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TCFD published final recommendations on climate-related financial disclosures

  • FSB (Financial Stability Board) (lt green) Image

29 Jun 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.

In the introduction to the final report, TCFD Chairman Michael R. Bloomberg notes:

The risk climate change poses to businesses and financial markets is real and already present. It is more important than ever that businesses lead in understanding and responding to these risks — and seizing the opportunities — to build a stronger, more resilient, and sustainable global economy.

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 organisations across sectors and jurisdictions were widely supported and remain unchanged:

  • Governance: Disclosure of the organisation’s governance around climate-related risks and opportunities
  • Strategy: Disclosure of the actual and potential impacts of climate-related risks and opportunities on the organisation’s businesses, strategy, and financial planning
  • Risk management: Disclosure of how the organisation 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 opportunities

Key features of the recommendations are that they are adoptable by all organisations, 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.

The following additional information is available on the FSB website:

Also see Deloitte's Need to know on the final report.

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