The percent of companies disclosing TCFD-aligned information steadily increased each year since 2017 as did the amount of information disclosed
The Task Force on Climate-related Financial Disclosures
(TCFD), established by the Financial Stability Board (FSB), published
its 2022 Status Report today. This year marks five years since the Task
Force published its final recommendations in 2017, and the 2022 Status
Report assesses developments and progress during that time.
As part of its assessment, the Task Force reviewed publicly available
reports of over 1,400 companies from eight industries and five regions
to better understand current climate-related financial disclosure
practices and their evolution.
Notably, the average number of recommended disclosures addressed per
company has steadily increased each year for the past five years — from
1.4 in 2017 fiscal year reporting to 4.2 in 2021 fiscal year reporting.
In addition, while 80% of companies disclosed in line with at least one
of the TCFD-recommended disclosures for fiscal year 2021, only 43%
disclosed in line with at least five. These levels of disclosure fall
short of the TCFD’s 11 recommended disclosures.
On average across the 11 recommended disclosures, the percent of
companies disclosing TCFD-aligned information increased by 26 percentage
points between 2017 and 2021. In addition, over 60% of the companies
reviewed disclosed their climate-related risks or opportunities in 2021
fiscal year reports – up from 27% in 2017 fiscal year reports.
There has also been steady growth in climate-related financial
disclosures on an industry and regional basis over the past three years.
Of the eight industries reviewed, four had average disclosure levels
across the 11 recommended disclosures of more than 40% — energy
companies at 43%, materials and buildings companies at 42%, banks at
41%, and insurance companies at 41%. The largest increase between 2019
and 2021 reporting was for banks at 20 percentage points. The increase
for materials and buildings and insurance companies was 16 percentage
points and 10 percentage points for energy companies.
On a regional basis, European companies reviewed disclosed at 60% on
average across the 11 recommended disclosures for 2021 reporting,
growing 23 percentage points since 2019. In North America, the average
level of disclosure for companies reviewed was 29% for fiscal year 2021
reporting, growing 12 percentage points since 2019. Notably, over 60% of
North American companies disclosed climate-related risks or
opportunities and 45% disclosed their impacts. Over half of companies in
the Asia Pacific region disclosed climate-related metrics, although the
region averaged 36% reporting across all 11 recommended disclosures—an
increase of 11 percentage points since 2017. The average level of
disclosure by companies in Latin America and the Middle East and Africa
increased nine percentage points (each) since 2019, bringing the average
levels of disclosure to 28% and 25%, respectively.
Continuing growth in investor demand for companies to report
TCFD-aligned information and use of the TCFD recommendations by
governments, regulators, and standard setters in developing
climate-related disclosure requirements are likely helping to drive the
increase in TCFD-aligned reporting.
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