelerating action for a net-zero emissions economy.” 2021.
https://theinvestoragenda.org/.
Investor Agenda. “2021 Global Investor Statement to Governments on the Climate Crisis.”2021. https://theinvestoragenda.org/wp-content/uploads/2021/05/IN-CONFIDENCE_EMBARGOED_2021-Global-Investor-Statement-to-Governments-on-the-Climate-Crisis-1.
pdf?edLDf=false.
Ircantec. 2019 Climate Action and ESG Report. July 2020. https://www.ircantec.retraites.fr/sites/default/
files/public/actionsclimat20gb.pdf.
Italian G20 Presidency. Third Finance Ministers and Central Bank Governors meeting. July 10, 2021.
https://www.g20.org/wp-content/uploads/2021/07/Communique-Third-G20-FMCBG-meeting-910-July-2021.pdf.
Japan Airlines (JAL) Group. 2020 Sustainability Report. 2020. https://www.jal.com/en/sustainability/
report/pdf/index_2020_04.pdf.
Japan Exchange Group. “Publication of Revised Japan’s Corporate Governance Code.” June 11, 2021.
https://www.jpx.co.jp/english/news/1020/20210611-01.html.
A.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures
C.
Disclosureof Financial Impact
Appendices

Legal and General Group Plc. 2020 Climate Report in line with recommendations from the Task Forceon Climate-related Financial Disclosures. https://www.legalandgeneralgroup.com/media/18377/
fy2020-lg-tcfd-report.pdf.
Lendlease. Lendlease Annual Report 2021. August 15, 2021. https://www.llwebstore.com/flippingbook/lendlease/annualreport/2021/52-53/.
Liu, Yinhan, et al. “Roberta: A robustly optimized bert pretraining approach.” July 26, 2019. https://
arxiv.org/abs/1907.11692.
London Stock Exchange Group (LSEG). “LSEG becomes a Business Ambition 1.5 signatory – joins Raceto Zero.” February 16, 2021. https://www.lseg.com/resources/media-centre/press-releases/lsegbecomes-business-ambition-1-5%C2%B0-signatory-joins-race-zero.
LSEG. Your guide to ESG reporting: Guidance for issuers on the integration of ESG into investor reportingand communication. https://www.lseg.com/sites/default/files/content/GReen/LSEG_Guide_to_ESG_
Reporting_2020.pdf.
Market Screener. “London Stock Exchange: to Launch Transition-Bond Segment, Commits to NetZero.” February 16, 2021. https://www.marketscreener.com/quote/stock/LONDON-STOCKEXCHANGE-PLC-4005918/news/London-Stock-Exchange-nbsp-to-Launch-Transition-BondSegment-Commits-to-Net-Zero-32450527/.
Meridian Energy. Climate Change Disclosures Meridian Energy Limited FY20. August 2020. https://www.
meridianenergy.co.nz/assets/Sustainability/Meridian-Climate-Change-Disclosures-TCFD-ReportFY20.pdf.
Mexican Green Finance Advisory Council. “Solicitud hacia emisoras públicas respecto a divulgación deinformación ambiental, social y de gobierno corporativo.” September 2020. https://www.ccfv.mx/
finanzas-verdes/documentos/reportes-2020.
Ministry of Business, Innovation, and Employment. “Mandatory climate-related disclosures.” https://www.mbie.govt.nz/business-and-employment/business/regulating-entities/mandatory-climaterelated-disclosures/.
Ministry of Economy, Trade, and Industry. “TCFD Guidance 2.0 published.” July 30, 2020. https://www.
meti.go.jp/english/press/2020/0731_002.html.
Ministry of Economy, Trade, and Industry. “TCFD Summit 2020 to be Held.” September 1, 2020.
https://www.meti.go.jp/english/press/2020/0901_001.html.
Ministry of Finance of Chile. “Series of webinars on Green Finance – United Nations Environment –Finance Initiative.” 2020. https://www.unepfi.org/events/ciclo-de-webinars-finanzas-verdes/.
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Monetary Authority of Singapore (MAS). Guidelines on Environmental Risk Management for AssetManagers. December 8, 2020. https://www.mas.gov.sg/regulation/guidelines/guidelines-onenvironmental-risk-management-for-asset-managers.
MAS. Guidelines on Environmental Risk Management for Banks. December 8, 2020. https://www.mas.
gov.sg/regulation/guidelines/guidelines-on-environmental-risk-management-for-asset-managers.
MAS. Guidelines on Environmental Risk Management for Insurers. December 8, 2020. https://www.mas.
gov.sg/regulation/guidelines/guidelines-on-environmental-risk-management.
MAS. Response to feedback received: Proposed Guidelines on Environmental Risk Management (Banks).
December 2020. https://www.mas.gov.sg/-/media/MAS/Regulations-and-Financial-Stability/
Regulations-Guidance-and-Licensing/Commercial-Banks/Regulations-Guidance-and-Licensing/
Guidelines/Guidelines-on-Environmental-Risk---Banks/Response-to-Feedback-Received-forProposed-Guidelines-on-Environmental-Risk-Management-for-Banks.pdf.
MAS. Sustainability Report 2020/2021. June 9, 2021. https://www.mas.gov.sg/publications/sustainability-report/2021/sustainability-report.

