Jennifer Coulson

Tips for TCFD Newcomers

By: Jennifer Coulson, Vice President, ESG, BCI 

In the 21
st 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: 

  1. 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. 
  2. Take advantage of the risk management benefits of the TCFD, but don’t forget it’s also a useful tool for business strategyYour 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? 
  3. Integrate the TCFD into your existing processes. If you think of the TCFD as a new process to adopt, it can be a bit overwhelmingThink 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. 

Rolling Hills

Top 5 Tips for TCFD Disclosure

“In January of last year, I wrote that climate risk is investment risk. I said then that as markets started to price climate risk into the value of securities, it would spark a fundamental reallocation of capital. Then the pandemic took hold – and in March, the conventional wisdom was the crisis would divert attention from climate. But just the opposite took place, and the reallocation of capital accelerated even faster than I anticipated.” – Larry Fink, Chairman and CEO of BlackRock in his 2021 Letter to CEOs


Investors, corporations and governments are uniting around the race to net zero at a phenomenal pace. As these organizations look for ways in which to assess and disclose their resilience to climate change, the Task Force on Climate-related Financial Disclosures (TCFD) has emerged as the gold standard for climate disclosures.

Published in 2017, the TCFD recommendations provide a framework to help investors assess the resilience of firms and assets in the face of different climate impacts and futures. 2020 was a turning point for the recommendations, with the following regulatory and corporate updates:

  • New Zealand became the first country in the world to make TCFD disclosures mandatory. By 2023, a majority of entities, including publicly listed companies, insurers, banks will have to publish TCFD disclosures, on a ‘comply or explain’ basis.
  • The United Kingdom followed suit, introducing mandatory climate-related financial disclosure aligned to the TCFD, beginning with certain financial institutions and listed companies. By 2023, all listed commercial companies, nearly all banks, insurers, asset managers, nearly three quarters of occupational pension schemes and half of all UK-registered large private companies will have to publish TCFD disclosures.
  • The Canadian government required large employers to provide TCFD-aligned disclosures in order to apply for COVID-19 relief funding.
  • Larry Fink, CEO of BlackRock, the world’s largest asset manager, used his annual Letter to CEOs to call for Sustainability Accounting Standards Board (SASB) and TCFD disclosure from companies in which they invest.
  • The CEOs of eight of Canada’s largest pension plan investment managers, the Maple 8, published a statement calling for Sustainability Accounting Standards Board (SASB) and TCFD disclosure.
  • The Commodity Futures Trading Commission (CFTC) in the U.S. authored a report that found that climate change poses a risk to the U.S. financial system. It recommended that the Securities and Exchange Commission strengthen requirements to disclose climate-related risks.
  • By May 2020, nearly 60% of the world’s 100 largest public companies supported the TCFD and/or reported in line with the TCFD recommendations, although there is room for improvement in the level of disclosure.

Momentum is unlikely to slow in 2021, especially in light of a new U.S. federal administration that has made addressing climate change an urgent priority.

With TCFD enthusiasm reaching new heights, you may be asking yourself, “Is this right for my company?” The short answer is “yes”.

Regulators are moving to align emerging climate disclosure requirements to the TCFD, and an increasing number of institutional investors have demanded that firms align their disclosure to it. This signals market awareness and demand for climate-related financial disclosures, meaning TCFD disclosures may soon become ‘table stakes’ or a given for large corporations.

Why? Because according to Mark Carney, former Governor of the Bank of Canada and Governor of the Bank of England, and current United Nations (UN) Special Envoy on Climate Action and Finance, the TCFD “represents the best views of the private sector of what is decision useful, capturing the opinions of both the companies that must access finance and of the providers of capital from across the financial system.”


We know a first-time TCFD report can be daunting. To help your organization succeed, we’ve prepared the following top five TCFD tips:

1. Use the TCFD as a Framework to Tell Your Sustainability Story in a Common Language

TCFD disclosures are one way the private sector, regulators, and other key stakeholders can move towards “speaking the same language” when it comes to climate-related risks and opportunities. The climate disclosure landscape is beginning to coalesce around the vocabulary used by the TCFD for climate-related information. For example, reporting frameworks like CDPUN Principles for Responsible Investing (PRI), Sustainability Accounting Standards Board (SASB), and Global Reporting Initiative (GRI) are mapping their climate-related disclosures to align with TCFD recommendations.

