In March 2020, the Task Force on Climate-related Financial Disclosures (TCFD) released its overview containing guidance and recommendations for climate-related financial disclosures.
Supported by over 500 institutions and companies, the FSB TCFD provides a common disclosure framework for making climate risks and opportunities more transparent. Current environmental and climate issues mean that fundamental structural changes to the global economy are needed. – there are transition risks of this, such as the introduction of carbon taxes. Disclosures are, thus, very important.
TCFD helps strengthens governance and the mitigation of environmental and climate-related risks.
5 key benefits of disclosures
- Protection & improving company reputation due to an increased concern for the environmental from civil society and investors over the recent years. 75% of companies agree that disclosure through TCFD will improve companies’ reputation.
- Regulation is coming. Companies who disclosure with CDP & TCFD are better prepared for these regulated and mandatory disclosures of the future.
- Boosting competitive advantage with environmental transparency and success.
- Uncover risks & opportunities. Can identify and mitigate the risks and to benefit from these climate-related opportunities (demand for new & low-carbon).
- Can track & benchmark progress (internally & externally) can compare with industry peers and have feedback with CDP scores annually. (A-Grade)
3 emerging trends
- Increased disclosure across Asia-Pacific countries.
- Increased adoption of science-based targets in order to align with the targets of the Paris Agreement.
- Increased focus on the financial services – as it holds the key to shifting capital to more sustainable businesses. MUST ENGAGE THE FINANCIAL SECTOR. – CDP is launching a financial sector questionnaire to fill the data gap.
Information needs to be interwoven with the rest not just stand-alone.
- Must be specific with data in your disclosures.
- Progress is more important than perfection.
- Consistent and realistic targets are key.
- Lay out a timeline and a roadmap would help with consistent targets and consult the resources on the TCFD website to help get started.
Read the webinar’s full notes.