In short: The Task Force on Climate-related Financial Disclosures (TCFD) has published final recommendations for disclosing climate-related risks and opportunities, organized around four pillars: governance, strategy, risk management, and metrics and targets.
What are the four pillars?
- Governance — board oversight and management’s role
- Strategy — impacts on business, strategy and financial planning, including scenario analysis
- Risk management — how climate risks are identified, assessed and managed
- Metrics and targets — measures used, including greenhouse gas emissions
Why is TCFD important?
TCFD became the foundation for later mandatory frameworks, including the ISSB’s IFRS S2 climate standard.
Key takeaways
- TCFD organizes climate disclosure into four pillars.
- Scenario analysis is a key recommendation.
- TCFD shaped later global standards.
Frequently asked questions
Is TCFD mandatory?
Originally voluntary, it has since been incorporated into mandatory requirements in several jurisdictions.
What is climate scenario analysis?
Assessing how different climate futures could affect the organization’s strategy and performance.
Did TCFD continue after IFRS S2?
Its monitoring responsibilities were transferred to the ISSB in 2024.