Task Force on Climate-Related Financial Disclosures (TCFD)

The Financial Stability Board of the G20 established the TCFD to develop recommendations for more effective climate-related disclosures that could promote more informed investment, credit, and insurance underwriting decisions and, in turn, enable stakeholders to understand better the concentrations of carbon-related assets in the financial sector and the financial system’s exposures to climate-related risks.

The Task Force consists of 32 members from across the G20, representing both preparers and users of financial disclosures. The TCFD is chaired by Michael R. Bloomberg, founder of Bloomberg L.P.

In 2017, the TCFD released climate-related financial disclosure recommendations designed to help companies provide better information to support informed capital allocation. These disclosure recommendations are structured around four thematic areas that represent core elements of how organizations operate: governance, strategy, risk management, and metrics and targets. These thematic areas are intended to interlink and inform each other.

As of January 2021, 2,900 institutions in 89 jurisdictions have become TCFD supporters. As an organization, the TCFD is currently engaged in helping companies implement the recommendations and promoting advancements in the availability and quality of climate-related disclosure.

Why it matters 

TCFD recommendations have been widely adopted and have become a standard for climate disclosures

Global uptake of the Task Force’s work has grown significantly over the past years. Multiple jurisdictions have proposed or finalized laws and regulations to require disclosure aligned with the TCFD recommendations — some coming into effect starting in 2022. The TCFD recommendations are also the basis upon which international accounting standard setters are building global standards for climate risk disclosure.

TCFD recommendations have shaped the development of tools and methodologies to assess and manage climate-related risks

TCFD recommendations have highlighted the need to assess climate-related risks and its global disclosure framework has been used as a basis for the development of new risk assessment tools and approaches. Most service providers and tools today rely on the TCFD framework.

The TCFD tracks progress annually and provides access to a publicly available knowledge hub

Every year, TCFD status reports describe progress on climate-related disclosure and TCFD implementation efforts, insights, and challenges. In addition, a TCFD Hub has been created to support the adoption of TCFD recommendations. It hosts a range of resources (reports, case studies, trainings) that can help institutions identify, analyse and report climate-related financial information.

Main areas of work related to climate mainstreaming:

In its report, the Task Force emphasized the importance of transparency in pricing of risk — including risk related to climate change — to support informed, efficient capital allocation decisions.

Since 2017, the Task Force has sought to clarify issues raised by organizations in their implementation of the TCFD recommendations to provide additional guidance on disclosing metrics, targets, and transition plan information in line with the TCFD recommendations.