glossary

TCFD Reporting

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What is TCFD Reporting?

In 2017, the Task Force on Climate-related Financial Disclosures (TCFD) released a number of recommendations on climate-related financial disclosures to provide financial markets with clear, comprehensive and high-quality information on the impact of climate change. 

The information helps investors gain an understanding of how reporting organisations think about and assess climate-related risks and opportunities. Moreover, it provides guidance to assist all businesses in developing climate-related financial information that is consistent with the recommended disclosures.

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Is TCFD Reporting Mandatory?

From April 2022 onwards, TCFD reporting will become mandatory for around 480 premium listed companies and more than 1,500 UK registered companies with more than 500 employees and more than £500m in annual turnover. Organisations affected by that mandate will be required to list in their annual report whether their disclosures are consistent with the recommendations of the TCFD. The UK becomes the first G20 country to mandate large businesses to disclose their climate-related risks and opportunities. 

‍TCFD Recommendations

The TCFD has developed 4 recommendations on climate-related financial disclosures that are applicable to organisations across a range of sectors. 

Governance: Disclose the board’s and management’s role in assessing and managing climate-related risks and opportunities 

Strategy: Disclose the actual and potential impacts of climate-related risks and opportunities on the organisation’s businesses and strategy

Risk Management: Disclose how climate-related risks get identified, assessed, and managed by the organisation 

Metrics and targets: Disclose the metrics and targets that are used to assess and manage relevant climate-related risks


What are the TCFD Reporting Requirements?

Premium Listed Companies & Standard Listed Companies:

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- Climate-related disclosures must be aligned with all 4 TCFD recommendations, including Metrics and Targets (all Scope 1 and 2 emissions, Scope 3 when applicable)

- Disclosure on a “comply or explain basis”

- Including a detailed Compliance Statement 

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Traded companies with >500 employees or Public Interest Entities (PIEs) or

UK registered Co. and LLPs with >500 employees and a turnover of >ÂŁ500m or

UK registered Co. with securities admitted to AIM (>500 employees):

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- Climate-related disclosures must be aligned with all 4 TCFD recommendations, including Metrics and Targets (all Scope 1 and 2 emissions, Scope 3 when applicable)

- Disclosure on a “comply or explain basis”

- Not as granular as the Premium Listed Companies

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If you would like to learn more about UK carbon reporting requirements, head over to our blog.