TCFD status report - passing the baton

The recommendations of the Task Force on Climate-related Financial Disclosures are supported by over 4,800 organisations around the world and have been recognised as the 'gold standard' for climate-related disclosures. Charlotte Hill and Daniel Hirschfield consider key observations of the Task Force's sixth and final status report on the TCFD-aligned disclosures by firms and the transition to the International Sustainability Standards Board's disclosure standards.

Charlotte Hillis a partner and head of the Financial Services Regulatory group at Taylor Wessing in London, whereDaniel Hirschfieldis senior counsel - Knowledge. Contact them onc.hill@taylorwessing.com andd.hirschfield@taylorwessing.com.

Background

The Task Force on Climate-related Financial Disclosures (TCFD) was established by the Financial Stability Board in December 2015 with the aim of developing recommendations for more effective climate-related financial disclosures that could promote more informed investment, credit, along with insurance underwriting decisions. The final recommendations of the TCFD were set out in a report published in June 2017. [1] The value of disclosure was emphasised by Michael R Bloomberg, chair of the TCFD, who said that "increasing transparency makes markets more efficient and economies more stable and resilient" and the report observed that "without the right information, investors and others may incorrectly price or value assets, leading to a misallocation of capital". [2]