TCFD WORKSHOP
Session 1 - Fundamentals and overview of TCFD

February 2022

TCFD Series of Workshops
Session1

Fundamentals and Overview of TCFD

2

TCFD Recommendation:
Governance3

TCFD Recommendation:
Strategy

4

TCFD Recommendation:
Risk Management

5

TCFD Recommendation:
Metrics & Targets

This session

2

Contents
Fundamentals of climate-related risks and opportunities

4

Introduction to the TCFD

15

Overview of the TCFD recommendations

21

Implementation of the TCFD recommendations

28

Q&A

34

Appendix35

Fundamentals of climate-related risks
and opportunities

4Impacts of Climate Change

Urgent and unprecedented changes are needed to meet the goals of the Paris Agreement
Climate Change As an Economic Disruptor

According to the Intergovernmental Panel on Climate
Change, limiting the global averagetemperature to a maximum of
1.5°C “require[s] rapid and farreaching transitions in energy, land,urban and infrastructure [systems](including transport and buildings),
and industrial systems.”

The figure above illustrates the level of impact and risk on people, economies, and ecosystems associated with global
average temperature increases, with four of the five risk categories (on X-axis) having increased in the last decade.
Reducing global greenhouse gas emissions and accelerating the transition to a lower-carbon economy could result in
disruptive changes across economic sectors and regions in the near term.
Now more than ever it is critical for companies to consider the impact of climate change and associated mitigation andadaptation efforts on their strategies and operations and disclose climate-related information.
Sources
TCFD, Recommendations of the Task Force on Climate-related Financial Disclosures, June 2017
TCFD, 2019 Status Report, 2019
IPCC, Summary for Policymakers: Global Warming of 1.5°C, October 20185

Impacts of Climate Change (continued)

Climate change has potential financial implications for companies across all sectors
What are the Financial Implications of Climate Change?
Climate change poses significant financial challenges and opportunities:• Transition to a lower-carbon economy  potential to generate new investment opportunities.
• Risk-return profile  potential to change significantly for companies exposed to climate-relatedrisks as they may be more affected by physical impacts of climate change, climate policy, and newtechnologies.
The financial crisis of 2007-2008 resulted in increased demand for transparency from companies on
their governance structures, strategies, and risk management practices, to provide the context in which
financial results are achieved.
Critical for companies to consider the impact of climate change and disclose related material
information. Companies that invest in activities that may not be viable in the longer term:• may be less resilient to risks related to climate change and• their investors may experience lower financial returns.
Investors need better information on how companies—across a wide range of sectors—have preparedor are preparing for a lower-carbon economy. Those companies that meet this need may have acompetitive advantage over others.
Sources
TCFD, Recommendations of the Task Force on Climate-related Financial Disclosures, 2017
TCFD, 2019 Status Report, 20196

Impacts of Climate Change (continued)

Climate action failure and its consequences, including extreme weather, environmental damage,and biodiversity loss, are recognized as several of the top risks globally
Rising Importance of Environmental Threats
Trend in top five risks in terms of likelihood, 2015-2021

Environmental

Technological

Geopolitical

Economic

Societal

2015

2016

2017

2018

2019

2020

2021

Interstate
conflict

Involuntary
migration

Extremeweather

Extremeweather

Extremeweather

Extremeweather

Extremeweather

Extremeweather

Extremeweather

Involuntary
migration

Naturaldisasters

Climate action
failureClimate action
failureClimate action
failureFailure ofnational
governance

Climate action
failureNaturaldisasters

Cyberattacks

Naturaldisasters

Naturaldisasters

Humanenvironmental
damageState collapse orcrisisInterstate
conflict

Terrorist attacks

Data fraud ortheft

Data fraud ortheft

Biodiversity loss

Infectious
diseases

Unemployment

Naturalcatastrophes

Data fraud ortheft

Climate action
failureCyberattacks

Human-madeenvironmental
disasters

Biodiversity loss

Note: The top 5 risks for each year presented in this chart were identified the year prior through the annual World Economic Forum Global Risks
Perception Survey. These surveys were conducted among the World Economic Forum’s multi-stakeholder communities, members of the Institute of Risk
Management since 2015, and the professional networks of its Advisory Board since 2016.
Source: WEF: Global Risks Report 2021

7

Climate-Related Risks

On one hand, climate change exposes companies to climate-related risks, which include physicalrisks and transition risks
Examples of Climate-Related Risks (Non Exhaustive)
Acute• Increased severity of extreme weather events such as cyclones and floods
Physical Risks

