TCFD - Climate Disclosure Standards
| Climate Disclosure Standards (TCFD) | |
| Source: | Climate Disclosure Standards Board (TCFD) |
| Sector: | Finance |
| Prerequisites: | none |
| Classification | Individual institutional level; systemic/structural once critical mass achieved |
| Potential Impact: | High |
| Resource Impact: | Moderate |
| Timing Implications: | Immediate |
| Country/Region | Global |
| Application to Armenia | The Recommendations of TCFD would provide Armenian companies a solid and internationally accepted foundation for immediate adoption and flexible enough to accommodate evolving practices. Through these recommendations, Armenian companies would promote board and senior management engagement on climate-related issues and bring the “future” nature of issues into the present through scenario analysis. TCFD supports the understanding of financial sector’s exposure to climate-related risks, and designed the recommendations to solicit decision-useful, forward looking information on financial impacts. |
The Climate Disclosure Standards Board is an international consortium of business and environmental NGOs committed to advance and align the global mainstream corporate reporting model to equate natural capital with financial capital.
The Task Force on Climate-Related Financial Disclosures (TCFD) offers companies a framework for reporting environmental information with the same rigor as financial information. In turn this helps them to provide investors and regulators with decision-useful and compliance-ready environmental information via the mainstream corporate report, enhancing the efficient allocation of capital.
The TCFD recommendations are designed to solicit consistent, decision-useful, forward-looking information on the material financial impacts of climate-related risks and opportunities, including those related to the global transition to a lower-carbon economy. They are adoptable by all organizations with public debt or equity in G20 jurisdictions for use in mainstream financial filings.
The TCFD structured its recommendations around four thematic areas that represent core elements of how organizations operate: governance, strategy, risk management, metrics and targets. These thematic areas are designed to interlink and inform one another.
In addition to its recommendations, TCFD also serves as knowledge hub by providing information on best practice, case studies and other useful resources on how organizations incorporate the TCFD recommendations.
Recognizing that climate-related financial reporting is still evolving, the Task Force’s recommendations provide a foundation to improve investors’ and others ability to appropriately assess and price climate-related risk and opportunities. The Task Force’s recommendations aim to be ambitious, but also practical for near-term adoption. The Task Force expects to advance the quality of mainstream financial disclosures related to the potential effects of climate change on organizations today and in the future and to increase investor engagement with boards and senior management on climate-related issues.
The Task Force recognizes the challenges associated with measuring the impact of climate change but believes that by moving climate-related issues into mainstream annual financial filings, practices and techniques will evolve more rapidly. Improved practices and techniques, including data analytics, should further improve the quality of climate-related financial disclosures and, ultimately, support more appropriate pricing of risks and allocation of capital in the global economy.