Taskforce on Climate-related Financial Disclosures (TCFD)
The TCFD is improving the disclosure of climate-related financial information to help investors assess risks.
The Task Force on Climate-related Financial Disclosures (TCFD) was established in December 2015 at the initiative of the G20 finance ministers and central bank governors to improve the transparency and standardization of climate-related financial information. Its main goal is to provide a wide range of stakeholders, including companies, investors, and regulatory authorities, with information on climate-related risks and opportunities. The TCFD has developed a framework that revolves around four core areas: Governance, Strategy, Risk Management, and Metrics and Targets. These areas are specified by a total of 11 recommended disclosures that serve as a guide for companies to report relevant information.Since its inception, the TCFD has played a significant role in the global financial world. By November 2022, over 4,000 organizations from more than 100 jurisdictions—with a total market capitalization of $27 trillion—had supported or integrated the TCFD guidelines. These voluntary disclosures are increasingly gaining importance and are being incorporated into various regulatory frameworks, including in countries such as the United Kingdom, the European Union, and Japan.
The TCFD aims to increase transparency regarding how companies handle climate-related financial risks, enabling investors to make more informed decisions. Furthermore, it promotes the efficient allocation of capital towards more sustainable investments and supports the transition to a low-carbon economy by making both risks and opportunities related to climate change visible.
Although the TCFD was formally dissolved in 2023, its influence on regulatory frameworks and reporting practices worldwide persists. The principles and recommendations of the TCFD have set a new standard for disclosing environmental and climate risks and contribute to making markets more resilient to systemic threats posed by climate change.
