Task Force on
Climate-related
Financial Disclosures
Overview

December 2022

Contents

B

The Need for Climate-Related Financial Disclosure2

Potential Financial Implications of Climate Change

4

The Task Force on Climate-related Financial Disclosures

6

Demand for Climate-Related Financial Disclosure

10

Climate-Related Risks and Opportunities

12

TCFD Publications

14

TCFD Recommendations and Recommended Disclosures

16

TCFD Guidance

22

Guidance for All Sectors

22

Supplemental Guidance for Certain Sectors

24

Guidance on Specific Recommendations

26

Implementing the TCFD Recommendations30

Benefits of Implementation32

Select Resources on the TCFD Recommendations

34

TCFD Milestones

36

Overview of the TCFD 2022 Status Report

40

International Support for the TCFD

42

1

The Need for Climate-Related Financial Disclosure

The Need for Climate-Related
Financial Disclosure
The large-scale and complex natureof climate change makes it uniquely
challenging, especially in the context
of economic decision-making.
Further, many companies haveincorrectly viewed the implicationsof climate change to be relevant
only in the long term and, therefore,
not necessarily relevant to decisions
made today. Those views, however,are changing as more information
becomes available on the potential
widespread financial impacts ofclimate change.
In December 2019, Bank of England
Governor Mark Carney noted that“changes in climate policies, newtechnologies and growing physicalrisks will prompt reassessments ofthe values of virtually every financial
asset.” Companies and providers ofcapital, therefore, should consider

their longer-term strategies and mostefficient allocation of capital in lightof these changes. Organizations thatinvest in activities that may not be
viable in the longer term will likely
be less resilient to the transition to alower-carbon economy — and theirinvestors will likely experiencelower returns.

“Now is the time to ensure that every financial
decision takes climate change into account.”– Mark Carney, UN Special Envoy on Climate Action and Finance,
Governor of the Bank of England (2013–2020), FSB Chair (2011–2018),
December 2019Mark Carney, UN Special Envoy on Climate Action and Finance, and Michael R. Bloomberg, TCFD Chair

Compounding the effect on longer-term
returns is the risk that present
valuations do not adequately factor
in climate-related risks because of
insufficient information. Investors,
lenders, and insurance underwriters
need adequate information on
how companies are preparing for alower-carbon economy. More effective,
clear, and consistent climate-related
disclosure is needed from companies
around the world.

Natural catastrophe losses intensified
by climate change (2017–2021)1
Value at risk as a result of climate change
to manageable assets by 21002$1.28T$43T

up to

Munich Re, “Hurricanes, cold waves, tornadoes: Weather disasters in USA dominate natural disaster losses in 2021,” January 10, 2022;“Record hurricane season and major wildfires — The natural disaster figures for 2020,” January 7, 2021; “Tropical cyclones causingbillions in losses dominate nat cat picture of 2019,” January 8, 2020; “The natural disasters of 2018 in figures,” January 8, 2019; and“Hurricanes cause record losses in 2017 — The year in figures,” January 4, 2018.

1

The Economist Intelligence Unit, “The Cost of Inaction: Recognising the Value at Risk from Climate Change,” 2015.

2

2

3

Potential Financial Implications of Climate Change

Potential Financial
Implications of
Climate Change
Extreme Weather Events and Gradual
Changes in Climate• E xtreme weather events affect healthand damage infrastructure andproperty, reducing wealth anddecreasing productivity. They canalso disrupt economic activity andtrade, creating resource shortages
and diverting capital from moreproductive uses.
• Changes in the natural environment
affect the livability of different regions,especially if mean temperatures riseby more than 1.5ºC–2°C, and posesignificant risks to human health,food security, water resources, etc.
Transition to a Low-Carbon Economy• The transition to a low-carbon economy
requires rapid and far-reachingtransitions across sectors, including
significant changes in investment.
• A disorderly, sudden, unanticipated,or discontinuous transition would
be more disruptive and costly thanan orderly transition.

3

4

Risk Drivers3
Physical: rising temperatures,
higher sea levels, and more
destructive natural catastrophes
Transition: climate policy changes,
innovations in technology, andshifts in consumer preferences

Climate Change Is a Financial Risk
Climate-related risk is non-diversifiable
and will have a financial impact on
many companies:

Potential
Economic Effects• Business disruption• Lower productivity• Reconstruction, reinvestment,
and replacement

REVENUES

EXPENDITURES• Higher commodity andenergy prices

Potential
Financial Effects• Lower property values and asset
devaluations“Climate-relatedrisks are a sourceof financial risk andit therefore falls
squarely within
the mandatesof central banks
and supervisors toensure the financial
system is resilientto these risks.”
– Network for Greening
the Financial System,
First Comprehensive Report,
April 2019ASSETS AND
LIABILITIESCAPITAL AND
FINANCING• Lower corporate profits andhousehold wealth• Financial market losses (equities,
bonds, commodities)• Credit market losses (residential
and corporate loans)

Based on Network for Greening the Financial System (NGFS), First comprehensive report: A call for action, pp. 13–17.

