- established by the Financial Stability Board in 2015
- focus on financial materiality
- but also some impact materiality
- climate focused
- disbanded since 2023
- standards still exist
- nature standard is TNFD
- no industry specifics, just a few extra rules for banks and insurances
Empirical Evidence
- GHG Emissions reporting is very strong
- Scenario Planning reporting is not very strong
Requirements and Prescriptions GPT-4o
TCFD Requirements for Companies
The TCFD requires companies to disclose climate-related financial information across four key areas:
1. Governance
- Board and management oversight of climate-related risks and opportunities.
2. Strategy
- Impact of climate risks/opportunities on business, strategy, and financial planning.
- Resilience of the organization’s strategy under different climate scenarios.
3. Risk Management
- Processes for identifying, assessing, and managing climate-related risks.
- Integration of climate risks into overall risk management.
4. Metrics and Targets
- Metrics used to assess climate risks/opportunities.
- Targets set for managing these risks, including GHG emissions and performance tracking.
Required Quantitative Information:
- GHG emissions (Scope 1, 2, and if possible, Scope 3).
- Financial impacts of climate risks (e.g., revenue changes, asset impairment).
Required Qualitative Information:
- Governance processes around climate risks.
- Climate risk scenarios and strategic response plans.
- Integration of climate risks into risk management and decision-making.