What is the Task Force on Climate-Related Financial Disclosures?
- The TCFD seeks to develop recommendations for voluntary climate-related financial disclosures that are consistent, comparable, reliable, clear, and efficient, and provide decision-useful information to lenders, insurers, and investors.
- The TCFD’s 31 members were chosen by the FSB to include both users and preparers of disclosures from across the G20’s constituency covering a broad range of economic sectors and financial markets.
Why is this important?
- Better access to data will enhance how climate-related risks are assessed, priced, and managed. Companies can more effectively measure and evaluate their own risks and those of their suppliers and competitors. Investors will make better informed decisions on where and how they want to allocate their capital. Lenders, insurers and underwriters will be better able to evaluate their risks and exposures over the short, medium, and long-term.
- Though great work has been done by NGOs in this space, as an industry-led initiative, the TCFD represents an opportunity to bring climate-related financial reporting to a mainstream audience.
- The TCFD engages extensively with key stakeholders to ensure that it builds on existing work and produces recommendations that can be used by the private sector, globally.