5

The Task Force on Climate-related Financial Disclosures

Chapter name

The Task Force on
Climate-related
Financial Disclosures
G20 Finance Ministers and Central Bank
Governors asked the Financial Stability
Board (FSB) to review how the financial
sector can take account of climaterelated issues.
The FSB established the Task Force on
Climate-related Financial Disclosures(TCFD or Task Force) to develop
recommendations for more effective
climate-related disclosures that:• could “promote more informed
investment, credit, and insurance
underwriting decisions” and• in turn, “would enable stakeholders tounderstand better the concentrationsof carbon-related assets in the financial
sector and the financial system’s
exposures to climate-related risks.”

657

The Task Force on Climate-related Financial Disclosures

Industry-Led Task Forcewith Geographically Diverse
Members and Supporters

The Task Force’s 31 international members, led by Michael R. Bloomberg,
include providers of capital, insurers, large non-financial companies,
accounting and consulting firms, and credit rating agencies. The Task
Force also has more than 4,000 supporters from 101 jurisdictions aroundthe world.

Task Force members’ locations(size proportional to number of members)
Jurisdictions with TCFD supporters

8

Data updated as of December 2022

9

Demand for Climate-Related Financial Disclosure

Demand for
Climate-Related
Financial Disclosure
Demand for climate-related
disclosure has increased significantly
since the release of the TCFD
recommendations in 2017.
Many private-sector financial
institutions, investors, and others
continue to make progress on
incorporating climate-related
disclosure into their financial
decision-making. For example,
over 615 investors with morethan $60 trillion in assets undermanagement committed to engage
with the world’s largest corporate
greenhouse gas emitters to strengthen
their climate-related disclosuresby implementing the TCFD
recommendations as part of
Climate Action 100+.

In addition, 680+ financial
institutions with more than $130t
in assets have asked 10,000+
companies to disclose via CDP,
which has aligned its questionnaires
with the TCFD recommendations.
Demand for climate-related disclosure
from investors and others is criticallyimportant. In particular, large asset
owners and asset managers sit at
the top of the investment chain and,
therefore, have an important role toplay in influencing the organizations
in which they invest to provide betterclimate-related financial disclosures.

“The ability to quantify climate-related risk differentials
on a forward-looking basis is critical to pricing such risks
into financial institutions’ capital allocation decisions.”

In addition, public-sector leaders
have also noted the importanceof transparency on climate-related
issues within financial markets.
Climate-related risk is increasingly
the subject of new reporting
requirements, such as the European
Non-Financial Reporting Directive
2014/95/EU, stress testing, andregulatory guidance based on the
TCFD recommendations. A numberof national governments and publicsector organizations formallysupport the TCFD. In addition,
several jurisdictions have proposedor passed laws and regulations
requiring disclosure aligned with
the TCFD recommendations.

“We believe that high qualityand decision-relevant climate
disclosures are critical toenabling change and we
support the recommendationsof the Financial Stability Board’s
Taskforce on Climate-Related
Financial Disclosures (TCFD).
We expect companies to reportclimate risks, strategy, policies
and performance in line with
the TCFD disclosure framework.
This should include stresstesting of business models andassets against various climatechange scenarios.”–C anada Post Corporate Pension Plan,
response to the proposed United States
Securities and Exchange Commission rulefor The Enhancement and Standardizationof Climate-Related Disclosures for Investors,
June 2022– Gek Choo Goh, Chair of the NGFS’ Micro-prudential and Supervision workstream and Executive
Director of Banking Department II at the Monetary Authority of Singapore, May 2022

10

11

Climate-Related Risks and Opportunities

Climate-Related Risks
and Opportunities“Climate change presents global markets with risks andopportunities that cannot be ignored, which is why
a framework around climate-related disclosures is so
important. The Task Force brings that framework to thetable, helping investors evaluate the potential risks andrewards of a transition to a lower carbon economy.”

The Task Force identified several categories of climate-related risks andopportunities. These include potential financial impact to assist investors,
and companies consider longer-term strategies and most efficient allocationof capital in light of the potential economic impacts of climate change.

