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TCFD Status Report 2022 – Five years of progress towards climate leadership

In October 2022, five years on from their first report, the Task Force on Climate-related Financial Disclosures (TCFD) published its latest ‘2022 TCFD Status Report’. This blog summarises the key messages from it.

Increasing adoption


As expected, adoption of TCFD-aligned disclosures continues to grow with over 80% of companies reviewed disclosing at least one recommendation for fiscal year 2021. Much of the drive for this comes from the increased regulatory landscape. For example, the Financial Conduct Authority (FCA) requirement for mandatory TCFD disclosures for premium listed companies to disclose in line with TFD for periods beginning on or after 1st January 2021. The FCA has also extended this requirement to standard listed companies. In addition, support from governments and regulators across the world is growing. Disclosure requirements aligned with the Task Force’s recommendations come into effect between FY22 and FY24 for companies under the jurisdiction of the Brazilian Securities and Exchange Commission (SEC), Egyptian Financial Regulatory Authority, New Zealand Government, Singapore Exchange and Switzerland’s Financial Market Supervisory Authority.

Alongside this, the International Sustainability Standard Board (ISSB) under the oversight of the IFRS Foundation, is progressing a comprehensive global baseline for sustainability disclosures building upon TCFD. The new standards will be centred around the four TCFD pillars: governance, strategy, risk management and metrics and targets (see IFRS Sustainability Disclosure Draft). Therefore, in preparing disclosures under TCFD, companies are laying the foundations for future ISSB adoption.

Increasing scope


Not only is the volume of companies disclosing increasing, so also is the quality and number of those disclosures. The Task Force reviewed publicly available reports and identified a few notable trends:

  • Governance: Describing Board Oversight and Management’s Role in disclosures remains limited with only 29% and 22% of companies making the disclosure respectively. This is despite 70-72% of preparers stating that the governance disclosure category was either ‘very easy’ or ‘relatively easy’ to prepare. One of the reasons for the low disclosure could be due to board and governance structure being explained elsewhere in the annual report and not linked to the TCFD section therefore lacking a clear link to climate matters. We would recommend that companies focus on including clear governance narrative specifically to climate in their disclosures.
  • Strategy: As observed in previous status reports, companies report climate related risks and opportunities more frequently than any of the other recommendations with 61% of companies including these in their FY21 disclosures. However, disclosure C, Resilience of Strategy, is still the least disclosed overall (16% of companies) with 88% of respondents rating the disclosure as either ‘very difficult’ or ‘somewhat difficult’ to implement. This could be due to the unpredictability of future climate scenarios and management being unfamiliar with a long-term forward-looking approach therefore it is hard to make an accurate statement on the company’s resilience.

There is a potential gap emerging between what users would benefit from seeing, and what preparers are capable of disclosing effectively. Research conducted by the Task Force suggests scenario analysis that assesses resilience to climate change creates more decision useful information. However, the number of companies comparing different scenarios is low, only 9% of companies mentioned a 2°C scenario in 2021, dropping to around 4% for scenarios above 3°C. Focussing efforts into reporting strategy resilience under different scenarios is likely to improve the overall effectiveness of disclosures.

  • Risk Management: Disclosures in this category are growing significantly; most notably companies disclosing how climate risk is integrated into overall risk management has increased from 17% to 37% between 2019-2021. All three recommendations within the Risk Management pillar have seen disclosure rates increase from <10% to >30% between 2017 and 2021.
  • Metrics and Targets: Metrics and Targets remain the most disclosed but have grown the least on prior year. These disclosures have consistently been a focus for companies, therefore disclosure of climate related metrics grew just 1% between 2020 to 2021, representing a slow down on the 4% growth between 2019 and 2020. Scope 1,2 & 3 emissions grew just 4% to 44% with scope 3 emissions remaining a challenge due to a lack of data availability. 71% of preparers describe scope 3 emissions as ‘somewhat difficult’ or ‘very difficult’ to implement.

Industry and regional impacts


Inevitably, there are reporting variations across industries and geographies. Companies within banking and insurance provided more risk management-related disclosures whereas those operating in transportation, food, and materials and buildings industries provided more related to metrics and targets. At 43%, more energy companies disclosed across all four pillars than any other sector with the fewest disclosures seen within technology and media companies (15%).

Geographically, 60% of European companies disclose against the 11 recommended disclosures compared to North America at 29% and Asia Pacific at 36%. In all geographies, the number of reporters is growing with Europe seeing the biggest increase up 23 percentage points since 2019.

Disclosing for decision-making


One key finding of the review is that some disclosures are not always “decision-useful”, particularly for investors, lenders, and insurance underwriters. Users were interviewed by the Task Force, and whilst the majority marked all 11 disclosures as either ‘very useful’ or ‘somewhat useful’, the disclosures most frequently viewed as either ‘not very useful’ or ‘not useful at all’ were Governance a) Board Oversight at 17%; Metrics & Targets b) Scope 3 GHG emissions at 19% and c) Climate-related targets at 19%.

To increase the usefulness of climate-related financial disclosures the TCFD highlighted four actions:

  • disclose the actual and potential financial impacts of climate-related issues on their businesses, strategies, or financial planning, this also aligns with the FRC thematic on climate change assessing the impacts of climate on the financial statements
  • use a standard scenario to assess the resilience of their strategies to climate change
  • report climate-related targets in a consistent way across companies
  • increase the number of companies disclosing climate-related financial information

Developments in transition plans


A year on from the Task Force publishing additional guidance on Metrics, Targets, and Transition Plans, the number of companies reporting their transition plans has increased, with over half of the companies reviewed as part of the status report including them within their FY21 disclosures. Additionally, some companies have published specific transition plan reports which are more comprehensive. Transition plan reporting occurs more in jurisdictions that have set GHG emission reduction targets, however investors are also increasing pressure on companies to describe their plans for transitioning to a low-carbon economy.

The importance of publishing transition plans can be seen in the UK through the development of the Transition Plan Taskforce (TPT) created by HM Treasury earlier this year (see UK Transition Plan Taskforce). The TPT guidance is under consultation until February 2023 and until the release, comprehensive TCFD disclosures are likely the best starting point for such reporting.



Whilst the overarching message of more disclosures by more companies mirrors that of previous status reports, it still serves to highlight the momentum building around TCFD and climate disclosures. And with ISSB also basing their new disclosures on the TCFD’s four pillars, there’s a clear message to companies regarding what to report and why.

As is to be expected with any emerging reporting area, there are still many opportunities for improvement, not least around the usefulness and comparability of disclosures, and the addition of more information in areas such as transition plans. The points highlighted in this latest status Report align with the observations from other reviews including the FRC’s climate thematic and provide a clear “direction” for companies; more detail, more transparency, more connectivity.


1 1,434 public companies were reviewed globally, composed of the following sectors. (Banking 248, Insurance 118, Energy 223, Materials and Buildings 353, Transportation 136, Ag., Food, and Forest Products 123, Technology and Media 96, & Consumer Goods 137)