Unpacking the IFRS announcement about the TCFD
It is bittersweet to learn that the Task-force on Climate-related Financial Disclosures (TCFD), created by the Financial Stability Board in December 2015 in the wake of the Paris Agreement of COP 21, will be disbanded.
2023-07-14
Published by Novisto
It is bittersweet to learn that the Task-force on Climate-related Financial Disclosures (TCFD), created by the Financial Stability Board in December 2015 in the wake of the Paris Agreement of COP 21, will be disbanded. This initiative was as timely as it was effective in accomplishing its mission of “delivering recommendations for consistent company disclosures that would help financial market participants understand their climate-related risks”.
Its recommendations were first rapidly voluntarily adopted by countless organizations, and now they have been fully embedded in the IFRS Sustainability Disclosure Standard S2 on climate-related disclosures, as well as the European Sustainability Reporting Standards (ESRS) E1 on climate change and countless regulatory initiatives at various stages of adoption. Tip of the hat for a job well done!
This week the IFRS Foundation announced that it had been asked by the Financial Stability Board (FSB) to “take over the monitoring of the progress on companies’ climate-related disclosures from the Task Force on Climate-related Financial Disclosures (TCFD)”. This may have caused some confusion as to exactly what responsibilities were being transferred to the standard setting body.
Thankfully, the Financial Stability Board’s 2023 progress report on its Roadmap for Addressing Financial Risks from Climate Change Progress provides a more detailed source of information. This report explains that the TCFD will continue to promote and monitor progress in companies’ adoption of its recommendations and will publish next fall the 2023 edition of its annual Status Report (see the 2022 edition for an example).
It further states that “the publication of this year’s progress report by the TCFD will be its final task. The TCFD will be disbanded, and the FSB will ask the ISSB to deliver a report in 2024 on progress in firms’ disclosures, liaising with IOSCO as appropriate, including early take-up of the ISSB standard for climate-related disclosures and progress in achieving interoperability.” The key here is that the TCFD will be disbanded. Its work will end. (It will not be transferred.)
This makes a lot of sense and demonstrates coherence, rationality, and efficiency on the part of the FSB. Why? Because the recommendations of the TCFD have been completely embedded in both the IFRS S2 climate-related disclosure standard and the European Sustainability Reporting Standards ESRS E1 on climate. They are substantially embedded in countless other regulatory initiatives, including the US SEC’s proposed climate disclosure rules, Canada’s OSFI B-15 for federally regulated financial institutions. The Task Force has indeed accomplished its mission.
The FSB’s 2023 progress report makes for a very interesting read for anyone looking for a comprehensive overview of what’s happening in the global financial sector on climate-related oversight and disclosures. In particular, the Block 1 Disclosures annex (p. 18-27) offers an insightful illustration of the interconnection between the International Organization of Securities Commissions (IOSCO) – a.k.a. the regulators – and the IFRS’s International Sustainability Standards Board (ISSB), the International Auditing and Assurance Standards Board (IAASB) and even the International Ethics Standards Board for Accountants (IESBA), all of which are developing standards on sustainability-related disclosures or the assurance thereof.
The document also offers glimpses of how things are likely to unfold in the coming years in terms of regulators’ adoption of IFRS S1 across the globe. Apparently, we can expect all sorts of guidance, training support, and even capacity building programs for regulators. For corporate reporters, perhaps help is on the way.
More insights from "Novisto"
-
Published by Novisto
2023-09-03
GHG Protocol - updates to the suite of corporate standards
Last month, the GHG Protocol provided a summary of consultation feedback on its carbon accounting…
-
Published by Novisto
2023-07-18
Top ESG Reporting Software of 2023: A Market Overview
Navigating the market for ESG reporting software can be confusing.…
-
Published by Novisto
2023-07-14
ESMA statement on sustainability disclosure in prospectuses
The European Securities and Markets Authority (ESMA) has issued a Public Statement on…
Related insights
-
Published by Informa Connect
2023-08-16
Climate Risk & TCFD Training Course (11 September 2023, London)
Everything you need to know about climate risk analysis and disclosure - a two day practical…
Related insights
-
Published by investESG
2024-05-03
ESRS–ISSB Standards Interoperability Guidance released | IFRS
INSIGHT by the IFRS…
-
Published by Global Reporting Initiative
2024-03-21
Enhancing transparency in the Latin American oil and gas sector
An analysis of opportunities and challenges in climate disclosure…
-
Published by Global Reporting Initiative
2024-03-11
Voluntary disclosure policies lead global sustainability agenda
Major growth in sustainability and ESG policies revealed in latest Carrots & Sticks report…
Related insights
-
Published by Global Reporting Initiative
2024-05-15
Making the Corporate Sustainability Reporting Directive accessible for all
New ‘CSRD Essentials’ series explains the EU's mandatory sustainability reporting requirements…
-
Published by Global Reporting Initiative
2024-05-14
One-in-four major companies report with GRI Tax Standard
Analysis of top 1,000 businesses on use of GRI 207 for tax transparency…
-
Published by investESG
2024-05-03
ESRS–ISSB Standards Interoperability Guidance released | IFRS
INSIGHT by the IFRS…
Related insights
-
Published by investESG
2024-05-03
ESRS–ISSB Standards Interoperability Guidance released | IFRS
INSIGHT by the IFRS…
-
Published by Global Reporting Initiative
2024-04-30
GRI joins the Alliance for Sustainable Enterprises
Leadership role for the development of a sustainability reporting framework for small and medium…
-
Published by investESG
2024-02-16
New methodology for studies on sustainability-related investments across Europe | Eurosif
INSIGHT by Eurosif…
Related insights
-
Published by investESG
2024-02-07
Red flags and green flags: Is your transition plan fit for purpose and greenwashing-proof?
INSIGHT by Reclaim Finance…
-
Published by investESG
2024-01-10
The role of water security in reaching net-zero emissions: energy companies deeply exposed to water risks | CDP
Data released today by the global non-profit, CDP, provides fresh insight into how companies and…
-
Published by investESG
2024-01-08
Moving from pledges to implementation: a guide for corporate just transition action | World Benchmarking Alliance
brief INSIGHT by the World Benchmarking Alliance…