Transition Risks

Chronic• Changing weather patterns and rising mean temperature and sea levels
Policy and Legal• Increased pricing of GHG emissions• Enhanced emissions-reporting, obligations• Mandates on and regulation of existing products and services• Exposure to litigation
Technology• Substitution of existing products and services with lower emissions options• Unsuccessful investment in new technologies• Costs to transition to lower emissions technology
Market• Changing customer behavior• Uncertainty in market signals• Increased cost of raw materials
Reputation• Shifts in consumer preferences• Stigmatization of sector• Increased stakeholder concern or negative stakeholder feedback

Source: TCFD, Recommendations of the Task Force on Climate-related Financial Disclosures, 20178

Climate-Related Risks (continued)

Physical and transition climate-related risks will vary under different temperature rise scenarios
CO2 Emission Trajectory and Corresponding Temperature Rise from Pre-Industrial Levels
45
 3°C

Non-cumulative emissions (Gt CO2)

40
35
30

More physical risk
Higher temperature rise
scenarios

 2.5°C

25
20
15

Current Policies
NDCs

10

Below 2°C

 1.7°C

Delayed transition

5

Divergent Net ZeroNet Zero 2050

0
2015

2020

2025

2030

2035

2040

2045

 1.8°C 1.5°C 1.5°C

2050

Lower temperature rise
scenariosMore transition risk

Note: These are potential temperature rise scenarios, which are not predictions of the future
Source: IIASA NGFS Climate Scenarios database, REMIND model; End of century warming outcomes shown.

9

Climate-Related Risks (continued)

Climate-related risks have unique characteristics…

Different effects based on geography and activities
Longer time horizons and long-lived effects
Novel and uncertain nature
Changing magnitude and nonlinear dynamics
Complex relationships and systemic, non-diversifiable effects

Source: TCFD, Guidance on Risk Management Integration and Disclosure, 202010

Climate-Related Risk and Financial Impact…and expose companies to potential financial impacts

Examples of Climate-Related Risks and Potential Financial Impact
Risk

Potential Financial Impact

Increased severity of extreme weather (e.g., droughts)

Reduced revenue from decreased production capacity

Rising sea levels

Increased insurance premiums in high-risk locations

Increased pricing of GHG emissions

Increased operating costs

Mandates on and regulation of products and services

Write-offs and asset impairment

Shift in consumer preferences toward low carbon options

Reduced revenue from decreased demand for products“Risk” refers to the potential for negative or adverse consequences.

Source: TCFD, Recommendations of the Task Force on Climate-related Financial Disclosures, 201711

Climate-Related Opportunities

On the other hand, companies can identify climate-related opportunities in the transition to net
zero…
Examples of Climate-Related Opportunities (Non Exhaustive)

Resource Efficiency

•
•
•
•

Use of more efficient modes of transport and production and distribution processes
Use of recycling
Move to more efficient buildings
Reduced water usage and consumption

Energy Source

•
•
•
•

Use of lower-emission sources of energy
Use of supportive policy incentives
Use of new technologies
Participation in carbon market

Products & Services

Markets

Resilience• Development and/or expansion of low emission goods and services• Development of climate adaption and insurance risk solutions• Development of new products or services through R&D and innovation• Access to new markets• Use of public-sector incentives• Access to new assets and locations needing insurance coverage• Participation in renewable energy programs and adoption of energy-efficiency measures• Resource substitutes/diversification

Source: TCFD, Recommendations of the Task Force on Climate-related Financial Disclosures, 201712

Climate-Related Opportunities and Financial Impact… which can lead to potential positive financial impacts

Examples of Climate-Related Opportunities and Potential Financial Impact
Opportunity

Potential Financial Impact

Move to more efficient buildings

Increased value of fixed assets (e.g., highly rated energy efficient buildings)

Use of lower-emission sources of energy

Reduced exposure to future fossil fuel price increases as well as GHG
emissions, and therefore less sensitivity to changes in cost of carbon

Development and/or expansion of low
emission goods and services

Increased revenue through demand for lower emissions products andservices

Access to new markets

Increased revenues through access to new and emerging markets (e.g.,partnerships with governments, development banks)

Resource substitutes/diversification

Increased reliability of supply chain and ability to operate under various
conditions“Opportunities” refer to the potential for positive or favorable consequences.

Source: TCFD, Recommendations of the Task Force on Climate-related Financial Disclosures , 201713

Discussion question:• What is a financial impact from a
climate-related issue that yourcompany might experience?

