Strategy & Reporting

TCFD

What is TCFD?

The Taskforce on Climate-related Financial Disclosures (TCFD) was established in 2015 by the Financial Stability Board to provide a set of recommendations for effectively reporting climate-related risk. The focus is to improve the consistency and transparency of climate-related financial disclosures to improve both internal and external understanding of climate-related risks and opportunities and encourage a shift to reduce corporate impact on climate change. The TCFD recommendations are structured around four thematic areas that represent core elements of how organisations operate: Governance, Strategy, Risk Management and Metrics and Targets. 

Since the release of the recommendations the demand for climate-related disclosure has increased significantly

Currently 1,700+ companies publicly declared support for the TCFD and its recommendations with a global presence in 77 countries

Why TCFD?

For reporting periods beginning on or after April 6, 2022, the UK’s largest companies and financial institutions are required by law to disclose climate-related financial information in line with the recommendations of the Taskforce on Climate-related Financial Disclosures (TCFD).

The UK has become the first G20 nation to make TCFD reporting mandatory by law. The regulation affects UK’s largest traded companies, banks and insurers, as well as private companies with over 500 employees and £500 million in turnover. Longevity Partners welcomes this decision, which is aligned with the government’s commitment to making the UK financial system the greenest in the world.

How can TCFD benefit your business?

TCFD reporting should not be seen as exclusively relevant to the largest companies and institutions, who are now mandated to do so. In fact reporting provides several benefits for all companies:

  1. Early reporting and disclosures will place you ahead of your peers and will ensure you are prepared for when reporting becomes mandatory for your company.
  2. TCFD climate-related disclosures will be more consistent and therefore more comparable.
  3. Improved understanding of climate-related risks and opportunities within your company will facilitate better risk management, strategic planning and decision making.
  4. It will be easier to meet disclosure requirements to report material information in financial filings.
  5. Improved investor confidence in your company’s assessment and management of climate-related risks will improve access to investor capital.
  6. An overall increase in understanding of financial implications of climate change will drive markets to channel investment into climate solutions and business models.

How can Longevity help you?

Longevity Partners can support you in the design of strategy, assessment and disclosure process that address the four pillars of the TCFD.

Through our three-step approach (listed below), the four thematic areas will be addressed at every stage of the project development to ensure preparation for TCFD disclosures and a business resilient to the climate-related risks posed to the organisation and its assets.

Review:

  • Previously undertaken physical and transition climate-related risk assessments
  • Current climate/sustainability strategy, including any targets set
  • Governance and management frameworks
  • Risk management processes, including for existing assets and new acquisitions
  • TCFD reporting style of closest peers (recommended 5-10) based on publicly available information. 

Report:

  • Draft disclosure statement for integration within annual report, in alignment with TCFD recommendations.
  • Framed using Longevity Partners’ standard TCFD-aligned template with tailoring based on the needs of the client.
  • Assistance with any feedback or questions that may be raised during the assurance period.

Analyse:

  • Upon delivery of the TCFD-aligned report, Longevity Partners will provide a gap analysis stating how to improve upon disclosures for the next reporting period.

Further to this, Longevity Partners can offer climate-related risk assessments on an asset and portfolio basis, in addition to advice on how to enhance climate considerations within corporate governance, strategy, risk management and within metrics and targets set.

 

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