A.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures
C.
Disclosureof Financial Impact
Appendices

Nature. “Business risk and the emergence of climate-related analytics.” February 8, 2021. https://www.nature.com/articles/s41558-020-00984-6?utm_source=other&utm_medium=other&utm_
content=null&utm_campaign=JRCN_1_DD01_CN_NatureRJ_article_paid_XMOL.
Nature. “Probabilistic cost estimates for climate change mitigation.” January 2, 2013. https://www.
nature.com/articles/nature11787.
Network for Greening the Financial System. A call for action: climate change as a source of financial
risk. April 2019. https://www.ngfs.net/sites/default/files/medias/documents/ngfs_first_
comprehensive_report_-_17042019_0.pdf.
New York State Department of Financial Services. “During New York Climate Week, DFS
Superintendent Linda A. Lacewell announces actions bolstering DFS’s commitment to addressing
climate-related financial risks.” September 22, 2020. https://www.dfs.ny.gov/reports_and_
publications/press_releases/pr202009221.
The New York Times. “China’s Pledge to be Carbon Neutral by 2060: What it Means.” December 4,
2020. https://www.nytimes.com/2020/09/23/world/asia/china-climate-change.html.
New Zealand Government. “New Zealand first in the world to require climate risk.” September
15, 2020. https://www.beehive.govt.nz/release/new-zealand-first-world-require-climate-riskreporting.
New Zealand Parliament. Climate Change Response (Zero Carbon) Amendment Bill. 2019. https://www.parliament.nz/en/pb/bills-and-laws/bills-proposed-laws/document/BILL_87861/climatechange-response-zero-carbon-amendment-bill.
Nordic CEOs for a Sustainable Future. Climate risk management - A guide to getting started. 2021. https://www.telenor.com/wp-content/uploads/2021/05/Climate-risk-management-A-guide-to-gettingstarted.pdf.
Norges Bank Investment Management. “Investments.” https://www.nbim.no/en/the-fund/investments/#/.
Orbia. TCFD Report 2020. 2020. https://www.orbia.com/49908e/siteassets/6.-sustainability/tcfdreports/2020/orbia-2020-tcfd-report.pdf.
Organisation for Economic Co-operation and Development (OECD). G20/OECD Principles of Corporate
Governance. November 30, 2015. https://www.oecd-ilibrary.org/governance/g20-oecd-principlesof-corporate-governance-2015_9789264236882-en.
OECD. OECD Insurance Statistics 2019. https://read.oecd-ilibrary.org/finance-and-investment/
oecdinsurance-statistics-2019_g2g9fade-en#page15.
OECD. Pension Markets in Focus 2020. http://www.oecd.org/finance/private-pensions/
globalpensionstatistics.htm.
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The Task Force on Climate-related Financial Disclosures

