TCFD

The Task Force on Climate-Related Financial Disclosures (TCFD) was developed in 2015 by the Financial Stability Board (FSB) to create consistent climate-related financial risk disclosures for use by companies, banks, and investors in providing information to stakeholders.

Increasing the amount of reliable information on financial institutions’ exposure to climate-related risks and opportunities will strengthen the stability of the financial system, contribute to greater understanding of climate risks and facilitate financing the transition to a more stable and sustainable economy.

The TCFD’s 11 disclosure recommendations span four different areas: governance, strategy, risk management, and metrics and targets.

The United Nations Environment Programme Finance Initiative (UNEP FI) has published numerous tools, frameworks, and guides to empower both participating institutions and those throughout the financial industry to better manage and disclose their climate risks.

• All UK companies that are currently required to produce a Non-Financial Information Statement.
  
  – This includes UK companies that have more than 500 employees and are either traded companies, banking companies or insurance companies.
  
  – UK registered companies with securities admitted to AIM with more than 500 employees.
  
  – UK registered companies which are not included in the above categories that have more than 500 employees and a turnover of more than £500m.
  
  -LLPs which have more than 500 employees and a turnover of more than £500m.

TCFD can improve employee engagement, keeping teams informed of their climate roles and responsibilities.

Achieving Net Zero can produce a more secure and resilient business model. Added stability can be more appealing to investors, insurers, shareholders and customers.  

If you are a UK-listed company, it is mandatory to report your TCFD for financial years starting on or after 6th April 2022.

We suggest that you start getting ready and preparing a TCFD Report for new changes in climate legislation to transition to a low-carbon economy. You will be investing in your company’s efficiency and improving your green reputation.

Completing a TCFD can also show your companies commitment to reaching the UK’s Net Zero by 2050 plan. This can show to investors, partners and customers that you are climate conscious and are actively trying to make a positive difference to the environment.

The TCFD recommendations on climate-related financial disclosures are widely adaptable and applicable to organizations across sectors and jurisdictions. They are designed to solicit decision-useful, forward-looking information that can be included in mainstream financial filings.

The recommendations are structured around four thematic areas that represent core elements of how organizations operate: governance, strategy, risk management, and metrics/ targets and within 11 climate-related recommendations.

You can find the TCFD recommendations summarized and fully described in the TCFD recommendations report.

Demonstrating a commitment to managing your carbon footprint and climate impact will help to improve your brand image in an increasingly green-conscious climate. It can save money through reduced energy consumption and waste costs, improving the overall efficiency or company operations. 

You can be ahead of the curve for future compliance requirements, reviewing if your day-to-day activities are sustainable and meet detailed scrutiny.

It can improve employee engagement, keeping teams informed of their environmental roles and responsibilities. Getting a TCFD done will only be a positive asset to your company! It will improve your company’s reputation, enhance decision-making, improve risk management and ensure access to capital.