TCFD: what about the voluntary reporting framework?

The Financial Stability Board (FSB) set up the Task Force on Climate Related Financial Disclosures (TCFD) in 2015 to establish voluntary reporting to provide information on financial climate risks¹.

At COP28, the FSB and IFRS confirmed the dissolution of the voluntary TCFD. The FSB declared that the work of the TCFD was complete, and that the launch of the ISSB standards marked "the culmination of the work" of the working group. Indeed, IFRS S1 and IFRS S2 incorporate the TCFD's recommendations and provide a baseline for sustainability disclosures worldwide. The ISSB will take over responsibility for monitoring companies' progress in the area of disclosure, and in particular for overseeing the TCFD from 2024 onwards.

What is the impact on financial companies? 

If entities have already adopted the TCFD recommendations within the last six years, they can continue to use them. 

However, if entities adopt ISSB standards, adoption of the TCFD becomes unnecessary. In fact, companies and asset managers applying IFRS S1 and IFRS S2 will de facto comply with the TCFD recommendations, as they are fully integrated into the ISSB standards. 

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¹ This voluntary framework is not to be confused with the regulations adopted by the FCA, which require UK asset managers to publish TCFD reports as soon as their assets under management exceed £5 billion. For further information, please consult the decryption published by WeeFin: Task Force on Climate Related Financial Disclosures (TCFD) - Decrypting the regulatory framework for UK asset managers.