TCFD report finds encouraging progress on disclosure

The Financial Stability Board (FSB) has welcomed the publication of the 2019 Status Report by the industry-led Task Force on Climate-related Financial Disclosures (TCFD) providing an overview of the extent to which company reports from 2018 included information aligned with the core TCFD recommendations published in June 2017.

The Task Force reviewed reports for over 1,100 companies from 142 countries in eight industries over a three-year period. In addition, the Task Force conducted a survey on companies’ efforts to implement the TCFD recommendations as well as users’ views on the usefulness of climate-related financial disclosures for decision-making.

While the TCFD found some of the results of its disclosure review and survey encouraging, it has concerns that not enough companies are disclosing decision-useful climate-related financial information. In summary, the TCFD found that climate-related financial information has increased since 2016, but is still insufficient for investors and that more clarity is needed on the potential financial impact of climate-related issues on companies.

In addition, of companies using scenarios, the majority do not disclose information on the resilience of their strategies.

Michael Bloomberg, Chair of the TCFD said: “We remain encouraged by the continued growth in the number of companies adhering to the guidelines of the TCFD – it means businesses are better informed about the risks they face, and investors are more capable of making sound decisions. However, we’re also clear-eyed about the serious threat that climate change poses. In order to keep people out of harm’s way, and build a more resilient global economy, we need more companies to follow their lead – and soon.”

A total of 785 organisations are now supporters of the TCFD, including the world’s largest banks, asset managers and pension funds, responsible for assets of $118tr.

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