You can use the TCFD recommendations (a) as a conversation starter with your investors and internal management around business strategy and financial planning, (b) to connect the dots between governance, business strategy, risk management and operational performance on climate-related issues, and (c) as a jumping-off point to examine how your business will be resilient in the face of climate-related uncertainties.


2. Just Get Started, Then Improve Over Time

Corporations and investors around the world representing over $12.6 trillion in market capitalization have expressed their support for the TCFD, and this support is will continue to grow. Disclosure that is consistent with TCFD recommendations is an iterative process that companies will improve and perfect over time. Getting started signals your intention to be transparent and provide stakeholders with relevant information. It also allows you to build internal capacity for enhancing governance and management of climate-related issues. For a first disclosure, the key is to demonstrate to stakeholders that your company is asking the tough questions.


3. Every Industry is Different

Every company is exposed to climate-related risk to some extent, but the financial impacts of climate-related risks and the opportunities differ by sector. The TCFD provides supplemental guidance for financial institutions (banks, insurers, asset owners, asset managers) and non-financial sectors (energy, transportation, materials and buildings, and agriculture, food and forestry).

Disclosure aligned with TCFD recommendations requires a thorough understanding of the specific climate risks and opportunities that are relevant to your company and industry, whether your organization is in energy and utilities, mining,  financial services,  or even if you are a municipality. Focus on macro climate trends and how your company is responding.


4. Both the “What” and the “How” of Disclosure Matter

A best-in-class TCFD disclosure includes relevant climate-related information and is clearly structured across four categories: governance, strategy, risk management and metrics and targets. The TCFD recommends that disclosures be included in annual financial filings.

For now, implementation of the recommendations varies in practice. Some TCFD disclosures are published in stand-alone reports, others are integrated into sustainability reporting. Best practice is still emerging and is unlikely to be set for the next few reporting cycles. The key is to align as closely to the recommended structure and disclose in a way that makes sense for your organization and is transparent for stakeholders. And remember, this is just as much about climate-related risk management as it is about identifying climate-related opportunities for your organization. Take the long view by setting metrics and targets. If you are undertaking climate scenario analysis for the first time, start with known scenarios and a qualitative assessment, adding more rigour and financial quantification over time.


5. TCFD Disclosure is One Part of a Larger Toolbox for Managing Climate Risks and Opportunities

Preparing a TCFD disclosure requires engaging numerous internal stakeholders across different parts of the business. The TCFD provides a strong structure for your organization to think about the work you have done and plan to do related to climate change. It also lends itself well to iterative conversations and long-term thinking around strategy and financial planning related to climate change.

TCFD disclosure is likely just one component of the work your organization has or will undertake in the face of climate-related risks and opportunities. It is one step on your larger journey, providing you with the tools to think about and discuss long-term changes that will impact your organization.


For a deep dive into the TCFD Recommendations, join us at GLOBE Capital for TCFD: Beyond Disclosure to Core Business Strategy. Register today at

Jessica Butts is a Senior Director and Emile Lavergne and Puninda Thind are Consultants with The Delphi Group. For more information on TCFD disclosure and/or to grow your organization’s climate leadership, feel free to reach out to any one of them directly: Jessica ( | Emile ( | Puninda (

Scenario Analysis

What You Need to Know About Scenario Analysis

By Ingrid Hoffmann, Consultant at The Delphi Group

Climate disclosure is closer than ever to becoming a part of mainstream financial reporting. One of the initiatives bringing it into the mainstream is the Task Force on Climate-Related Financial Disclosures (TCFD). Chaired by Michael Bloomberg, the TCFD is a private-sector led initiative under the G20. It has crafted a series of recommendations for climate change disclosure that apply to all industries (find out more). To date, more than 100 companies (including Barrick Gold, Shell and Unilever) around the world have signed up to support the TCFD and implement the recommendations. In addition, a combined 390 investor groups representing more than USD $22 trillion in assets signed a letter called upon G20 leaders to support the TCFD recommendations.

Opening Remarks TCFD

Scenario analysis: The new frontier

The recommendations are ambitious, and among the most challenging is scenario analysis. What does the TCFD mean by scenario analysis? That companies, ‘Describe the potential impact of different scenarios, including a 2-degree scenario, on the organization’s businesses, strategy, and financial planning.’

