The Task Force on Climate Related Financial Disclosures (TCFD) did work to help companies understand what information they should share about the risks and opportunities they face due to climate change. Their guidance was organised into four key areas: Governance, Strategy, Risk Management, and Metrics and Targets.
The TCFD was set up in 2015 by the Financial Stability Board (FSB) because the lack of clear and consistent information on climate risks was making markets less efficient and was contributing to systemic risk.
The work started by the TCFD has now been taken over by the IFRS Foundation, who have created two global Climate-related standards:
-
IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information which explains what sustainability-related information companies should disclose overall.
-
IFRS S2 Climate-related Disclosures, focusing specifically on what companies should disclose about climate related risks.
These standards aim to make climate-related reporting clearer and more consistent, and they could become mandatory in many countries.