Taskforce for Climate-related Financial Disclosures
Useful Links:
Need to Know
FCA Policy Statement and Listing Rule promoting better climate-related financial disclosures aligned with TCFD
Learn more about Deloitte's ESG Assurance services
The Taskforce for Climate-related Financial Disclosures (TCFD) reporting requirements for premium and standard listed companies have been in place for several years. But with regular thematic reviews from the FRC and FCA, and status updates from the TCFD, the requirements are continuously evolving.
Understand more about the latest TCFD disclosure requirements here.
TCFD’s disclosure recommendations are structured around four areas: governance, strategy, risk management, and metrics & targets. The four recommendations are interrelated and supported by eleven recommended disclosures which require companies to provide information to help investors and others understand their climate-related risks and opportunities.
TCFD first became mandatory for premium-listed companies on 1 January 2021, and regulator expectations on the quality of disclosures have increased considerably. Companies are now expected to give more detailed, decision-useful responses explaining the risks and opportunities of climate change on their business.
Key Implications:
- The original TCFD guidance published in 2017 has been updated and superseded by Implementing the Recommendations of the TCFD published in October 2021, which, along with the Financial Reporting Council’s (FRC) latest Thematic Review of TCFD disclosures, introduced new expectations for disclosures such as the financial quantification of risks and opportunities and transition plans.
- TCFD reporting should be made on a “comply or explain” basis, by which companies either provide disclosure in line with the framework or provide an explanation as to why they are unable to, how they will address this shortfall, and by when they will be able to make suitable disclosures (companies should be mindful of the mandatory CFD reporting requirements and the impacts on “comply or explain”).
- Under the Listing Rules, companies must include a statement regarding their consistency with the TCFD framework or “compliance statement”, outlining to what extent they have included disclosures consistent with the TCFD Recommendations and Recommended Disclosures in their annual report.
- Disclosures should give fair and equal waiting to climate-related risks and opportunities for the business.
