All terms

TCFD (Taskforce on Climate-related Financial Disclosures)

Framework for reporting on climate-related financial risks and opportunities.

What is TCFD (Taskforce on Climate-related Financial Disclosures)?

The Task Force on Climate-related Financial Disclosures (TCFD) is a global initiative established by the Financial Stability Board (FSB) that provides a framework for companies and financial institutions to disclose climate-related financial risks and opportunities. Its recommendations cover governance, strategy, risk management, and metrics and targets.

Why is TCFD (Taskforce on Climate-related Financial Disclosures) important?

The TCFD is important because it brings consistency and comparability to climate-related financial disclosures, enabling investors, lenders, and insurance underwriters to appropriately assess and price climate-related risks and opportunities. By encouraging transparent reporting, it helps shift capital towards sustainable and climate-resilient investments, strengthening financial stability.

Related terms

Want to explore this topic further? Browse connected glossary terms below.

Paris Agreement

International treaty on climate change, aiming to limit global warming.

Regulations
LULUCF Regulation (Land Use, Land Use Change and Forestry)

EU rules for accounting GHG emissions and removals from land use.

Regulations
TNFD (Taskforce on Nature-related Financial Disclosures)

Framework for reporting on nature-related risks and opportunities.

Regulations

Frequently asked questions

What are the four core elements of the TCFD recommendations?

The four core elements are: Governance (disclosure of the organization's governance around climate-related risks and opportunities), Strategy (actual and potential impacts of climate-related risks and opportunities on the organization’s businesses, strategy, and financial planning), Risk Management (how the organization identifies, assesses, and manages climate-related risks), and Metrics & Targets (metrics and targets used to assess and manage relevant climate-related risks and opportunities).

Is TCFD reporting mandatory?

In some jurisdictions (e.g., UK, New Zealand), TCFD-aligned reporting has become mandatory for certain entities. Globally, it is widely recognized as a leading framework and is increasingly adopted voluntarily.

How does TCFD differ from carbon accounting standards (e.g., GHG Protocol)?

TCFD focuses on the financial implications of climate risks and opportunities for the business, while carbon accounting standards (like GHG Protocol) provide methodologies for quantifying actual greenhouse gas emissions. They are complementary.