– Michael R. Bloomberg, TCFD Chair and Founder of Bloomberg LP and Bloomberg
Philanthropies, June 2017

Risks

Opportunities

Policy and Legal

Transition• U se of more efficient modes of transport and• C arbon pricing and reporting obligations• M andates on and regulation of existingproduction and distribution processes

Strategic Planning Risk Management

products and services• E xposure to litigation

Resource
Efficiency

Technology• U se of lower-emission sources of energy• U se of supportive policy incentives• U
 se of new technologies
Energy Source • P articipation in carbon market• S ubstitution of existing products and services
with lower emissions options• U nsuccessful investment in new technologies

Financial Impact

Market• D evelopment and/or expansion of low emissions• C hanging customer behavior• U ncertainty in market signals• Increased cost of raw materials

goods and services

Products& Services

Reputation• S hift in consumer preferences• Increased stakeholder concern/negative feedback• S tigmatization of sector

IncomeStatement

Cash Flow
Statement• D evelopment of climate adaption and insurance
risk solutions• D evelopment of new products or services throughR&D and innovation

BalanceSheet• A ccess to new markets• U
 se of public-sector incentives• A ccess to new assets and locations needing
Markets• A
 cute: extreme weather events• C hronic: changing weather patterns and rising

insurance coverage• P articipation in renewable energy programs

mean temperature and sea levels

and adoption of energy-efficiency measures

PhysicalResilience

REVENUES
12• U
 se of recycling• M ove to more efficient buildings• R educed water usage and consumption

EXPENDITURESASSETS& LIABILITIES• R
 esource substitutes/diversification

CAPITAL& FINANCING
13

TCFD Publications

TCFD Publications
The Task Force’s recommendations were published in its
2017 report. Since then, the Task Force has published various
reports and supporting materials to help companies implement
the recommendations and promote advancements in theavailability and quality of climate-related financial disclosure.

Guidance on Specific
Recommendations
Provide additional information on
implementing the recommendations
and include the following:• 2017 Scenario Analysis TechnicalSupplement;• 2020 Guidance on Scenario Analysis for
Non-Financial Companies;• 2
 020 Guidance on Risk Management
Integration and Disclosure; and• 2
 021 Guidance on Metrics, Targets, andTransition Plans.

Status Reports
Provide updates on the state of climaterelated financial disclosure for specificindustries, insights on implementing
the TCFD recommendations, andsummaries of initiatives supporting
TCFD implementation.

Final Recommendations andRecommended Disclosures
Provides details on the following:• the Task Force’s remit from the
Financial Stability Board;• context and background on
the need for climate-related
financial disclosures; and• the TCFD recommendations
and recommended disclosures,
as well as areas of further work.

Implementation Guidance
Provides guidance on the applicationof the recommendations, general
implementation guidance applicable
to all sectors, and supplemental
guidance for certain sectors, including
the following:

The Task Force’s 2017 report, guidance, and recent status reports
are available at fsb-tcfd.org/publications/.

• four financial industries and• four groups of non-financial
companies considered more likely
to be affected financially than others
given their exposure to certaintransition and physical risks.

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15

TCFD Recommendations and Recommended Disclosures

TCFD Recommendations“The work of the TCFD
shows the power ofvoluntary engagementfrom the private
sector and how it cancomplement public
sector regulations.
A remarkableendeavor, the TCFD
has developed global
standards that are
now being used bya significant numberof corporations
around the world.”– Christian Thimann,
TCFD Vice Chair (2015–2021)
and CEO and Chairman of
the Management Board,
Athora Germany (2018–2021),
March 2021

The Task Force’s 2017 report outlines
the TCFD framework for reporting
climate-related financial information.
In its work, the Task Force drew on
member expertise, significant stakeholder
engagement, and existing climaterelated disclosure regimes to develop
a singular, accessible framework forclimate-related financial disclosure. The
recommendations are structured aroundfour thematic areas that represent coreelements of how organizations operate.

Governance
Strategy
RiskManagement

Metrics
andTargets

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17

TCFD Recommendations and Recommended Disclosures

TCFD Recommended
Disclosures
The four recommendations are supported by specific disclosuresorganizations should include in financial filings or other reports to provide
decision-useful information to investors and others.

Strong focus on risks andopportunities related totransition to lower-carbon
economyStrategy

Disclose the organization’s
governance around climate-relatedrisks and opportunities.

Disclose the actual and potential impactsof climate-related risks and opportunities
on the organization’s businesses, strategy,
and financial planning where suchinformation is material.

Recommended Disclosures

Recommended Disclosuresa) D escribe the board’s oversight ofclimate-related risks and opportunities.

a) D escribe the climate-related risks
and opportunities the organization
has identified over the short,medium, and long term.

b) D escribe management’s rolein assessing and managing
climate-related risks and opportunities.

Key Features of Recommendations
Adoptable by
all organizations

Governance

Designed to solicit
decision-useful,forward-looking information
on financial impacts

Disclosure under
the Strategy and Metrics
and Targets recommendations
in financial filings is subject
to a materiality assessment,
although all organizations
are encouraged to disclose
publicly if practicablec) D escribe the resilience of theorganization’s strategy, taking
into consideration different
climate-related scenarios, including
a 2°C or lower scenario.