14

Introduction to the TCFD

15

Introduction

The Task Force on Climate-related Financial Disclosures was created in late 2015 to help identify
information needed by the financial sector to appropriately assess and price climate-related risks
The G20 Finance Ministers and Central Bank Governors
asked the Financial Stability Board (FSB) to review how
the financial sector can take account of climate-related
issues.
In response, the FSB established the Task Force on
Climate-related Financial Disclosures (TCFD) to develop
recommendations for more effective climate-related
disclosures.

“The FSB is asking the Task Force on Climaterelated Financial Disclosures to makerecommendations for consistent company
disclosures that will help financial market
participants understand their climate-related risks.
Access to high quality financial information willallow market participants and policymakers tounderstand and better manage those risks, which
are likely to grow with time.”- Mark Carney (FSB Chair), Speaking at the COP21 Paris Climate
Change Conference, December 2015 (emphasis added)

Industry Led and Geographically Diverse Task ForceThe Task Force’s 32 international members, led by
Chair Michael Bloomberg, include providers of capital,
insurers, large non-financial companies, accounting
and consulting firms, and credit rating agencies.

Experts fromthe Financial
SectorExperts from
Non-Financial
Sectors

Other
Experts

Note: 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.

16Introduction (continued)

Better disclosure of the financial impacts of climate-related risks and opportunities on a company isa key goal of the Task Force’s work

Source: TCFD, Recommendations of the Task Force on Climate-related Financial Disclosures, 201717

Reach of the TCFD

The momentum behind TCFD has grown globally since its establishment, with over 3,000 supportersfrom around the world
Number of TCFD Supporters

TCFD Supporter Market Coverage
USD, Trillions

Financial Institutions

Company Combined Market Capitalization

Non Financial Institutions
Other TCFD Supporters

+445%
3,004

1,292

$27tn

$29tn

2021

2022 YTD$209tn$209tn

2021

2022 YTD

3,113

1,318

$8tn

$9tn

2018

2019

$13tn

2020

1,744

Financial Institution Assets
800
1,003
571

449

294

369

193
84

185

2018

2019

953

992

$150tn$100tn

598
759

803

2021

2022 YTD$118tn

346
2020

2018

2019

2020

Note: As of February 9th, 2022. About 500 additional companies declared their support for the TCFD since the launch of the 2021 status report. The
current number of supporters is continuously growing and can be found at fsb-tcfd.org/support-tcfd

18

Reach of the TCFD (continued)

In addition, various jurisdictions are taking steps to encourage or mandate TCFD-aligned disclosure
April 2021: The European Commission issued aproposal calling for the development ofsustainability reporting standards that take into
account existing frameworks including the TCFD

June 2021: Switzerland's Financial Market
Supervisory Authority amended disclosure rules
for banks and insurers to include climaterelated financial risks, based on TCFD

October 2021:1 The
Canadian Securities
Administrators proposed
to make climate change
disclosures mandatory for
public companies, largely
consistent with the TCFD
recommendations
July 2021: The U.S. Securities
and Exchange Commission(SEC) Chair Gensler announced
the SEC's intention to develop
a climate risk disclosure rule
proposal, drawing from the
TCFD framework as well asother standard-setters

Legend450+

2020-2021: Several
UK regulators issued
rules and proposals
for TCFD-aligned
disclosure
August 2021:
Singapore Exchange
Regulation proposed aroad map for mandatory
TCFD-aligned disclosure

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

449–350 349–250 249–150 149–100

99–50

49–25

April 2021: Australian Prudential
Regulatory Authority publishes
TCFD-aligned draft guidance onmanaging climate risks

June 2021: The Tokyo
Stock Exchange issued arevised Corporate
Governance Code,which now indicatescertain companies
should enhance
disclosure based on
TCFD recommendations
December 2020: The
Hong Kong Monetary
Authority issued draft
guidance indicating
authorized institutions
should make TCFDaligned disclosures
October 2021:
New Zealand passed abill to require
mandatory TCFDaligned disclosure forlarge listed issuers andfinancial institutions<25

Number of Supporters
1. The descriptions for Canada and New Zealand have been updated since the release of the 2021 status report to reflect new developments in bothjurisdictions. The description for the U.S. was added since the release of the 2021 status report.

19

Discussion questions:• How did you come across the TCFD?
• How could climate-related
disclosure be beneficial for yourcompany?

