In December 2015, the international Financial Stability Board established an industry-led task force: the Task Force on Climate-related Financial Disclosures (Task Force), to help identify the information needed by investors, lenders, and insurance underwriters to appropriately assess and price climate-related risks and opportunities.
The Task Force was asked to develop voluntary, consistent climate-related financial disclosures that would be useful to investors, lenders, and insurance underwriters in understanding material risks.
Task Force Recommendations
On 29 June 2017, the Task Force released its Final Report, with four widely adoptable recommendations on climate-related financial disclosures that are applicable to organizations across sectors and jurisdictions, including banks, insurance companies, asset managers, and asset owners:
- Governance – Disclose the organization’s governance around climate-related risks and opportunities
- Strategy – Disclose the actual and potential impacts of climate-related risks and opportunities on the organization’s businesses,
strategy, and financial planning where such information is material.
- Risk Management – Disclose how the organization identifies, assesses, and manages climate-related risks.
- Metrics and Targets – Disclose the metrics and targets used to assess and manage relevant climate-related risks and opportunities where such information is material.
The Task Force recommends that preparers of climate-related financial disclosures provide such disclosures in their mainstream (public) annual financial filings.
Three key documents that serve as building blocks to describe and support implementation of the Task Force’s recommendations.
- Final Report: Recommendations of the Task Force on Climate-related Financial Disclosures
- Annex: Implementing the Recommendations of the TCFD
- Technical Supplement: The Use of Scenario Analysis in Disclosure of Climate-Related Risks and Opportunities
About the Task Force
The 32-member Task Force members were selected by the Financial Stability Board and come from various organizations, including large banks, insurance companies, asset managers, pension funds, large non-financial companies, accounting and consulting firms, and credit rating agencies.