Task Force on Climate Related Financial Disclosures

The Task Force on Climate Related Financial Disclosures (TCFD) provides information to investors about what companies are doing to mitigate the risks of climate change, as well as be transparent about the way in which they are governed. It was established in December 2015 by the G20 Financial Stability Board, and is chaired by Michael Bloomberg. It consists of governance, strategy, risk management, and metrics and targets.^[1] It will become mandatory for companies to report on these disclosures by 2025 in the UK, although some companies will have to report earlier.^[2]

Climate change presents financial risk to the global economy. Financial markets need clear, comprehensive, high-quality information on the impacts of climate change. This includes the risks and opportunities presented by rising temperatures, climate-related policy, and emerging technologies in our changing world.

The Financial Stability Board created the Task Force on Climate-related Financial Disclosures (TCFD) to improve and increase reporting of climate-related financial information.

The UK is set to become the first country in the world to make climate-related financial disclosure (TCFD) mandatory. The new pledge will be issued as part of a plan to "make the financial services industry more dynamic, open and competitive" after Britain leaves the EU. While many companies have increased their efforts to improve sustainable operations in recent years, and investors are increasingly pursuing ESG integration in their investment decisions, the lack of consistent disclosure and reliable data for assessing, analyzing and tracking progress remains the biggest barrier to disclosure. TCFD was set up to help solve such problems. The UK is expected to move beyond the "comply or explain" approach with the aim of advancing mandatory TCFD consistent disclosure for UK non-financial and financial sectors by 2025, with a significant number of mandatory requirements in place by 2023. Specifically, the regulations outlined in the TCFD Taskforce interim report will cover most sectors of the economy, including listed commercial companies, large UK-incorporated private companies, banks, building societies, insurance companies, UK-authorised asset managers, life insurers, FCA-mandated pension schemes and occupational pension schemes.^[3][4]

References[]

• "What is the TCFD and why does it matter?". Deloitte. Retrieved 2021-07-06.
• Vincent, Matthew (6 March 2020). "UK-listed companies face compulsory climate disclosures". Financial Times. Retrieved 2021-07-06.
• Reiff, Nathan. "Task Force on Climate-Related Financial Disclosures (TCFD)". Investopedia. Retrieved 2021-07-06.
• "Climate change: Pressure on big investors to act on environment". BBC News. 27 February 2020. Retrieved 2021-07-06.