What is TCFD?
As climate change became increasingly important, companies were increasingly likely to face risks that did not appear in their short-term financial statements, which could be a major source of instability in the financial system. To address this issue, the Financial Stability Board (FSB) was requested by the Minister of Finance and the Central Bank Governors at the G20 in 2015. In December 2015, the Financial Stability Task Force (Task Force on Climate-related Financial Disclosures, TCFD) was established to disclose climate-related financial information. After about a year and a half of discussions, the FSB released its final report (TCFD Recommendations) in June 2017. TCFD encourages companies to disclose the following climate-related risks and opportunities:
- Ministry of the Environment (2019), "Climate Change Adaptation Guide for Private Enterprises-To Success in Preparing for Climate Risks"
Recommendations made by TCFD across all sectors
(Source: TCFD (2017), "Recommendations by the Task Force on Climate-related Financial Disclosures on the Final Report (Green Pacific Translation, Inc.)"
TCFD publication
TCFD published the following three reports. 「Final Report Climate-related Financial Disclosure Task Force Recommendations are recommendations and guidance for companies to disclose climate-related financial information. The Annex "Implementation of the Recommendations of the Task Force on Climate-related Financial Disclosures" is a guidance for each industry. The Technical Supplement, "Using Scenario Analysis in Disclosing Climate-related Risks and Opportunities," describes scenario analysis.
