The Task Force on Climate-Related Financial Disclosures (TCFD) recently issued its final status report and, with that, ended its tenure of operation under the Financial Stability Board (FSB). It’s a moment worthy of recognition: TCFD anchored the creation of a “voluntary, consistent disclosure framework” to align climate-related financial disclosure to a set of global reporting frameworks.
Now, its work continues under the oversight of the International Sustainability Standards Board (ISSB), where it will serve as a core tenant of the ISSB’s new S1 and S2 standards covering:
- Governance: Disclosing the organization’s governance around climate-related risks and opportunities.
- Strategy: Disclosing the actual and potential impacts of climate-related risks and opportunities on the organization’s businesses, strategy, and financial planning where such information is material.
- Risk Management: Disclosing how the organization identifies, assesses, and manages climate-related risks.
- Metrics and Targets: Disclosing the metrics and targets used to assess and manage relevant climate-related risks and opportunities where such information is material.
Formed by the FSB, the TCFD unveiled its initial recommendations in 2017, and DFIN was quick to recognize its potential impact on climate-related financial disclosure. In fact, we were the first to elevate the awareness of the new framework through our paper titled “Preparing for Climate-Risk Disclosure: Practical Suggestions for Public Companies.” In the paper, we shared our observations on the growing trends for environmental disclosures to become “broader, deeper, and more concrete.” Our observations also made it clear that the TCFD would meet that need and significantly impact boardrooms and investment committees.
Two years later, we released our second TCFD paper, The State of Climate Risk Disclosure: A Survey of US Companies, where we examined the State of TCFD adoption for US-listed companies in partnership with the Society of Governance Professionals, presenting practical steps that companies can follow to get ahead. Since then, our support for the TCFD and the ISSB has remained steadfast. In fact, earlier this month, during Finance Day at COP28, the ISSB issued an announcement recognizing DFIN, along with 400 global organizations from 64 jurisdictions, for our commitment to advancing the utilization of the ISSB’s climate-related reporting standards.
Now, as we await the SEC’s final climate-risk disclosure requirements, we continue to guide clients, helping them voluntarily report on their ESG efforts while preparing them for the mandated rule that will come in the year ahead. DFIN’s deep ESG compliance domain experience, aligned with our ESG Data management partners, and integrated ActiveDisclosure ESG services, ensures compliance readiness in advance of the expected mandated disclosure rules. If you’re interested in getting started on your journey, the DFIN team is ready to help.