Risk Management

Metrics and Targets

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

Disclose the metrics and targets
used to assess and manage relevant
climate-related risks and opportunities
where such information is material.

Recommended Disclosures

Recommended Disclosuresa) Describe the organization’s
processes for identifying andassessing climate-related risks.

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

b) Describe the organization’s
processes for managing
climate-related risks.
c) Describe how processes for
identifying, assessing, andmanaging climate-related risks
are integrated into the organization’s
overall risk management.

18

b) D
 escribe the impact of climate-relatedrisks and opportunities on theorganization’s business, strategy,
and financial planning.

b) Disclose Scope 1, Scope 2, and if
appropriate, Scope 3 greenhousegas (GHG) emissions, and therelated risks.
c) Describe the targets used by theorganization to manage climate-relatedrisks and opportunities and performanceagainst targets.
19

TCFD Recommendations and Recommended Disclosures“We see extensive and mounting
evidence that the physical andtransition effects of the climate
crisis are real. In order to reachthe goals of the Paris Agreement
we need to take forceful action –this includes action from
corporations and the private
sector at large. Climate-related
disclosures and the TCFD
recommendations help companies
consider the impact of climatechange and associated mitigation
efforts on their strategies andoperations. A company that
communicates its climate resiliency
to its investors will have acompetitive advantage over thosethat don’t.”– Mary Schapiro, Head of the TCFD Secretariat
and Vice Chair for Global Public Policy
at Bloomberg LP, February 2021

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21

TCFD Guidance

Guidance for All Sectors
The Task Force’s “annex” provides both general and sector-specific guidance
to assist organizations with implementing the TCFD recommendations.
The annex was originally released in 2017 and updated in 2021.
Example of Guidance for All Sectors
Investors and other stakeholders need to understand how climate-related
issues may affect an organization’s businesses, strategy, and financial
planning over the short, medium, and long term. Such information is used
to inform expectations about the future performance of an organization.

Strategy
Disclose the actual and potential impacts of climate-related risks and opportunities on theorganization’s businesses, strategy, and financial planning where such information is material.
Recommended
Disclosure a)

Guidance for All Sectors
Organizations should provide the following information:

Describe theclimate-relatedrisks andopportunities
the organization
has identified
over the short,medium, andlong term.

• a description of what they consider to be the relevant short-, medium-,and long-term time horizons, taking into consideration the useful life of
the organization’s assets or infrastructure and the fact that climate-related
issues often manifest themselves over the medium and longer terms;

To promote more informed investing, lending, and insurance underwriting
decisions, the Task Force recommends all organizations with public debt
or equity implement its recommendations. Because climate-related issues
are relevant for other types of organizations as well, all organizations areencouraged to implement these recommendations.
In particular, implementation by asset managers and asset owners, including
public- and private-sector pension plans, endowments, and foundations,will help their clients and beneficiaries better understand the performanceof their assets, consider the risks of their investments, and make more
informed investment choices.

• a description of the process(es) used to determine which risks andopportunities could have a material financial impact on the organization.
Organizations should consider providing a description of their risks andopportunities by sector and/or geography, as appropriate. In describing
climate-related issues, organizations should refer to Tables A1.1 and A1.2
(pp. 75–76).

Recommended
Disclosure b)

Which Organizations Should Implement the TCFD Recommendations?

• a description of the specific climate-related issues potentially arisingin each time horizon (short, medium, and long term) that could havea material financial impact on the organization; andDescribe theimpact of climaterelated risks andopportunities on
the organization’s
businesses,
strategy, andfinancial planning.

Guidance for All Sectors
Building on recommended disclosure a), organizations should discuss
how identified climate-related issues have affected their businesses,
strategy, and financial planning.
Organizations should consider including the impact on their businesses,
strategy, and financial planning in the following areas:• Products and services• Supply chain and/or value chain• A daptation and mitigation
activities• I nvestment in research anddevelopment• O perations (including typesof operations and locationof facilities)• Acquisitions or divestments• Access to capital

Organizations should describe how climate-related issues serve as an
input to their financial planning process, the time period(s) used, and how
these risks and opportunities are prioritized. Organizations’ disclosures
should reflect a holistic picture of the interdependencies among thefactors that affect their ability to create value over time.
Organizations should describe the impact of climate-related issues on
their financial performance (e.g., revenues, costs) and financial position(e.g., assets, liabilities). If climate-related scenarios were used to informthe organization’s strategy and financial planning, such scenarios should
be described.
Organizations that have made GHG emissions reduction commitments,
operate in jurisdictions that have made such commitments, or haveagreed to meet investor expectations regarding GHG emissions
reductions should describe their plans for transitioning to a low-carbon
economy, which could include GHG emissions targets and specificactivities intended to reduce GHG emissions in their operations and value
chain or to otherwise support the transition.

