Globally consistent and comparable disclosures by companies of their climate-related financial risks are increasingly important to market participants and financial authorities as a means to give financial markets the information they need to manage risks, and seize opportunities, stemming from climate change.
The FSB supports the recommended approach by the Trustees of the IFRS Foundation to initially focus on standards for climate-related financial disclosures, as an important initiative to promote globally consistent disclosures and avoiding fragmentation. The FSB strongly encourages the IFRS Foundation to build on the work of the Task Force on Climate-related Financial Disclosures (TCFD), by using the TCFD recommendations as the basis for standards for climate-related financial disclosures.
The TCFD recommendations set out a comprehensive framework that has been developed by, and is directly responsive to the needs of, users and preparers of financial filings across a range of financial and non-financial sectors around the world and has attracted widespread support from users and preparers. Future international standards that build on the TCFD recommendations can be complementary, while providing additional standardization and further details to promote greater consistency and comparability of disclosures. This would ensure that steps by the official sector and private sector are well aligned in promoting globally consistent disclosures and avoiding fragmentation.