The Task Force on Climate-Related Financial Disclosures (TCFD) established by the Financial Stability Board (FSB) in 2016, has launched consultations on updates to its 2017 guidance.
It should be noted that the timing is perfect: a new organization within the IFRS Foundation – the International Sustainability Standards Board (ISSB) is preparing to begin work on an international system of standards. Its work will be based on the TCFD’s climate disclosures guide and other global developers, and the standards themselves, at least initially, will focus on climate, and only then on social issues and corporate governance.
The authors of the 2017 guide acknowledge that at the time of the release of the previous version, they were aware of significant limitations of reporting certain metrics, as well as the nature of climate-related reporting in general. They knew that disclosure practice would continue to evolve into a full-fledged global system.
And so it happened, their predictions came true. As an example, in addition to the already mentioned establishment of the ISSB as a developer of new international standards, we can also mention last year's ‘prototype’ of a single standard on climate-related disclosure of the five most influential developers today (CDP, CDSB, GRI, IIRC, SASB) and IOSCO initiative by the International Organization of Securities Commissions, which has expressed its full support for the IFRS Foundation on the establishment of the ISSB and promises active cooperation on the part of all its key stakeholders.
Thus, the last four years (and especially the last year) have been marked by a very sharp increase of climate-related reporting, so TCFD proposes to read the previous version of its updated guidance on the disclosure of ‘climate-related metrics, targets and transition plans’ as it named in the original. Consultations on the previous version will end on July 7, while the final version should be released by the fall.