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23

TCFD Guidance

Supplemental Guidance
for Certain Sectors
In addition to the guidance for organizations in all sectors, supplemental
guidance is available for the following industries and groups:

Financial Sector Industries• Banks• Insurance Companies• Asset Managers• Asset Owners

The financial sector was organized into four
major industries largely based on activities
performed. The activities are lending (banks),
underwriting (insurance companies), asset
management (asset managers), and investing(asset owners).

Non-Financial Groups• Energy• Transportation• Materials & Buildings• A griculture, Food,and Forest Products

The non-financial groups identified by the
Task Force account for the largest proportionof GHG emissions, energy usage, andwater usage.

“It is encouraging to see the increasing number of banks
and asset managers that are systematically including TCFD
recommendations in their risk and opportunities analysis.”– Denise Pavarina, TCFD Vice Chair and Senior Advisor, Aggrego Consultores,
February 2021

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25

TCFD Guidance

Guidance on Metrics, Targets,
and Transition Plans

Risk Management Integration
and DisclosureThis guidance is intended to support companies in disclosing decision-usefulclimate-related metrics, targets, and transition plan information and linking
those disclosures with estimates of financial impacts.

This guidance is aimed at companies that are interested in
integrating climate-related risks into their existing risk management
processes and disclosing information on their risk management
processes in alignment with the Task Force’s recommendations.

Focus of the Guidance:

Initial Steps for Integration

Unique Characteristics• R ecent developments aroundclimate-related metrics and users’
increasing focus on companies’
plans for transitioning to a lowcarbon economy

The guidance explores thepracticalities of integrating climaterelated risks into existing risk
management processes and outlines
a set of high-level, initial steps
intended to support companies
in identifying importantconsiderations for integration.

The guidance describes the uniquecharacteristics of climate-relatedrisks that are important to consider
when integrating such risks into
existing processes. The following
characteristics of climate-relatedrisks are discussed:• A set of cross-industry, climaterelated metric categories that
the Task Force believes allorganizations can disclose

1

2

Key Points Addressed:• Information on selecting anddisclosing metrics, as well as a setof cross-industry, climate-related
metric categories• Information on selecting anddisclosing climate-related targets, aswell as details on the role of scenario
analysis in determining targets

26• How organizations might include
aspects of their transition plansin their climate-related financial
disclosures• How climate-related metrics, targets,and information from transition
plans provide useful information
for understanding the impact
of climate-related issues on anorganization’s financial performanceand position

3

Understand Climate Change
Concepts
Ensure general understanding acrossthe company of climate change
concepts and potential impacts.
Identify Processes and Functions
Identify risk management processes
and elements to be adjusted forclimate-related risk and functions
responsible for those processes
and elements.
Update Risk Taxonomy
Incorporate climate-related risks
into existing risk taxonomy andrisk inventory.

4

Adjust Risk Management Elements
Adapt existing risk management
processes and elements.

5Disclose Risk Management
Processes• different effects based on
geography and activities;• longer time horizons andlong-lived effects;• novel and uncertain nature;• changing magnitude andnonlinear dynamics; and• complex relationships andsystemic effects.
Disclosure Examples
The guidance also describes featuresof decision-useful risk management
disclosures, as well as examples ofcompanies’ disclosures.

27

TCFD Guidance

Guidance on
Scenario Analysis
The Task Force developed two reports to provide guidance on scenario analysis.
The technical supplement was published in 2017 to provide an additional levelof detail for companies interested in using climate-related scenarios as partof their efforts to implement the Task Force’s recommendations. The second
guidance, published in 2020, is intended to assist non-financial companies
considering scenario analysis.

Focus of Technical Supplement:

Focus of Guidance:• C onsiderations for applying
scenario analysis• Practical, process-oriented ways
for non-financial companies to use
climate-related scenario analysis• A nalytical choices involvedin scenario analysis• D escription of climate-related
scenarios for transition andphysical risks• A dditional resources forunderstanding and conducting
climate-related scenarios– Establishing organizational
structures and processes to
conduct scenario analysis– Developing scenarios, including
scenario types and structuralelements• Ideas for disclosing the resilienceof companies’ strategies to different
climate-related scenarios– Applying scenario analysis
to strategy formulation toenhance resilience– Addressing challenges of
disclosure around strategy
and scenarios– Demonstrating strategy
resilience in disclosures28

29

Implementing the TCFD Recommendations

Implementing the
TCFD Recommendations

Managing Climate-Related Issues
Building appropriate internal processes
to manage climate-related issues,
as well as collecting necessary data
and metrics.
Existing and Future
Reporting Requirements
Reviewing requirements forfinancial and non-financial reportingand considering whether additional
requirements will likely be released.
Reporting Capabilities
Developing processes andcapacity to report information
under the TCFD recommendations —subject to appropriate internal
governance processes and in linewith regulatory requirements.