20

Overview of the TCFD
recommendations

21

TCFD Recommendations

The Task Force’s work is a solution by the market for the market
In developing its 2017 recommendations, the Task Force:• Considered the challenges and benefits of disclosure around climate-relatedrisks and opportunities• Engaged in significant outreach and consultation with users and preparers of
disclosures and other stakeholders, including two public consultations,individual discussions and focus groups with industry, webinars, and outreach
events• Sought to develop a decision-useful framework to align and supplement
existing disclosure and reporting frameworks• Emphasized disclosure of the financial impacts of climate-related risks andopportunities on a company (rather than a company’s impact on environment)2017 Recommendations• The TCFD framework is intended to be a focal point for harmonizing
disclosures, and a roadmap for areas where additional work may be
warranted by others

22Overview of the TCFD Recommendations

The Task Force developed four widely-adoptable recommendations on climate-related financial
disclosures, published in June 2017
Core Elements of the TCFD Recommendations
Governance
Governance

Strategy
RiskManagement

Metrics
and Targets

Disclose the company’s governance around climate-relatedrisks and opportunities
Strategy
Disclose the actual and potential impacts of climate-relatedrisks and opportunities on the company’s businesses, strategy,
and financial planning
Risk Management
Disclose the processes used by the company to identify,
assess, and manage climate-related risks
Metrics and Targets
Disclose the metrics and targets used to assess and manage
relevant climate-related risks and opportunities

Source: TCFD, Recommendations of the Task Force on Climate-related Financial Disclosures, 201723

TCFD Recommended Disclosures

The Task Force developed 11 recommended disclosures across the four recommendations
Governance

Strategy

Risk Management

Metrics and Targets

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

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

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

Disclose the metrics and targets
used to assess and manage
relevant climate-related risks andopportunities where suchinformation is material.

Recommended Disclosures

Recommended Disclosures

Recommended Disclosures

Recommended Disclosuresa) Describe the board’s oversightof climate-related risks andopportunities.

a) Describe the climate-relatedrisks and opportunities thecompany has identified over the
short, medium, and long term.

a) Describe the company’s
processes for identifying andassessing climate-related risks.

a) Disclose the metrics used by thecompany to assess climaterelated risks and opportunities
in line with its strategy and risk
management process.

b) Describe management’s role inassessing and managing
climate-related risks andopportunities.

b) Describe the impact of climaterelated risks and opportunities
on the company’s businesses,
strategy, and financial planning.

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

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

c) Describe the resilience of thecompany’s strategy, taking into
consideration different climaterelated scenarios, including a
2°C or lower scenario.

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

c) Describe the targets used by
the company to manage
climate-related risks andopportunities and performanceagainst targets.

Source: TCFD, Recommendations of the Task Force on Climate-related Financial Disclosures, 201724

Overview of TCFD publications

Since 2017, TCFD has released a number of additional reports and guidance to measure progress
and aid implementation
Final
Recommendations
and Recommended
Disclosures

Provides details on the following:• Context and background on the need for climate-related financial disclosures• The Task Force’s remit from the Financial Stability Board• TCFD general framework, including recommendations and recommended disclosures
2017 Report

Implementation
Guidance

See next page

Provides guidance on the application of the recommendations as well as implementation guidance
for the following:• All sectors• Four financial industries• Four groups of non-financial companies the Task Force considers more likely to be affectedfinancially than others given their exposure to certain transition and physical risks
2021 Implementation
Guidance (Annex)

Additional
Supporting Materials

2017 Scenario Analysis 2020 Guidance on Risk Management 2020 Guidance on Scenario Analysis
Technical Supplement
Integration and Disclosure
for Non-Financial Companies

Status Reports

2018 Status Report2019 Status Report2020 Status Report

2021 Guidance on Metrics,
Targets, and Transition Plans
2021 Status Report

Note: Visit fsb-tcfd.org/publications to access all of the Task Force’s reports, guidance, and other materials.

25

Focus on the Implementation Guidance

The Implementation Guidance provides guidance for all sectors and supplemental information for
four financial industries and four groups of non-financial companies
Guidance for Financial Industries and Non-Financial Groups
Governancea)b)Strategy
a)

b)

c)

Risk
Management

Metrics andTargets

a)

a)

b)

c)

b)

c)

Guidance for All Sectors
All

Non-Financial Groups

Financial Industries

Supplemental GuidanceBanks
Insurance Companies
Asset Owners
Asset Managers
EnergyTransportation
Materials and Buildings
Ag., Food, and Forest Products

Note: The boxes represent guidance for the corresponding recommended disclosure.
Source: TCFD, Annex : Implementing the Recommendations of the Task Force on Climate-related Financial Disclosures , 2021

26

Discussion question:• Do the four core categories of therecommendations resonate withhow your company operates?

