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TCFD publishes final recommendations on climate-related financial disclosures

  • IFRS - FSB (Financial Stability Board) Image

Jun 29, 2017

The Task Force on Climate-related Financial Disclosures (TCFD) set up by the Financial Stability Board (FSB) to develop voluntary, consistent climate related financial risk disclosures for use by companies in providing information to lenders, insurers, investors and other stakeholders has published its final recommendations for effective disclosure of climate-related financial risks.

The final report follows on a con­sul­ta­tion document published in December 2016. The con­sul­ta­tion document saw 320 unique responses from re­spon­dents in 30 countries, including 15 of the G20 ju­ris­dic­tions. The four widely adoptable rec­om­men­da­tions on cli­mate-re­lated financial dis­clo­sures that are ap­plic­a­ble to or­gan­i­za­tions across sectors and ju­ris­dic­tions were widely supported and remain unchanged:

  • Gov­er­nance: Dis­clo­sure of the organization’s gov­er­nance around cli­mate-re­lated risks and op­por­tu­ni­ties
  • Strategy: Dis­clo­sure of the actual and potential impacts of cli­mate-re­lated risks and op­por­tu­ni­ties on the organization’s busi­nesses, strategy, and financial planning
  • Risk man­age­ment: Dis­clo­sure of how the organization iden­ti­fies, assesses, and manages cli­mate-re­lated risks
  • Metrics and targets: Dis­clo­sure of the metrics and targets used to assess and manage relevant cli­mate-re­lated risks and op­por­tu­ni­tiesThe following ad­di­tional in­for­ma­tion is available on the FSB website:
  • Key features of the rec­om­men­da­tions are that they are adoptable by all or­gan­i­za­tions, should be included in main­stream financial filings, are designed to solicit de­ci­sion-use­ful, for­ward-look­ing in­for­ma­tion on financial impacts, and have a strong focus on risks and op­por­tu­ni­ties related to the tran­si­tion to a lower-car­bon economy. The TCFD also rec­om­mends the dis­clo­sure of potential impacts of cli­mate-re­lated risks and op­por­tu­ni­ties under different potential scenarios, including a 2° Celsius scenario.

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