More than 1000 organisations have declared their support for the Task Force on Climate-related Financial Disclosures (TCFD) recommendations. However, there is still confusion in the market regarding where companies can get the data from and how to properly report it. To provide this solution, CDP and the Climate Disclosure Standards Board (CDSB) have teamed up to produce the building blocks for effective TCFD-aligned disclosure using CDP data and the CDSB Framework.
TCFD-aligned disclosures should not be seen as novel or daunting, as is often perceived by the market. The good news is that most companies already have the data that they need readily available to make TCFD disclosures. After all, over 8000 companies, including the majority of the world’s largest, disclosed to CDP through its climate change questionnaire in 2019. While the information provided in a CDP response covers much of the same ground as the TCFD recommendations, it is essential for these material climate-related financial disclosures to be included in the mainstream report to meet the expectations and recommendations of the TCFD.
“The consistent and well-structured information contained in your CDP response is the perfect basis for satisfying the TCFD recommendations and making disclosures in mainstream reports against the eleven TCFD recommendations. To do so, companies need to translate their CDP disclosures to meet the expectations of the mainstream report. The CDSB Framework provides the best means for this,” says Paul Simpson, CEO, CDP.
The release of this practical guidance comes at a time when the move to mandatory TCFD disclosure is becoming increasingly more likely. Regulators and companies in regions such as the EU, UK, Japan, New Zealand, Australia and Canada are already acting to prioritise and price climate-related risks throughout their financial systems by means of mainstream disclosure.
“Preparing and reporting on material climate-related risks and opportunities now offers companies two critical advantages. The first being a better understanding of emergent and extraordinary climate-related risks and opportunities, allowing for well-reasoned strategic responses. Secondly, companies can prepare for the inevitability of mandatory TCFD disclosure. It’s not a matter of if, but when”, comments Mardi McBrien, Managing Director, CDSB.
“This guidance is the ideal practical resource to help companies implement the TCFD recommendations in a reliable and investor-useful manner in the mainstream report. The most important thing to remember is that most companies already have the building blocks in place by disclosing to CDP so they are already one step ahead”.
Download “The Building Blocks: Connecting CDP data with the CDSB Framework to successfully fulfil the TCFD recommendations”. www.cdsb.net/buildingblocks