27

Implementation of the
TCFD recommendations28

Benefits of TCFD Implementation

There are multiple benefits of implementing the TCFD recommendations

Improve access to capital by increasing investors’ and lenders’ confidence that the company’s
climate-related risks are appropriately assessed and managed

More effectively meet existing disclosure requirements to report material information in
financial filings

Increase awareness and understanding of climate-related risks and opportunities within thecompany resulting in better risk management and more informed strategic planning
Address investors’ demand for climate-related information in a framework that investors are
increasingly asking for, which could ultimately reduce the number of climate-related information
requests received

Source: TCFD, TCFD Overview Booklet, March 2021, p. 28.

29

Principles for Effective Disclosure

To help achieve high-quality disclosures, the Task Force recommends that companies consider
seven principles for effective disclosure
Disclosures Should:

1

Represent relevant information2

Be specific and complete3

Be clear, balanced, and understandable4

Be consistent over time5

Be comparable among companies within a sector industry or portfolio

6

Be reliable, verifiable, and objective

7

Be provided on a timely basis
The 2017 report also provides more information on these principles.

Source: TCFD, Recommendations of the Task Force on Climate-related Financial Disclosures, 2017, Appendix 3, pp. 51-53

30

Location of Disclosure

The Task Force recommends that information on climate-related issues be disclosed in a company’s
annual financial filings or other official company reports
Location of Disclosure for Task Force Recommendations
Legend:Governance

Strategy

Risk Management

Metrics and Targets

Financial Filing

Other Annual
Report*Information is deemed Material
Information is deemed not Material
Large non-financial companies in high-emitting industries1* Other annual reports include regulatory or official company reports that are issued at least annually.

Companies should determine materiality for climate-related issues consistent with how they determine the materialityof other information included in their annual financial filings. The Task Force cautions companies against prematurely
concluding that climate-related risks and opportunities are not material based on perceptions of the longer-term natureof some climate-related risks.
Companies need to make financial disclosures in accordance with their national disclosure requirements. If certain
elements of the recommendations are incompatible with national disclosure requirements for financial filings,
companies are encouraged to disclose those elements through other reports that are issued at least annually.
1. The Task Force recommends companies in non-financial groups with over 1 billion USDE in annual revenue that are more exposed to climate-related risks
to disclose Strategy and Metrics and Targets information in other annual reports.
2. Scope 1 and Scope 2 GHG emissions should be disclosed irrespective of materiality
Source: TCFD, Annex : Implementing the Recommendations of the Task Force on Climate-related Financial Disclosures , 2021

31

Additional Resources

The TCFD website and the Knowledge Hub, developed by CDSB, provide a variety of resources andinformation on TCFD implementation
TCFD Website

Knowledge Hub

Find all the information you need about the TCFD on
its official website, including the recommendations
and all other publications.

Find additional TCFD-related resources curated by the
CDSB (information on the recommendations,alignment with other frameworks, online courses, etc).

https://www.fsb-tcfd.org/

https://www.tcfdhub.org/

32

TCFD Series of Workshops

The next session will focus on the Governance recommendation
Session1

Fundamentals and Overview of TCFD

2

TCFD Recommendation:
Governance3

TCFD Recommendation:
Strategy

4

TCFD Recommendation:
Risk Management

5

TCFD Recommendation:
Metrics and Targets

Next session

33

Q&A

34

Appendix

35

Structure of the Recommendations

The following resources should be read in order to understand the full scope of the TCFD
framework
Recommendations and Guidance Structure

Recommendations

Recommendations
Four widely adoptable recommendations tied to: governance, strategy, risk
management, and metrics and targets. These were introduced in the final
2017 TCFD recommendations publication
Recommended Disclosures

Guidance for All
Sectors

Specific recommended disclosures companies should include in their financial
filings to provide decision-useful information
Guidance for All Sectors
Guidance providing context and suggestions for implementing therecommended disclosures for all companies

Recommended
Disclosures

Supplemental Guidance for Certain Sectors

Supplemental
Guidance for
Certain Sectors

Guidance that highlights important considerations for certain sectors andprovides a fuller picture of potential climate-related financial impacts in
those sectors
Supplemental guidance is provided for the financial sector and for nonfinancial sectors potentially most affected by climate change
Additional Supporting Materials

Additional Supporting Materials

Additional information and guidance to help preparers implement key
components of the TCFD recommendations (e.g., Guidance on Metrics,
Targets, and Transition Plans, etc.)

