The Financial Stability Board (FSB) has requested the International Financial Reporting Standards (IFRS) Foundation to assume the responsibility for monitoring companies’ climate-related disclosures, taking over from the Task Force on Climate-related Financial Disclosures (TCFD), as reported by ESG Today on July 10. The decision comes after the International Sustainability Standards Board (ISSB), a standard-setting body under the IFRS Foundation, recently issued the global sustainability disclosure standards known as IFRS S1 and IFRS S2. The FSB views these new IFRS standards as “the culmination of the work of the TCFD,” as they fully incorporate the TCFD’s recommendations. The FSB plans to transfer its monitoring role to the ISSB in 2024, following the TCFD’s delivery of its 2023 annual status report.

The TCFD, established by the FSB in 2015, aims to provide guidance to companies on disclosing climate-related risks in a consistent and comparable disclosures to better inform investors. Over the past five years, the TCFD has reviewed the publicly available reports of more than 1,400 companies across eight industries to evaluate current climate-related financial disclosure practices. In 2021, over 60% of the reviewed companies disclosed their climate-related risks or opportunities in their fiscal reports, a significant increase from 27% in 2017. These companies addressed an average of 4.2 TCFD-recommended disclosures in their 2021 reporting, compared to 1.4 in 2017. The substantial growth in climate-related disclosures using the TCFD framework has laid the foundation for the widespread adoption of new ISSB rules, which require more detailed information and additional specific disclosures.

S****ources:

https://www.esgtoday.com/issb-to-take-over-responsibilities-from-tcfd/

https://www.ifrs.org/news-and-events/news/2023/07/foundation-welcomes-tcfd-responsibilities-from-2024/

https://www.fsb-tcfd.org/press/tcfd-report-finds-steady-increase-in-climate-related-financial-disclosures-since-2017/

https://www.blacksun-global.com/en/our-thinking/insights/blogs/comparing-the-tcfd-and-upcoming-issb-standardsdo-you-know-the-.html