KPMG shares insights into the scope of TCFD, who it applies to and how companies can prepare themselves for the disclosures.
25 Jan 2022, 6 min read
What is TCFD?
The global Task Force on Climate-related Financial Disclosures (TCFD) was set up in December 2015 by the Financial Stability Board (FSB) and is tasked with monitoring and making recommendations on climate-related risks to the global financial system.
In June 2017, the TCFD published recommendations based on four disclosure pillars (governance, risk management, strategy and metrics and targets) and seven principles of effective disclosure.
- Governance - an organisation’s governance around climate-related risks and opportunities;
- Strategy - the actual and potential impacts of climate-related risks and opportunities on the organisation’s businesses, strategy and financial planning, where such information is material;
- Risk management - how the organisation identifies, assesses, and manages climate-related risks; and
- Metrics and targets - the metrics and targets used to assess and manage relevant climate-related risks and opportunities, where such information is material.
The recommendations focus on annual report-style disclosures to help investors, insurers and other stakeholders understand the financial implications of climate change. TCFD recommendations have guided
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