Source: TCFD, Annex: Implementing the Recommendations of the Task Force on Climate-related Financial Disclosures, 2021

36

Application of Recommendations
Who Should Disclose?
To promote more informed investing, lending, and insurance underwriting decisions, the Task Force recommends
all financial and non-financial organizations with public debt or equity implement its recommendations. Because
climate-related risks and opportunities are relevant for organizations across all sectors, the Task Force encourages
all organizations to implement these recommendations. In addition, the Task Force believes that asset managers
and asset owners, including public- and private-sector pension plans, endowments, and foundations, should
implement its recommendations.

Which Recommendations Involve an Assessment of Materiality?
The disclosures related to the Strategy and Metrics and Targets recommendations involve an assessment ofmateriality, with the exception of Scope 1 and Scope 2 GHG emissions under the Metrics and Targets
recommendation. The Task Force believes all organizations should disclose absolute Scope 1 and Scope 2 GHG
emissions independent of a materiality assessment. The disclosure of Scope 3 GHG emissions is subject tomateriality; however, the Task Force encourages organizations to disclose such emissions.

Source: TCFD, Annex: Implementing the Recommendations of the Task Force on Climate-related Financial Disclosures, 2021

37

Application of Recommendations (continued)
Where Should Preparers Disclose?
Preparers of climate-related financial disclosures should provide such disclosures in their mainstream (i.e., public)
annual financial filings. Certain organizations—those in the four non-financial groups that have more than one
billion U.S. dollar equivalent (USDE) in annual revenue—should consider disclosing information related to theStrategy and Metrics and Targets recommendations in other reports when the information is not deemedmaterial and not included in financial filings.
Other reports include official company reports that are issued at least annually, widely distributed and available
to investors and others, and subject to internal governance processes that are the same or substantially similar to
those used for financial reporting. Asset owners and asset managers should report to their beneficiaries andclients, respectively, through existing means of financial reporting, when relevant and feasible. Asset owners andasset managers are also encouraged to disclose publicly via their websites or other public avenues of disclosure.
How Should Material Information Be Determined?
Organizations should determine materiality for climate-related issues consistent with how they determine themateriality of other information included in their annual financial filings. The Task Force cautions organizations
against prematurely concluding that climate-related risks and opportunities are not material based on perceptionsof the longer-term nature of some climate-related risks.
When providing disclosures outside mainstream financial filings, asset managers and asset owners should consider
materiality in the context of their respective mandates and investment performance for clients and beneficiaries.
Source: TCFD, Annex: Implementing the Recommendations of the Task Force on Climate-related Financial Disclosures, 2021

38

Application of Recommendations (continued)
Who Should Review Climate-Related Financial Disclosures Prior to Release?
Because these disclosures should be included in mainstream financial filings, the governance processes should be
as rigorous as those used for existing public financial disclosures, including review by the chief financial officer,
audit committee, and Board of Directors, as appropriate. Organizations that provide climate-related financial
disclosures in reports other than financial filings should follow internal governance processes that are the same orsimilar to those used for financial reporting.
What Should Preparers Do if They Choose to Omit a Recommended Disclosure?
If a recommended disclosure is not made, preparers should provide their rationale for omitting the disclosure.

What Reporting Period Should Preparers Use?
Preparers should report information for the same period covered by their mainstream financial filings.

Source: TCFD, Annex: Implementing the Recommendations of the Task Force on Climate-related Financial Disclosures, 2021

39

Application of Recommendations (continued)
How Should Preparers Define Short, Medium, and Long Term?
The Task Force is not specifying time frames for short, medium, and long term given that the timing of climaterelated impacts on businesses will vary. Instead, the Task Force recommends preparers define time frames
according to the life of their assets, the profile of the climate-related risks they face, and the sectors andgeographies in which they operate

What if Certain Disclosures Are Incompatible with National Disclosure Requirements?
Organizations need to make financial disclosures in accordance with their national disclosure requirements. If
certain elements of the recommendations are incompatible with national disclosure requirements for financial
filings, organizations are encouraged to disclose those elements through other reports.

Source: TCFD, Annex: Implementing the Recommendations of the Task Force on Climate-related Financial Disclosures, 2021

40