Peruvian Securities Commision. “Peru commission support of TCFD recommendations.” October 28,
2020. https://www.bnamericas.com/en/news/peru-securities-commission-declares-support-oftcfd-recommendations.
PGIM and Greenwich Associates. “Seeking Higher Ground: Institutional Investors Respond to Climate
Change.” April 12, 2021. https://www.greenwich.com/asset-management/seeking-higher-groundinstitutional-investors-respond-climate-change.
PIMCO. “ESG in Action: Evaluating Global Financials.” September 12, 2017. https://europe.pimco.com/
en-eu/insights/viewpoints/esg-in-action-evaluating-global-financials.
Portfolio Alignment Team. Measuring Portfolio Alignment: Technical Considerations. October 2021.
https://www.tcfdhub.org/resource/measuring-portfolio-alignment-technical-considerations.
Prequin. “Pro Tips: Investor Advanced Search.” February 15, 2021. https://www.preqin.com/helpcenter/articles/view/investor-advanced-search.

A.
Initiatives
Supporting TCFD
B.
State of Climate-Related
Financial Disclosures
C.
Disclosureof Financial Impact
AppendicesPrinciples for Responsible Investment (PRI). “Investor groups call on companies to reflect climaterelated risks in financial reporting.” September 16, 2020. https://www.unpri.org/accounting-forclimate-change/investor-groups-callon-companies-to-reflect-climate-related-risks-in-financialreporting/6432.article.
PRI. “Testing the taxonomy: insights from the PRI Taxonomy Practitioners Group.” September 9, 2020.
https://www.unpri.org/eu-taxonomy-alignment-casestudies/testing-the-taxonomy-insights-fromthe-pri-taxonomy-practitioners-group/6409.article.
Public Company Accounting Oversight Board. “Implementation of Critical Audit Matters: The Basics.”
March 18, 2019. https://pcaobus.org/Standards/Documents/Implementation-of-Critical-AuditMatters-The-Basics.pdf.
Public Service Enterprise Group. Climate Report 2020. 2020. https://corporate.pseg.com/-/media/pseg/
corporate/newsroom/attachments/2020/2020_climate_report.ashx.
Responsible Investor. “CA100+ benchmark reveals ‘painful’ progress on climate as investors turnattention to pay, accounting, Just Transition.” March 22, 2021. https://www.responsible-investor.
com/articles/ca100-benchmark-reveals-painful-progress-on-climate-as-investors-turn-attentionto-pay-accounting-just-transition.
Reuters. “Hong Kong sets new climate disclosure rules, aligns with global standard.” December 17,
2020. https://www.reuters.com/article/us-hong-kong-regulator-climate-change/hong-kong-setsnew-climate-disclosure-rules-aligns-with-global-standard-idUSKBN28R0Y5.
