Task Force on Climate-related Financial Disclosures 2020 Status Report

Since the release of its 2017 report and at the request of the Financial Stability Board (FSB), the Task Force has issued two status reports — with this being its third — describing the alignment of companies’ reporting with the TCFD recommendations. This report describes the progress made to date and highlights the challenges of more consistent and robust implementation.

To date, more than 1,500 organizations have expressed their support for the TCFD recommendations, representing an increase of over 85% since the 2019 status report. However, despite the significant momentum, the 2020 Status Report highlights the continuing need for progress in improving levels of TCFD-aligned disclosures given the urgent demand for consistency and comparability in reporting. In particular, disclosure of the potential financial impact of climate change on companies’ businesses and strategies remains low.

Other key findings from the Task Force’s review of company disclosures, insights from users, and other research include:

• On average across the TCFD recommendations, 42% of companies with a market capitalization greater than $10 billion disclosed at least some information in line with each TCFD recommendation in 2019. Furthermore, disclosure levels for these companies exceeded 50% for certain information under the Task Force’s recommendations related to strategy and climate-related metrics.
• Nearly 60% of the world’s 100 largest public companies support the TCFD, report in line with the TCFD recommendations, or both.
• Energy companies and materials and buildings companies are leading on disclosure, with an average level of TCFD-aligned disclosures of 40% for energy companies and 30% for materials and buildings companies in fiscal year 2019.
• Expert users of disclosure identified the impact of climate change on a company’s business and strategy as the “most useful” information for financial decision-making.
• Asset manager and asset owner reporting to their clients and beneficiaries is likely insufficient.
• The report also provides an illustrative ‘roadmap’ for preparers by highlighting insights from expert users on which information is most useful for decision making.