FAQ: Is TCFD reporting mandatory?
TCFD or Task Force on Climate-related Financial Disclosures reporting is now mandatory for organisations headquartered in the UK with more than 500 employees for the financial year’s (22/23) annual reports and onwards. It is likely the US and Canada will follow mandatory disclosure for listed companies in the next financial year. The TCFD is an industry-led initiative established by the Financial Stability Board (FSB) designed for consistent climate-related financial disclosures. Organisations are encouraged to follow TCFD reporting and recommendations. TCFD recommendations are becoming widely recognised and supported by investors, regulators, and other stakeholders, with many investors increasingly demanding that companies disclose information in line with the TCFD recommendations as part of their investment decisions. Countries like the United Kingdom, have already made it mandatory for large companies to report their greenhouse gas emissions and climate impact, making this information readily available to investors and stakeholders. Although TCFD reporting is currently voluntary outside of the UK, it is becoming increasingly important for companies to undertake TCFD reporting and recommendations in order to display their dedication to sustainability and transitioning to a low-carbon economy.