The Task Force on Climate-Related Financial Disclosures has published its fifth annual status report on the implementation of its recommendations on climate-related financial disclosures (the TCFD Recommendations).
The Task Force published its TCFD Recommendations in June 2017 to help companies produce disclosures that show how they measure and respond to climate change risks. Under the Listing Rules, premium listed companies are required to report climate-related information in line with the TCFD Recommendations on a comply or explain basis for financial years starting on or after 1 January 2021. This disclosure requirement was extended to standard listed companies for financial years beginning on or after 1 January 2022 (see our briefing on the requirements for listed companies here) and to all large UK-incorporated companies for financial years beginning on or after 6 April 2022 (see our briefing here).
The findings in the report include that:
- whilst 80% of the companies reviewed made disclosures in line with at least one of the 11 recommended disclosures of the TCFD (the TCFD Recommended Disclosures), only around 40% disclosed in line with at least five and just 4% disclosed against all 11; and
- the lowest level of disclosures across the TCFD Recommended Disclosures were made in relation to the resilience of companies' strategies under different climate-related scenarios (TCFD Recommended Disclosure C under Strategy), with disclosures made on climate-related risks and opportunities remaining the most common (TCFD Recommended Disclosure A under Strategy).
The report also contains examples of best practice disclosures made against each of the 11 TCFD Recommended Disclosures.
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