The TCFD is a task-force focused on supporting informed, efficient capital-allocation decisions. The group mainly focuses on developing recommendations on how companies should disclosure activity and information to help support better investment decisions in relation to specific risks.
In 2017, the TCFD came out with a specific set of recommendations around climate-related financial disclosures to help companies provide better data and transparency around how their actions affect climate change
The recommendations set forth by the TCFD are focused around four themes:
Along with these 4 main themes, the TCFD aids in helping companies navigate these disclosures by providing seven principles for effective disclosure. These principles cover topics of disclosure that is relevant, specific, transparent, balanced, consistent, comparable between sector, verifiable, and most importantly, timely.
The TCFD recommendations are meant to help inform investors on relevant climate risk but also help provide companies with methods and a process to incorporate climate change into business plans.
Though initially the TCFD recommendations were voluntary, many countries have adopted these as guides for established or proposed disclosures in the U.K, Switzerland, Singapore, Hong Kong, New Zealand, Japan, and even the United States.
As of October 2022, there are over 4,000 supporters of TCFD globally.