The Task Force on Climate-related Financial Disclosures and net zero plans
Published on 2nd Dec 2022
The Task Force on Climate-related Financial Disclosures (TCFD) was set up to improve and increase reporting of climate-related financial information and the recommendations of the TCFD have now become the globally accepted reporting framework for climate-related disclosures.
The TCFD is a voluntary framework, however, many countries have begun a programme of putting it on a mandatory footing for certain sectors of their economies. The UK has already legislated for this with listed companies in scope from last year and AIM companies and large private companies coming within scope for financial years beginning on or after 6 April 2022. This week the EU adopted the Corporate Sustainability Reporting Directive which will require businesses to report on a broad range of ESG matters. The Directive will come into effect in phases starting from 2024. In the US, by the end of the year, the SEC is expected to finalise its proposal to require TCFD aligned reporting for US listed companies, also coming into effect in phases from 2023.
Alongside TCFD and ESG disclosures, many businesses are adopting net-zero transition plans. The UK has announced that it will introduce mandatory publication of these plans for certain business, likely from 2023.
As well as understanding the scope of the alphabet soup of disclosure requirements that businesses are facing, we have been advising a broad range of international clients on the wider implications of making sustainability disclosures and publicising net zero commitments – such as greenwashing investigations by regulators and climate litigation risk.
Click the image below to find out more about TCFD, net zero plans and minimising your legal risks.