30

Materiality
Taking the unique longer-term
impacts and challenges of climatechange into account when assessing
materiality. All organizations areencouraged to report in line with theGovernance and Risk Management
recommendations, as well as report
Scope 1 and Scope 2 GHG emissions
regardless of materiality.
Placement
Determining the appropriate
placement of disclosures — inmainstream (i.e., public) annual
financial filings as recommended
by the TCFD or other official
company reports.
Ongoing Collaboration
and Improvement
Organizations have expressed thatparticipation in TCFD working groups,
workshops, or even knowledgesharing with peers and investors has
been helpful in advancing climaterelated disclosure.

Broad understanding of theconcentration of carbon-related
assets in the financial systemand the financial systems,
exposure to climate-related risks.

Greater adoption, further
development of information 
provided (e.g., metrics andscenario analysis), and greatermaturity in using information.

Adoption Volume

Organizations are now able to draw on a wealth of examples and resourcesto accelerate their disclosures aligned with the TCFD recommendations. Once
initial climate-related reporting is released, companies are encouraged tocontinue improving and developing their disclosures. Implementing the TCFD
recommendations generally includes the following considerations:

Illustrative Implementation Path

Organizations begin todisclose in financial filings.

Final TCFD 
Report released.

More complete, consistent, and
comparable information formarketparticipants, increasedtransparency, and appropriate
pricing of climate-related risks
and opportunities.

Climate-related issues viewed
as mainstream business andinvestment considerations byboth users and preparers.

Companies already reporting underother frameworks implement the
Task Force’s recommendations.
Others consider climate-related
issues within their businesses.

Five-Year Timeframe

Fundamental Principles for Effective Disclosures

1

Disclosures should represent relevant information.

2

Disclosures should be specific and complete.

3

Disclosures should be clear, balanced, and understandable.

4Disclosures should be clear over time.

5

Disclosures should be comparable among companies within a sector,
industry, or portfolio.

6

Disclosures should be reliable, verifiable, and objective.

7

Disclosures should be provided on a timely basis.
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Implementing the TCFD Recommendations

Benefitsof Implementation
Some of the potential benefits associated with implementing the Task Force’s
recommendations include:• easier or better access to capitalby increasing investors’ andlenders’ confidence that thecompany’s climate-related risks
are appropriately assessed andmanaged;• increased awareness andunderstanding of climate-relatedrisks and opportunities within thecompany, resulting in better risk
management and more informed
strategic planning; and• more effectively meeting existing
disclosure requirements toreport material informationin financial filings;• proactively addressing investors’
demand for climate-related
information in a framework thatinvestors are increasingly asking
for, which could ultimately reduce
the number of climate-related
information requests received.

A Note on Climate-Related Resilience and Scenario Analysis:
The TCFD recommends organizations disclose information about theresilience of their strategies based on the outcomes of different
climate-related scenarios — where such information is material.
The TCFD believes climate-related scenario analysis is an important anduseful tool for organizations to use to understand the strategic implicationsof climate-related risks and opportunities, regardless of materiality. In
particular, climate-related scenario analysis can help organizations identify
indicators to monitor the external environment, which may provide early
warning to reassess and adjust strategies.

“The TCFD disclosure requirements have really helped us drive
better quality thinking around the impact that climate change
could have on our business as well as our impact on climatechange, it has also caused us to bring together our technicalspecialists, our operators and our finance teams to brainstorm
these issues which has strengthened the rigour of our thinking,our understanding of the implications but most importantly
the identification of key actions.”– Graeme Pitkethly, TCFD Vice Chair and Chief Financial Officer, Unilever, March 2021

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33

Implementing the TCFD Recommendations

Select Resourceson the TCFD
Recommendations

TCFD Website
Further information on the TCFD
is available on our website at
fsb-tcfd.org. The TCFD website
includes all the TCFD’s publications,
including the final recommendations,
implementation guidance, reporttranslations, recent status reports,
examples of disclosure, anda series of workshops on TCFD
implementation.
TCFD Knowledge Hub
The TCFD Knowledge Hub hosts over
700 resources that help companies
identify, analyze, and reportclimate-related financial information.
The Hub was created by the Climate
Disclosure Standards Board(CDSB) and is now managed
by CDP. Resources on the Hub
support the adoption of the
TCFD recommendations and thedevelopment of high-quality,
consistent, and comparable
climate-related financial disclosures.
WBCSD Preparer Forums
The World Business Council for
Sustainable Development (WBCSD)
has worked with companies inseveral industries, such as oil andgas, electric utilities, transportation,and chemicals, in forums focusedon implementation of the TCFD
recommendations. The reportsof these “preparer forums” areavailable on the WBCSD website.

