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What are TCFD reporting standards?

Updated: Feb 5, 2023

The Task Force on Climate-related Financial Disclosures (TCFD) was established in 2015 by the Financial Stability Board (FSB) to develop a set of recommendations for voluntary climate-related financial disclosures that companies can use to provide information to investors, lenders, insurers, and other stakeholders.


TCFD reporting standards are designed to help companies understand and manage the financial risks and opportunities associated with climate change. The recommendations cover four main areas: governance, strategy, risk management, and metrics and targets.


In terms of governance, the TCFD recommends that companies disclose information about their governance structures and processes for managing climate-related risks and opportunities. This includes information about the board of directors, senior management, and relevant committees, as well as the roles and responsibilities of these groups in relation to climate-related issues.


In terms of strategy, the TCFD recommends that companies disclose information about how they are positioning themselves to respond to the financial risks and opportunities associated with climate change. This includes information about the company's overall strategy, as well as specific initiatives and plans related to climate change.


In terms of risk management, the TCFD recommends that companies disclose information about how they are identifying and assessing the financial risks and opportunities associated with climate change. This includes information about the company's risk management processes, as well as specific risks and opportunities related to climate change.


Finally, in terms of metrics and targets, the TCFD recommends that companies disclose information about the metrics and targets they are using to manage and track their progress on climate-related issues. This includes information about emissions reduction targets, as well as other relevant metrics and targets.


Overall, TCFD reporting standards provide a framework for companies to disclose information about their governance, strategy, risk management, and metrics and targets related to climate change, which can help investors and other stakeholders understand and manage the financial risks and opportunities associated with climate change.


It's worth noting that TCFD reporting is voluntary, but many companies are encouraged by investors and other stakeholders to disclose information in line with the TCFD's recommendations. This is because it helps companies to better understand and manage the financial risks and opportunities associated with climate change, and it helps investors and other stakeholders to better understand a company's exposure to climate-related risks and opportunities.




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