Schweizerische Eidgenossenschaft. “Switzerland promotes transparency on climate-related financial
risks.” January 12, 2021. https://www.admin.ch/gov/en/start/documentation/media-releases.msgid-81924.html.
Securities and Exchange Board of India. “SEBI Board Meeting PR No. 15/2021.” March 25, 2021. https://www.sebi.gov.in/media/press-releases/mar-2021/sebi-board-meeting_49648.html.
Securities and Futures Commission. “Green and sustainable finance.” August 23, 2021. https://www.
sfc.hk/en/Green-and-sustainable-finance.
Singapore Exchange Regulation. “Consultation Paper on Climate and Diversity.” August 26, 2021.
https://www.sgx.com/regulation/public-consultations/20210826-consultation-paper-climate-anddiversity.
Singapore Exchange Regulation. “SGX RegCo charts the way forward on mandatory climate
reporting, wants board diversity disclosures.” August 26, 2021. https://www.sgx.com/mediacentre/20210826-sgx-regco-charts-way-forward-mandatory-climate-reporting-wants-board.
S&P Global. “Model Behavior: How Enhanced Climate Risk Analytics Can Better Serve Financial Market
Participants.” June 24, 2021. https://www.spglobal.com/ratings/en/research/articles/210624environmental-social-and-governance-model-behavior-how-enhanced-climate-risk-analyticscan-better-serve-f-11977230.
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S&P Global. “S&P Global Ratings Proposes Additional Transparency On ESG Factors As Drivers Of
Credit Ratings.” April 21, 2021. https://www.spglobal.com/ratings/en/research/articles/210421s-p-global-ratings-proposes-additional-transparency-on-esg-factors-as-drivers-of-creditratings-11926562.
Standard Bank Group. TCFD Interim Report 2020. https://www.standardbank.com/static_file/StandardBankGroup/filedownloads/TCFDInterimReport2020.pdf.
Sunak, Rishi. “Chancellor statement to the House – Financial Services.” November 9, 2020. https://www.gov.uk/government/speeches/chancellor-statement-to-the-house-financial-services.
Sustainable Finance Ireland. “Sustainable Finance Ireland.” https://www.sustainablefinance.ie/.
Sustainable Finance Ireland. Sustainable Finance Watch. January 2021. https://www.sustainablefinance.
ie/wp-content/uploads/2021/02/SFI_Newsletter_ Jan_04.pdf.
Sustainable Stock Exchanges Initiative. Model Guidance on Climate Disclosure: A template for stock
exchanges to guide issuers on TCFD implementation. 2021. https://sseinitiative.org/publication/model-guidance-on-climate-disclosure-a-template-for-stock-exchanges-to-guide-issuers-on-tcfdimplementation/.
A.
Initiatives
Supporting TCFD