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UNEP FI Reports on Climate-Related
Risk and Scenario Analysis
The United Nations Environment
Programme Finance Initiative(UNEP FI) has led pilot projects
on TCFD implementation for
financial institutions. All reports
and additional resources areavailable at the UNEP Fl website.
Laws, Regulations, and Standards
As support from the private sector
has grown, governments andjurisdictions around the world, as wellas international standard setters andstock exchanges, have begun to codify
aspects of the TCFD recommendations
into laws, regulations, and/or
standards. As an example, theInternational Sustainability Standards
Board was established by theInternational Financial ReportingStandards Foundation (IFRS) to deliver
a comprehensive global baselineof sustainability-related disclosure
standards and intends to use the TCFD
and other frameworks as a basis for
its work. More information can befound on the IFRS website.
Additional Resources
Many other organizations — suchas the UN Principles for Responsible
Investing and CDP — have worked toalign with the TCFD recommendations
and have released various resources
to assist organizations with
implementing and using climaterelated financial disclosure.
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TCFD Milestones

TCFD Milestones“[ T]he TCFD has generated a step change in both
the demand for and supply of climate reporting.
The demand for TCFD disclosure is now enormous.”

Since the release of the TCFD recommendations, support for the
TCFD has increased rapidly. The TCFD’s 4,000+ supporting organizations
span the public and private sectors and represent over 70 industriesin 101 jurisdictions, including the governments of 11 countries.

The FSB announces
the establishment of
the TCFD.

The Task Forcereleases its disclosure
recommendations in June
2017, with the support ofover 100 CEOs.

The FSB announces
members of the
Task Force.

The Government ofJapan holds the firstever TCFD Summit,
organized by the
TCFD Consortium.

The Task Forcereleases its firststatus report andannounces over
500 supporters.

– Mark Carney, UN Special Envoy on Climate Action and Finance,
Governor of the Bank of England (2013–2020), FSB Chair (2011–2018),
September 2019

G20 pledges to promote
implementation of
disclosure requirements
based on the TCFD
framework in line withdomestic regulatory
frameworks, a monthafter the G7 made asimilar announcement.

The Task Forcereleases guidanceon scenario
analysis and risk
management, as
well as its third
status report.

The IFRS announces
the formation of
the International
Sustainability
Standards Board,which intends to use
the TCFD and otherframeworks as a basis
for its work.

The Task Force launches
its fourth status report,
guidance on metrics,
targets, and transition
plans, and revised
implementation guidance.

European Financial
Reporting Advisory
Group (EFRAG) launchesa public consultationon the draft European
Sustainable ReportingStandards, which include
disclosure requirements
corresponding to the
TCFD’s recommendations.

The International
Sustainability
Standards Board (ISSB)
publishes two exposure
draft standards; bothbuild upon the TCFD
recommendations.

The number of TCFD
supporters surpasses
4,000 organizations
from 100+ jurisdictions
with a combined
market capitalizationof $26 trillion.

The Task Force launches its
fifth status report and foundthe percent of companies
disclosing TCFD-aligned
information steadily
increased since 2017.

How you can support TCFD:
Visit fsb-tcfd.org/support-tcfd/
and submit the form to contact the TCFD or become a supporter.
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37

Overview of the TCFD 2022 Status Report

International Developments
on Climate-Related Disclosure
Since 2017, several jurisdictions and standards setters have drawn
from the TCFD recommendations in developing climate-related
disclosure requirements, proposals, or standards.

“…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 Climate-related Financial Disclosures (TCFD)
framework, in line with domestic regulatory frameworks.
Investors need high quality, comparable and reliable information
on climate risks…”– G7 Finance Ministers and Central Bank, Governors Communique, June 2021

Developments in Various Jurisdictions1,2
International and Regional Standards
International Sustainability
Standards Board (ISSB)March 2022 exposure drafts onsustainability-related disclosure
standards and climate-related
disclosure standards

Final Disclosure Requirements
European Union
European Financial Reporting
Advisory Group (EFRAG) April 2022
draft EU Sustainability ReportingStandards

BrazilSecurities and Exchange
Commission, Central Bank of Brazil
Egypt
Egyptian Financial Regulatory
Authority
New Zealand
New Zealand Government

Top Five Countries by
Number of SupportersJapan(1,070)
United Kingdom(467)
United States(440)
Australia(161)
France(139)“…a more substantive uptake of therecommendations of the Task Force on
Climate-related Financial Disclosures (TCFD)
is essential. This will help companies embeda broadly accepted framework for reportingon the financial risks associated withclimate change into their governance andrisk management frameworks, as well as
in communications with stakeholders.”– A shley Alder, Former CEO, Securities and Futures Commissionof Hong Kong and Chair, IOSCO, February 2021

Singapore
Singapore Exchange
Switzerland
Financial Market Supervisory
Authority
United Kingdom
Parliament, Financial Conduct
Authority

Proposed Disclosure Requirements
CanadaCanadian Securities Administrators
United States
Securities and Exchange
Commission

European Union
European Commission,
Parliament and Council
Switzerland
Federal Council

TCFD-Aligned Guidance or Other Support
Other jurisdictions have referenced the TCFD recommendations in guidance or statements
to encourage climate-related disclosure, including official entities in Australia, Denmark,Germany, Hong Kong, India, Ireland, Italy, Japan, Malaysia, Norway, Thailand, Russia, South
Africa, and South Korea.

