By: Jennifer Coulson, Vice President, ESG, BCI
In the 21st century, climate resilience is a must and the Task Force on Climate-related Financial Disclosures (TCFD) is rapidly becoming the gold standard for reporting on climate-related impacts.
The TCFD is a set of recommendations to help investors assess the resilience of firms and assets in the face of different climate impacts and futures. It was first published in 2017. Now, four years later, nearly 60% of the world’s largest 100 companies either support the TCFD or have published reports in line with the recommendations.
At BCI, we find TCFD disclosures to be hugely informative and helpful for risk management and business strategy. Last fall, we joined seven other Canadian pension plan investment managers (together we have $1.6 trillion assets under management) to ask that companies and investors report relevant ESG data in a standardized way, including by adopting the TCFD framework.
Although the TCFD disclosure process can be daunting, it’s also hugely rewarding. For those at the beginning of their TCFD journey, here are some quick tips to keep in mind:
- You have to start somewhere. It’s not going to be perfect. In order to drive change, your disclosures should evolve year after year. You don’t have to get everything perfect right from the outset.
- Take advantage of the risk management benefits of the TCFD, but don’t forget it’s also a useful tool for business strategy. Your annual TCFD review is an opportunity to reflect on policies and operations. Do you have the right targets and metrics? What progress are you making?
- Integrate the TCFD into your existing processes. If you think of the TCFD as a new process to adopt, it can be a bit overwhelming. Think about how the TCFD can be integrated into your existing strategic decision-making process, governance framework or enterprise risk management process. Make it complementary to what you already do.
For more TCFD insights, check out the GLOBE Capital session where Jennifer Coulson will be speaking: TCFD: Beyond Disclosure to Core Business Strategy.