The Taskforce on Climate-related Financial Disclosures (TCFD) was established by the Financial Sustainability Board in 2015 to address a lack of transparency surrounding climate-related risk in companies’ annual reports. The TCFD was tasked with developing recommendations on suggested information for companies to disclose that would enable investors, lenders, and insurance companies to transparently ascertain the financial risk related to climate change. In 2017, the TCFD released four core thematic areas where companies were likely to perceive climate risk, as well as a further 11 disclosures beneath these areas. The TCFD therefore establishes a set of guiding principles for companies to assess their climate-related financial risks.
The key thematic groupings and their related disclosures can be seen in the graphic below:
Image: TCFD, Recommendations of the Task Force on Climate-related Financial Disclosures, June 2017, p. 14.
In late 2023, with the incorporation of the TCFD recommendations into the International Finance Reporting Standards, the Taskforce was deemed to have completed its required activity and was disbanded. The International Finance Reporting Standards have been tasked with ongoing monitoring of company progress towards climate-related disclosures.
In Australia, the Federal Government is currently consulting on the introduction of mandatory climate-related financial disclosures, the reporting for which would be aligned with the TCFD principles.
