TCFD (Task Force on Climate-related Financial Disclosures)
What is TCFD?
One of the essential functions of financial markets is to price risk to support informed, efficient capital-allocation decisions. To carry out this function, financial markets need accurate and timely disclosure from companies. Without the right information, investors and others may incorrectly price or value assets, leading to a misallocation of capital.
The Financial Stability Board (FSB) created the TCFD to develop recommendations on the types of information that companies should disclose to support investors, lenders, and insurance underwriters in appropriately assessing and pricing a specific set of risks—risks related to climate change.
Implemention of TCFD recommendations
Implementing the Recommendations of the Task Force on Climate related Financial Disclosures.pdf
Guidance for All Sectors
In describing the board’s oversight of climate-related issues, organizations should consider including a discussion of the following:
- Processes and frequency by which the board and/or board committees (e.g., audit, risk, or other committees) are informed about climate-related issues,
- Whether the board and/or board committees consider climate-related issues when reviewing and guiding strategy, major plans of action, risk management policies, annual budgets, and business plans as well as setting the organization’s performance objectives, monitoring implementation and performance, and overseeing major capital expenditures, acquisitions, and divestitures,
- How the board monitors and oversees progress against goals and targets for addressing climate-related issues.
In describing management’s role related to the assessment and management of climate-related issues, organizations should consider including the following information:
- Whether the organization has assigned climate-related responsibilities to management-level positions or committees; and, if so, whether such management positions or committees report to the board or a committee of the board and whether those responsibilities include assessing and/or managing climate-related issues,
- A description of the associated organizational structure(s),
- Processes by which management is informed about climate-related issues, and
- How management (through specific positions and/or management committees) monitors climate-related issues.