This report from the Task Force on Climate-related Financial Disclosures (TCFD) is an annual report on TCFD-aligned disclosures by firms.

The latest status report finds that disclosure of climate-related financial information aligned with the TCFD recommendations has accelerated over the past year, growing by nine percentage points in 2020 compared to four percentage points in 2019 in the prior year and finds that over 50% of firms disclosed their climate-related risks and opportunities.

More specifically, the status report finds that:

  • Disclosure increased more between 2019 and 2020 than in any previous year assessed, consistent with global momentum around climate-related reporting. However, significant progress is still needed as an average of only one in three companies reviewed disclosed climate-related information aligned with the TCFD recommendations.

  • Companies remain more likely to disclose information on their climate-related risks and opportunities (Strategy a in the TCFD recommendations), than on any other recommended disclosure, with over half of the companies reviewed including such information in their 2020 reports.

  • Disclosure of the resilience of companies’ strategies under different climate-related scenarios (Strategy c in the TCFD recommendations), although still the least reported recommended disclosure, encouragingly increased from 5% of companies in 2018 to 13% in 2020.

  • Although the TCFD recommends disclosure of governance regardless of materiality, the Governance recommendation remains the least disclosed recommendation with the two Governance recommended disclosures the second and third least disclosed.

  • Materials and buildings companies now lead on disclosure. The average level of disclosure across the 11 recommended disclosures for fiscal year 2020 was 38% for materials and buildings companies.

  • The insurance industry significantly increased its average level of disclosure by 11 percentage points between 2019 and 2020, and now leads all groups by at least 15 percentage points in disclosure of risk management processes (Risk Management b in the TCFD recommendations).

  • Europe remains the leading region for disclosures, with average level of reporting across the 11 recommended disclosures from fiscal year 2020 now at half of European companies assessed. European companies have increased their average disclosure by 15 percentage points since 2019, and now disclose 16 percentage points more than the next closest region.

More than 2,600 organisations have expressed their support for the TCFD recommendations, an increase of over a third since the 2020 status report. These supporters include 1,069 financial institutions, responsible for assets of $194 trillion. TCFD supporters now span 89 countries and nearly all sectors of the economy, with a combined market capitalization of over $25 trillion — a 99% increase since last year.

The status report further notes that, as support from the private sector has grown, governments around the world have begun to codify aspects of the TCFD recommendations into policy and regulation, using the TCFD’s work as a foundation for climate-related reporting requirements. In addition to the support of dozens of regulators and supervisors, Brazil, the European Union, Hong Kong, Japan, New Zealand, Singapore, Switzerland, and the United Kingdom have announced requirements for domestic organizations to report in alignment with the TCFD recommendations. The IFRS Foundation is establishing an International Sustainability Standards Board (ISSB) to develop a baseline global sustainability reporting standard, built from the TCFD framework and the work of an alliance of sustainability standard setters.

The TCFD has also published alongside the 2021 status report two additional documents:

The FSB has asked the TCFD to continue its work to promote and monitor progress in firms’ take-up of its recommendations, and publish a further status report in September 2022, reviewing disclosures by companies in their public reporting for 2021.