Sustainable Stock Exchanges Initiative. “SSE launches Climate Disclosure work with Mark Carney and
LSEG.” July 15, 2020. https://sseinitiative.org/all-news/sse-launches-climate-disclosure-work-withmark-carney-and-lseg/.

B.
State of Climate-Related
Financial Disclosures

Swiss Federal Council. “Federal Council fleshes out proposals for sustainable Swiss financial centre.”
November 12, 2020. https://www.sif.admin.ch/sif/en/home/dokumentation/medienmitteilungen/medienmitteilung.msg-id-81571.html.

C.
Disclosureof Financial Impact

Swiss Financial Market Supervisory Authority. “FINMA specifies transparency obligations forclimate risks.” May 31, 2021. https://www.finma.ch/en/news/2021/05/20210531-mmtransparenzpflichten-zu-klimarisiken/?pk_campaign=News-Service&pk_kwd=FINMA%20
specifies%20transparency%20obligations%20for%20climate%20risks.

Appendices

Task Force on Climate-related Financial Disclosures (TCFD). “CAC40 companies, Paris EUROPLACE
and Finance for Tomorrow Join the French Ministry of Economy, Finance, and the Recovery,
Euronext, and French Market Authority in Support of the TCFD Recommendations.” December
12, 2020. https://www.fsb-tcfd.org/2020/12/12/cac-40-companies-paris-europlace-and-financefor-tomorrow-join-the-french-ministry-of-economy-finance-and-the-recovery-euronext-and-thefrench-market-authority-in-support-of-the-tcfd-recommendatio/.
TCFD. Final Report: Recommendations of the Task Force on Climate-related Financial Disclosures. June 29,
2017. https://www.fsb-tcfd.org/recommendations/.
TCFD. Forward-Looking Financial Metrics Consultation: Summary of Responses. March 2021. https://
assets.bbhub.io/company/sites/60/2021/03/Summary-of-Forward-Looking-Financial-MetricsConsultation.pdf.
TCFD. Guidance on Metrics, Targets, and Transition Plans. October 14, 2021. https://assets.bbhub.io/
company/sites/60/2021/07/2021-Metrics_Targets_Guidance-1.pdf.
TCFD. Guidance on Risk Management Integration and Disclosure. October 2020. https://www.fsb.org/wpcontent/uploads/P291020-2.pdf.
TCFD. Guidance on Scenario Analysis for Non-Financial Companies. October 2020. https://assets.bbhub.
io/company/sites/60/2020/09/2020-TCFD_Guidance-Scenario-Analysis-Guidance.pdf.
TCFD. Implementing the Recommendations of the Task Force on Climate-related Financial Disclosures.
October 14, 2021. https://assets.bbhub.io/company/sites/60/2021/07/2021-TCFD-Implementing_
Guidance.pdf.
TCFD. Proposed Guidance on Climate-related Metrics, Targets, and Transition Plans. June 2021. https://
assets.bbhub.io/company/sites/60/2021/05/2021-TCFD-Metrics_Targets_Guidance.pdf.

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TCFD. Proposed Guidance on Climate-related Metrics, Targets, and Transition Plans: Summary of Responses.
October 14, 2021. https://assets.bbhub.io/company/sites/60/2021/08/Summary-of-June-2021Public-Consultation.pdf.
TCFD. “TCFD Knowledge Hub.” https://www.tcfdhub.org/.
TCFD. 2018 Status Report. September 26, 2018. https://assets.bbhub.io/company/sites/60/2020/10/
FINAL-2018-TCFD-Status-Report-092518.pdf.
TCFD. 2019 Status Report. June 5, 2019. https://www.fsb.org/2019/06/task-force-on-climate-relatedfinancial-disclosures-2019-status-report/.
TCFD. 2020 Status Report. October 29, 2020. https://www.fsb.org/wp-content/uploads/P291020-1.pdf.
TCFD Consortium. “GIG Supporters.” https://tcfd-consortium.jp/en/gig_supporters.
TCFD Consortium. Guidance on Climate-related Financial Disclosures 2.0. July 2020. https://tcfdconsortium.jp/pdf/en/news/20081201/TCFD_Guidance_2_0-e.pdf.
TCFD Summit. “TCFD Summit.” https://tcfd-summit.go.jp/aboutEn.html.
A.
Initiatives
Supporting TCFDTokyo Stock Exchange. Japan’s Corporate Governance Code: Seeking Sustainable Corporate Growth andIncreased Corporate Value over the Mid- to Long-Term. June 11, 2021. https://www.jpx.co.jp/english/
news/1020/b5b4pj0000046kxj-att/b5b4pj0000046l07.pdf?edLDf=false.

B.
State of Climate-Related
Financial Disclosures

UK Department for Work and Pensions. “UK brings forward world-leading climate change legislation.”
June 8, 2021. https://www.gov.uk/government/news/uk-brings-forward-world-leading-climatechange-legislation.

C.
Disclosureof Financial Impact

UK Export Finance. “Task Force on Climate-related Financial Disclosures: UK Export Finance direction
statement.” March 19, 2021. https://www.gov.uk/government/publications/task-force-on-climaterelated-financial-disclosures-uk-export-finance-direction-statement/task-force-on-climaterelated-financial-disclosures-uk-export-finance-direction-statement.

