The key requirements across the four pillars in the TCFD framework include the following:
Governance: Describe the oversight of the board and management on climate-related risks, including the competence and level of expertise brought in by third-party consultants.
Strategy: Include a narrative discussion and analysis on how climate-related risks have affected or are likely to affect the company strategy, financial planning, business model and outlook, including the role of renewable energy certificates and offsets, internal carbon prices and scenario analysis.
Risk management: Break down the material impact of climate-related risks on financial statements over short, medium and long terms, as defined by the registrant. Outline the process for identifying these risks and how they are incorporated into existing risk management frameworks. The risk management disclosure will need to describe if the registrant will adapt, mitigate, or avoid physical risks, and any transition plans.
Metrics and targets: Disclose scope 1 and scope 2 emissions disaggregated by greenhouse gas and in total (tonnes of carbon dioxide equivalent), both in absolute terms and in intensity per revenue and unit of production. Scope 3 emissions and intensity are required if they are material or if they are part of the registrant’s reduction target, except for smaller reporting companies which are exempt from scope 3 reporting. The consolidation approach for the organisational boundaries should be consistent with financial statements.
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