Today the FSB’s Task Force on Climate-related Financial Disclosures issued its landmark report with a set of recommendations, applicable to organizations across sectors and jurisdictions.
After launching an insightful consultation early this year, the TCFD worked for months to prepare a report which would contain the much awaited recommendations for companies on how to report on climate related issues. The report is finally out today and it lists several concrete points built around governance, strategy, risk management and metrics & targets.
This report highlights that disclosure should be clear, consistent, and relevant, and in doing so it puts the focus on materiality, of paramount importance in the reporting equation. Comparability across sectors, industries and organisations also remains a key principle to be appreciated by reporting entities and other stakeholders.
One of the main stands the Task Force takes is on the strategic importance of reporting climate-related information as part of financial filings, rather than in other sustainability reports. This is a point which gives clear indications as to what reporting should look like for companies going forward. Oriented towards investors and their ability to grasp how companies can face the challenges of climate change, companies are asked to take a ‘risk and opportunities’ approach to explain the way they are contributing to a lower-carbon economy.
Eurosif, who has been a strong advocate of this vision, is very much supportive of this approach. Executive Director, Flavia Micilotta welcomes the approach “as it recognises the value, it must enable investors to have a view on how companies are managing such challenges. A truly ‘functional’ reporting is the only way forward.”
To download the full report, please click here.