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  • ESG Everyday

What is TCFD?

Updated: Mar 16, 2023

TCFD stands for Task Force on Climate-related Financial Disclosures, which is an international initiative established by the Financial Stability Board (FSB) in 2015. The TCFD is aimed at improving climate-related financial disclosures by companies and organizations in order to help investors, lenders, and other stakeholders understand and manage the risks and opportunities related to climate change.

The TCFD has developed a set of recommendations for climate-related financial disclosures that companies can use to provide investors and other stakeholders with information on their climate-related risks and opportunities, as well as their strategy for managing these risks and opportunities. The recommendations cover four key areas:

1 Governance: The governance structure and oversight of climate-related risks and opportunities within the organization.

2 Strategy: The organization's climate-related risks and opportunities, and how they are being addressed through its strategy.

3 Risk Management: The processes used by the organization to identify, assess, and manage climate-related risks.

4 Metrics and Targets: The metrics and targets used by the organization to assess and manage climate-related risks and opportunities.

The TCFD recommendations are voluntary, but they have been widely adopted by companies and organizations around the world as a framework for disclosing climate-related information to investors and other stakeholders.

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