Only 4% of companies disclosing in line with full TCFD 

October 26th, 2023

Just 4% of companies are reporting in line with all 11 of the Taskforce on Climate-related Financial Disclosures (TCFD) recommendations, according to its latest status report.

The TCFD found companies reported in line with an average of 5.3 of the taskforce’s 11 recommended disclosures during the 2022 financial year. Although this was an improvement on 2020, when companies were found to be reporting in line with 3.2 of the disclosures, it noted that more progress was needed.

The TCFD outlines 11 recommendations covering governance, strategy, risk management and metrics and targets. The recommendations are designed to help companies understand what information should be included in their mainstream financial findings.

Michael Bloomberg, chair of the TCFD and founder of Bloomberg, said: “This final report makes clear that we have made tremendous strides in bringing greater transparency to financial markets for both climate-related risks and opportunities.

“While there is still much more work to do, this progress provides the forward momentum necessary to more fully integrate climate data into the global economy and spur more private investment in clean energy.”

While the majority of company disclosures are not fully in line with the TCFD recommendations, research by Minerva shows 82.8% of companies in the Solactive GBS Developed Markets Large- and Mid-Cap index directly reference some TCFD guidelines in their financial disclosures. 

This consistent with the TCFD’s findings that disclosures have improved since 2020, with more companies attempting to follow all the recommendations. 

In the UK, 100% of the companies surveyed reported directly referencing the TCFD guidelines after the UK became the first G20 country to enshrine mandatory TCFD-aligned reporting for its largest companies and financial institutions in 2022.

However, the Financial Conduct Authority (FCA) found several reporting gaps and areas for improvement in its 2022 review. The detailed analysis found 90% of companies had made disclosures consistent with the TCFD framework, but some were very limited in content.