13 October 2022

TCFD Report Finds Steady Increase in Climate-Related Financial Disclosures Since 2017

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.

TCFD