TCFD Reporting

What is TCFD Reporting?

In 2017, the Task Force on Climate-related Financial Disclosures (TCFD) released a set of recommendations on climate-related financial disclosures to provide financial markets with clear, comprehensive and high-quality data on the impact of climate change. 

The information helps investors understand how organisations assess climate-related risks and opportunities. They also provide guidance to assist companies themselves in developing financial strategies that are compatible with environmental protection goals. 

Is TCFD reporting mandatory?

From April 2022 onward, TCFD reporting will become mandatory for approximately 480 listed companies and more than 1,500 registered companies in the United Kingdom. Organizations covered by this mandate will have to indicate in their annual report whether the information provided is consistent with TCFD recommendations. The UK will thus become the first G20 country to allow large companies to show their financial information to understand climate-related risks and opportunities in business strategy. 

As for the Italian context, TCFD is still a voluntary type of reporting that only companies that want to provide more transparency to the market about their internal financial policies apply.

TCFD Recommendations

The TCFD has developed 4 recommendations on climate-related financial information that are applicable to organizations in different sectors: 

  • governance. Show the role of the board and management in assessing and managing climate-related risks and opportunities;
  • strategy. Demonstrate the actual, potential, climate-related impacts, risks and opportunities on the organization's activities and strategy;
  • risk management. Show how climate-related risks are identified, assessed and managed by the organization;
  • metrics and targets. Disclose the metrics and targets used to assess and manage climate-related risks.