The TCFD's Role in Emerging Climate Regulations
How Does TCFD Impact Emerging Disclosures?
In the first half of 2022, three major climate-related proposals were released for public comment: The U.S. SEC’s proposed climate disclosure rules, the EU’s European Sustainability Reporting Standards (ESRS), and the International Sustainability Standards Board’s global climate disclosure guidelines. Each of these climate policies are based in large part on the climate disclosure framework created by the Task Force on Climate-Related Financial Disclosures, and understanding the TCFD’s inclusion in these policies is key for companies looking to make climate-related disclosures aligned to one or more of these new rules.
A new Persefoni analysis compares these three proposed climate policies, particularly their alignment with and additions to the TCFD framework. Our analysis reveals several key insights and takeaways, including:
All three major policies, as well as other climate disclosure policies around the world, are based on the TCFD framework’s 11 disclosures.
The SEC’s proposed climate rules differ from those of EFRAG ESRS and ISSB in disclosure of Scope 3 emissions, scenario analysis, and climate-related targets.
Companies should look to the TCFD framework to begin their disclosure preparation while recognizing the divergences that still exist between three policies.
Key Takeaways from Finance Professionals on the State of Climate Reporting
What we heard on the ground in NYC at Financial Executives International’s (FEI) Corporate Financial Reporting Insights (CFRI) Conference 2022
COP27: Better regulation needed to complement initiatives like Gfanz
The fact that initiatives like Gfanz are “cross jurisdiction” is also important “for speed and to promote standards,” said Persefoni's Kristina Wyatt