We get a number of great questions on TCFD disclosure, so we have compiled a list of the most frequently asked TCFD questions in an article combining all the frequently asked questions (FAQs).
1. What type of organizations can disclose using the TCFD recommendations?
All organizations globally can disclose under the TCFD recommendations. However, the TCFD particularly encourages disclosure from companies with public debt and equity, as well as asset managers and owners.
2. Is TCFD reporting mandatory?
No, disclosure under the TCFD recommendations is a voluntary way of reporting. However, some countries are looking at mandating it in the future; for example, the UK Government is expecting publicly funded financial bodies, publicly listed UK companies, pension funds, and asset managers to adhere to the TCFD recommendations by 2022, and is also considering making TCFD disclosure mandatory after 2022.
3. In which report should an organization disclose the TCFD’s recommendations?
The TCFD encourages disclosure in mainstream public annual financial filings. However, it is up to companies where they report and disclosures do not have to be public. The TCFD recommendations can also be aligned with other reporting frameworks such as CDP, GRI and SASB.
4. How long should the resulting disclosures be?
This is dependent on each company. The TCFD does not expect the disclosures to add significantly to the length of existing reporting.
5. What is “scenario analysis”?
Scenario analysis refers to recommended disclosure Strategy (c) which asks organisations to describe the resilience of their strategies, taking into consideration different climate-related scenarios, including a 2°C or lower scenario. This helps companies to consider potential scenarios that are different from business-as-usual and to evaluate how their strategies might perform under those circumstances.
6. Is there a deadline for implementing the recommendations?
There is no deadline for disclosing under the TCFD’s recommendations. Companies can choose when to report and in which report.
7. When should I start?
The TCFD encourages organizations to adopt and implement the recommendations as soon as possible. The sooner a company starts the process, the better prepared it will be to collect data, develop a strategy and comply with any legislative changes.
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