Strategic Focus: First Mandatory UK TCFD Disclosures Reveal Focus On Climate Preparedness
05 Oct, 2023
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Executive Summary
From April 2023, over 1,300 of the UK’s largest businesses have been required to disclose information aligned with the Task Force on Climate-related Financial Disclosures (TCFD) in their annual reports. This Strategic Focus provides a thematic overview of these TCFD-aligned disclosures. The disclosures show that firms have focused on developing the necessary governance and risk management structures to manage climate change, but are reticent to disclose detailed, forward-looking information concerning business resilience. Executives should use this report to identify current disclosure trends, and to inform their own climate disclosure strategies.
Analysis of mandatory UK TCFD disclosures shows corporate gaps
All four areas of TCFD disclosures suffer from a lack of reporting norms
Governance disclosures are explicit on climate change roles, responsibilities and pay
Strategy disclosures reveal a focus on risk quantification, rather than business resiliency
Risk management disclosures show climate change integration at an enterprise level
Metrics and targets disclosures demonstrate challenges with climate risk targets
All four areas of TCFD disclosures suffer from a lack of reporting norms
Governance disclosures are explicit on climate change roles, responsibilities and pay
Strategy disclosures reveal a focus on risk quantification, rather than business resiliency
Risk management disclosures show climate change integration at an enterprise level
Metrics and targets disclosures demonstrate challenges with climate risk targets
Figure 1. UK firms faced with new TCFD-aligned disclosure requirements
Figure 2. Materiality allowances reveal considerable disclosure flexibility
Figure 3. Governance disclosures best practice examples
Figure 4. