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What Exactly is the TCFD?

If you’re a publicly-traded company, you’ve probably heard the phrase ‘TCFD’ mentioned. What exactly does it mean, and more importantly, what does it mean for your business?

TCFD stands for the Task Force on Climate-related Financial Disclosures. It is a framework for how businesses can disclose the ways in which climate change impacts their business—both from a risk standpoint, but also an opportunity standpoint. More than 1,700 businesses and governments around the world have publicly committed to reporting in alignment with the TCFD. In addition, regulators are increasingly moving towards making TCFD reporting mandatory for publicly traded companies.


The TCFD was launched in 2015 by the Financial Stability Board, which was led by then-Bank of England (and former Bank of Canada) Governor Mark Carney. The purpose was to increase consistency into how the financial community reported on climate change, enhance market transparency and make it easier for stakeholders to understand their exposure to climate risk. There was (and is) no shortage of sustainability reporting taking place, but much of it contains information that is not relevant for investors.

That’s where the TCFD comes in. It was chaired by Mike Bloomberg and consisted of representatives from some of the world’s largest banks, investors, and issuers. In 2017, the TCFD released its final report with a proposed framework for reporting. The framework consists of four themes—governance, risk management, strategy, and metrics and targets—with 11 guiding recommendations, applicable to any business, to use when reporting on climate change.

Global Support

Since 2017, adoption of the TCFD’s recommendations has been gaining momentum. The UK’s Financial Conduct Authority has made it mandatory for premium listed companies to disclose in alignment with TCFD for the fiscal year 2021, requiring a statement in their annual financial report. New Zealand has adopted mandatory TCFD requirements for banks, insurers and asset managers. The Bank of Canada has urged companies to adopt and increase the use of TCFD-aligned disclosure, as have Canada’s eight largest pension funds. Larry Fink, the CEO of Blackrock, issued a letter to their portfolio CEOs in 2020 laying out Blackrock’s expectations that all companies it invests in are expected to produce TCFD-aligned reports. Additionally, under the Biden Administration, the US is expected to bring in new requirements for financial disclosures on climate.

How to Start with the TCFD

Businesses that have traditionally not thought much about climate change are now expected to discuss their climate plans in detail. As a business, where should you start?

At Manifest, we regularly work with clients who are either looking to start disclosing in alignment with the TCFD or enhance what they’re already doing. If you are thinking about the next steps your business should take on TCFD, there are a few important pieces of information to keep in mind:

  1. The TCFD is meant to provide decision-useful information. It’s not meant to be a clearinghouse for every sustainability initiative your business undertakes. The information you disclose is meant to connect to the question ‘how is climate change impacting my business now, and how will it impact us in the future?’
  1. The TCFD is meant to be forward-looking. It is a tool to communicate how your business intends to navigate climate change—both the risks and the opportunities. It’s not solely about what your emissions were over the past decade, it’s about where you’re headed.
  1. It starts with governance. The foundations of corporate climate disclosure start with governance. How does the Board stay informed on climate risk? Does your Board have a committee with responsibility for climate change issues? Strong climate governance tells investors you have the structures in place to recognize and adapt to climate change.
  1. Even if you don’t intend to disclose publicly, going through the exercise of looking at your business through the TCFD lens can be extremely useful. It is designed in a way to explore and unpack the various ways your business will be impacted and can respond to climate. If your business is struggling with trying to understand what climate change means for it and doesn’t know where to begin, the TCFD is a good place to start.

The TCFD recommendations, and supplemental guidance for specific industries, are publicly available on its website. Whether your business is looking to produce or enhance a TCFD report in response to regulatory, investor or stakeholder pressure, Manifest can help you navigate the TCFD process and get you to where you want to go.