Scenario analysis in the context of climate change is an entirely new exercise for most companies. Because of investor pressure, companies are scrambling to conduct scenario analyses at a time when no best practices or standards exist for most sectors.

In light of this challenge, the TCFD held its first-ever North American event on the topic of scenario analysis on May 1st in New York. I was lucky enough to attend, alongside approximately 200 investors, issuers, regulators, and others. Over the course of the day, it became clear to me that it will take several years to agree on what scenario analysis should ultimately look like.

To standardize the scenarios…or not to standardize

The reporting community (including issuers, investors, non-profits and governing bodies) has not yet reached a consensus on how standardized scenarios ought to be. The TCFD built a small degree of standardization into the recommendations by suggesting all companies use a 2-degree scenario. At the moment, companies can determine what those 2-degree scenarios look like, and which other scenarios they decide to use (the recommended number is three to four in total).

On one end of the spectrum, advocates like Stan Dupre, CEO of The 2° Investing Initiative, propose that a third-party organization choose and design the scenarios that all companies use. This would (1) reduce costs, (2) eliminate the ability of firms to choose scenarios that are favourable to their existing business strategies, and (3) improve comparability for investors. This is the direction TCFD panelists, governing bodies, investors and non-profits largely leaned towards.

On the other hand, at the event Val Smith, Managing Director and Global Head of Corporate Sustainability at Citi, made the argument that complete standardization would undermine the value of projecting many different futures between companies, as you never know which one may be true. This position was favoured by issuers.

Today we are slowly moving in the direction of a middle ground. There are some industries, like banking, that are banding together through initiatives like the UNEP FI TCFD implementation pilot project to standardize scenarios for their sector.

A growing number of open-source and free resources are being made available to help companies with scenario analysis through organizations like the The 2° Investing Initiative, the Climate Disclosure Standards Board (CDSB), and the TCFD itself. These resources will reduce the barriers to entry for smaller companies, and reduce the variability in scenarios being used. Meanwhile, there will still be space for bigger firms with more complex climate risks to design their own scenarios. Whatever the final product looks like, it will take years of practice and negotiation to reach a standard approach.

TCFD Knowledge Hub

Three tips for companies thinking about scenario analysis

While the future of scenario analysis may be unclear, I left the event with a few key take-aways that can help guide companies today:

  1. Choose scenarios that are the most consequential to your business – Scenarios are not intended to be chosen based on their likelihood. They are not forecasts. When determining which scenarios to use, according to Peter Schwartz, Senior Vice President of Strategic Planning at Salesforce and former member of the Shell Scenarios Team, “It’s not a matter of which scenarios are the most right, it’s a question of which are the most consequential, and which ones would you regret not thinking about if they were to happen.”
  1. Report substantively – For those companies that are reporting on scenarios now, few are commenting on the impacts on their business models. Investors will be less forgiving in the future to companies that do not appear to have a plan. According to Danielle Sugarman, Vice President of Investment Stewardship at BlackRock, “We want to avoid a box-ticking exercise, where companies say they’ve achieved what has been requested but without providing any meaningful information.”
  1. Disclose material climate risks in financial filings – Many companies have resisted incorporating the TCFD recommendations in financial filings, citing legal barriers such as liability exposure arising from making forward-looking statements about climate-related risks. However, liability from reporting on climate change in financial filings is a red herring. According to Curtis Ravenel, Global Head of Sustainable Business and Finance at Bloomberg L.P. and member of the TCFD Secretariat, “A company is liable for not appropriately reporting on climate risk regardless of where the reporting occurs.” Ultimately, a company can reduce its risk of liability by disclosing according to the guidance of the TCFD, whether in financial filings or not. A company should instead approach the question of whether to include scenario analysis in financial filings by considering the materiality of climate risk.

When it comes to scenario analysis, there will be a lot of information to sift through over the coming months and years in terms of resources available, best practices emerging from different industries, opportunities for collaboration, and regulations that are starting to incorporate TCFD standards. We’ll be watching this evolution with a keen eye and will keep you updated on key developments.

Ingrid Hoffmann is a consultant with The Delphi Group. If you are a Delphi client and you would like to hear more about the TCFD Scenario Analysis session, please contact Ingrid at