1 T hese final and proposed requirements vary in their scope of coverage, time frame, and type of report addressed.
2 T his is an illustrative list of recent jurisdictional events and is not intended as an exhaustive list.

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Source: 2022 TCFD Status Report39Overview of the TCFD 2022 Status Report

Status Report Key Findings
2022 Disclosure Review

Asset Managers and Owners
Reporting Practices

Download the2022 Status Report

TCFD Implementationand Use Survey

80% of companies reviewed disclosed
in line with at least one of the TCFD
recommended disclosures; however,more urgent progress is needed.
Only 4% disclosed in line with all 11
recommended disclosures and onlyaround 40% disclosed in line with atleast five.

A majority of asset managers andasset owners report to their clientsand beneficiaries. Over 60% of asset
managers and over 75% of asset owners
surveyed indicated they currently
report climate-related information totheir clients and beneficiaries.

The availability and quality ofclimate-related financial disclosures
has increased since June 2017.
Ninety-five percent (95%) of survey
respondents saw an increase in theavailability of climate-related financial
disclosures since the release of the
TCFD recommendations, with 88% of
respondents citing improvements inthe quality of disclosures.

Since fiscal year 2019, all regions haveincreased their levels of disclosure.
In particular, the average levels of
disclosure grew by 11 percentage
points in the Asia-Pacific region, by
12 percentage points in North America,and by 23 percentage points in Europe.

Nearly 50% of asset managers
and 75% of asset owners reported
information aligned with at least fiveof the 11 recommended disclosures.
10% of asset managers and 36% ofasset owners indicated they report on
all 11 recommended disclosures.

Investors and others use disclosuresin decision-making and pricing. Basedon the TCFD survey, 90% of investors
and other users incorporate climaterelated financial disclosures infinancial decision-making, and 66% of
these indicated such disclosures factor
into the way they price financial assets.

“When companies disclose
clear, consistent, and accurate
information on the risks they facefrom climate change, investors andbusiness leaders can make more
informed and sustainable financial
decisions. That strengthens ourglobal economy, improves health,and helps address the climate
crisis. The Task Force has had an
exceptional year in rallying global
support for climate risk reporting— but we still have a long way
to go. As governments andbusinesses around the world workto accelerate the transition to aclean energy economy, they should
continue to draw on the TCFD
recommendations as a critical
tool in their efforts.”– Michael R. Bloomberg, TCFD Chair
and Founder of Bloomberg LP and
Bloomberg Philanthropies,
September 2021

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41

International Support for the TCFD

International Support
for the TCFD
Several international initiatives support incorporating the TCFD
recommendations into climate-related reporting standards“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 Climate-related Financial Disclosures (TCFD)
framework, in line with domestic regulatory frameworks.”“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 linewith domestic regulatory frameworks, to pave the way for future
global coordination efforts, taking into account jurisdictions’circumstances, aimed at developing a baseline global reporting
standard. To that aim, we welcome the work programme of
the International Financial Reporting Standards Foundation
to develop a baseline global reporting standard under robust
governance and public oversight, building upon the TCFD
framework and the work of sustainability standard-setters,
involving them and consulting with a wide range of stakeholders
to foster global best practices. We welcome the FSB roadmap foraddressing financial risks from climate change.”

The Trustees’ proposed sustainability standards board “would
build upon the well-established work of the Financial Stability
Board’s Task Force on Climate‑related Financial Disclosures…”“The FSB strongly encourages national or regional
authorities that are developing requirements or guidancefor climate-related disclosures to consider using the TCFD
recommendations as the basis.”42“The TCFD recommendations
have gained enormous
traction over the years... but
the exercise now is reaching
the limits of what can beachieved through a purely
industry-led and voluntary
framework. […] The time hascome to take it to the nextlevel, and the next level, in ourview, is the development of the
global minimum standard.”– Klaas Knot, Chair of the FSB and Presidentof De Nederlandsche Bank, November 2021

“IOSCO welcomes… a prototype for an approach to climaterelated disclosures that builds on the recommendations of the
Task Force of Climate-related Financial Disclosures.”“The Commission supports initiatives by the G20, the G7, theFinancial Stability Board and others to generate international
commitment to develop a baseline of global sustainability
reporting standards that would build on the work of the Task
Force on Climate-related Financial Disclosures.”
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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, butdoes not guarantee its accuracy. Copyright 2022 The Task Force on Climate-related Financial Disclosures.