Appendices

UN Environment Programme Finance Initiative (UNEP FI). “Series of webinars on green finance.”https://www.unepfi.org/net-zero-alliance/.
UNEP FI. “UNEP FI TCFD Banking Pilot Projects.” https://www.unepfi.org/climate-change/tcfd/tcfd-forbanks/.
UNEP FI. “United Nations-Convened Net-Zero Asset Owner Alliance.” https://www.unepfi.org/netzero-alliance/.
UNEP FI, Institute of International Finance, and Ernst & Young. TCFD report playbook. September 25,
2020. https://www.unepfi.org/publications/banking-publications/tcfd-report-playbook/.
UN Global Compact. “Business Ambition for 1.5 °C.” https://unglobalcompact.org/take-action/events/
climate-action-summit-2019/business-ambition.
U.S. Commodity Futures Trading Commission. Managing Climate Risk in the U.S. Financial System.
https://www.cftc.gov/sites/default/files/2020-09/9-9-20%20Report%20of%20the%20
Subcommittee%20on%20Climate-Related%20Market%20Risk%20-%20Managing%20Climate%20
Risk%20in%20the%20U.S.%20Financial%20System%20for%20posting.pdf.
U.S. Department of the Treasury. “G20 Finance Ministers and Central Bank Governors Communiqué.”July 10, 2021. https://home.treasury.gov/news/press-releases/jy0269.
U.S. Department of the Treasury. “Secretary of the Treasury Janet L. Yellen’s Remarks to the Instituteof International Finance.” April 21, 2021. https://home.treasury.gov/news/press-releases/jy0139.
U.S. Securities and Exchange Commission. “Comments on Climate Change Disclosures.” https://www.
sec.gov/comments/climate-disclosure/cll12.htm.

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U.S. Securities and Exchange Commission. “Public Statement: Public Input Welcomed on Climate
Change Disclosures.” March 15, 2021. https://www.sec.gov/news/public-statement/lee-climatechange-disclosures.
Via Ritzau. “Denmark to promote shift from black to green investments, announcing support
for the Task Force on Climate-related Financial Disclosures.” October 21, 2020. https://via.
ritzau.dk/pressemeddelelse/denmark-to-promote-shift-from-black-to-green-investmentsannouncing-support-for-the-task-force-on-climate-related-financial-disclosures?publisherId=9426318&releaseId=13602712.
Volkswagen. Sustainability Report 2020. March 2021. https://www.volkswagenag.com/presence/nachhaltigkeit/documents/sustainability-report/2020/Nonfinancial_Report_2020_e.pdf.
Wang, et al. “GLUE: A multi-task benchmark and analysis platform for natural language
understanding.” April 20, 2018 (Revised February 22, 2019). https://arxiv.org/abs/1804.07461.
Wasim, Roshaan. “Corporate (Non)Disclosure of Climate Change Information.” Columbia Law
Review 119 (2019): 1311–1354. https://columbialawreview.org/wp-content/uploads/2019/06/
WasimCORPORATE_NONDISCLOSURE_OF_CLIMATE_CHANGE_INFORMATION.pdf.
A.
Initiatives
Supporting TCFD

World Business Council for Sustainable Development. “Task Force on Climate-related Financial
Disclosure (TCFD) Preparer Forums Resources.” 2021. https://www.wbcsd.org/Programs/
Redefining-Value/TCFD/Resources.

B.
State of Climate-Related
Financial Disclosures

World Resources Institute and World Business Council for Sustainable Development. The Corporate
Value Chain (Scope 3) Accounting and Reporting Standard. April 16, 2014. https://ghgprotocol.org/
sites/default/files/standards/Corporate-Value-Chain-Accounting-Reporing-Standard_041613_2.
pdf.

C.
Disclosureof Financial Impact

World Resources Institute and World Business Council for Sustainable Development. The Greenhouse
Gas Protocol: A Corporate Accounting and Reporting Standard (Revised Edition). March 2004. https://
ghgprotocol.org/sites/default/files/standards/ghg-protocol-revised.pdf.

Appendices115

For more information, please visit fsb-tcfd.org

Nothing in this document constitutes an offer or a solicitation of an offer to buy or sell a security or financial instrument or investment advice or recommendation of a security or
financial instrument. The Task Force on Climate-related Financial Disclosures believes the information herein was obtained from reliable sources but does not guarantee its accuracy.
Copyright 2021 The Task Force on Climate-related Financial Disclosures.

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