Commercial, Energy Efficiency, GHG Emissions  -  October 17, 2023

TCFD Report: More Emissions Disclosure Work Needed

The Task Force on Climate-related Financial Disclosures (TCFD)’s sixth and final report highlights steady momentum in companies disclosing TCFD-aligned information but says more progress is needed from businesses. 

On average for fiscal year 2022, 58% of companies disclosed in line with at least five of the 11 recommended disclosures, an increase from 18% in 2020; However, only 4% disclosed in line with all 11.

In the sixth report, TCFD disclosed that 97 of the 100 largest companies in the world have declared support for the TCFD report in line with the TCFD recommendations or both.

The percentage of public companies disclosing TCFD-aligned information continues to grow, but more progress is needed, according to the report. 

Currently, disclosure of climate-related financial information in financial filings is limited. On average for fiscal year 2022, information aligned with the 11 recommended disclosures was four times more likely to be disclosed in sustainability and annual reports than in financial filings.

Over 80% of the largest asset managers and 50% of the largest asset owners reported in line with at least one of the 11 recommended disclosures. Based on a review of publicly available reports, nearly 70% of the top 50 asset managers and 36% of the top 50 asset owners disclosed in line with at least five of the recommended disclosures.

 The Task Force encourages appropriate bodies to undertake work or continue driving progress as follows:

• Continue to emphasize the importance of companies’ disclosure of the resilience of their strategies under different climate-related scenarios, including a climate-related scenario aligned with the latest international agreement on climate change;
• Ensure interoperability of the ISSB standards with regional and jurisdictional frameworks to support consistent company reporting across jurisdictions and avoid multiple reporting venues;
• Develop implementation guidance on topics like climate-related physical risk assessment and adaptation planning, climate-related scenario analysis at a sector or industry level, and Scope 3 GHG emissions measurement at a sector or industry level;
• Focus on decision-useful disclosure on other sustainability topics — such as biodiversity, water, and social issues — and consider the linkages between climate-related and other sustainability issues; and
• Develop a climate-related financial disclosure framework for use by countries and other sovereign entities as consistent sovereign disclosure would support companies’ in preparing comprehensive climate-related financial disclosure.

“This final report makes clear that we’ve made tremendous strides in bringing greater transparency to financial markets for both climate related-risks and opportunities,” said Michael R. Bloomberg, Chair of the Task Force and Founder of Bloomberg L.P. and Bloomberg Philanthropies, in a statement. “While there is still much more work to do, this progress provides the forward momentum necessary to more fully integrate climate data into the global economy and spur more private investment in clean energy. None of this would have been possible without the Financial Stability Board, its current and former Chairs, and its Secretariat, and we’re grateful for their partnership and support.”