Task Force on Climate-related Financial Disclosures

The material in this post is taken from the blog Task Force on Climate-related Financial Disclosures.


Task Force on Climate-related Financial Disclosures

The SEC (Securities and Exchange Commission) proposed rule The Enhancement and Standardization of Climate-Related Disclosures for Investors relies in large part on work already carried out by the TCFD (Task Force on Climate-related Financial Disclosures). The following quotation is from page 46 of the proposed rule:

We have modeled the proposed disclosure rules in part on the TCFD disclosure framework. Building on the TCFD framework should enable companies to leverage the framework with which many investors and issuers are already familiar, which should help to mitigate both the compliance burden for issuers and any burdens faced by investors in analyzing and comparing the new proposed disclosures.

Throughout the proposed rule there are many references, both explicit and implicit, to the TCFD guidance.

The TFCD has published many reports, guidance documents and workshops. The following four publications summarize their work. The combined documents have a formidable total of 293 pages consisting mostly of dense text. We will examine each of them in greater detail in future posts. The Table of Contents for each (first level only) is shown below.

Recommendations of the Task Force on Climate-related Disclosures, June 2017

The report is organized into six sections: 

A. Introduction
B. Climate-Related Risks, Opportunities and Financial Impacts
C. Recommendations and Guidance
D. Scenario Analysis and Climate-Related Issues
E. Key Issues Considered and Areas for Further Work
F.  Conclusion

There are six Appendices.

Guidance on Risk Management, Integration and Disclosure, October 2020

This document is organized into five sections:

A.      Background and Purpose
B.      Scope and Approach
C.      Unique Characteristics of Climate-Related Risks
D.     Integration in Practice Key Principles and Initial Steps
E.      Disclosure of Risk Management Processes

 There are five Appendices.

Guidance on Metrics, Targets and Transition Plans, October 2021

This document is organized into six sections:

A. Overview and Background
B. Scope and Approach
C. Climate-Related Metrics
D. Climate-Related Targets
E. Transition Plans
F.  Financial Impacts 

There are four Appendices. 

Implementing the Recommendations of the Task Force on Climate-related Financial Disclosures, October 2021

This document is organized into five sections:

  A. Introduction
B. Recommendations
C. Guidance for All Sectors
D. Supplemental Guidance for the Financial Sector
E. Supplemental Guidance for Non-Financial Groups
F. Fundamental Principles for Effective Disclosure

 There are four Appendices.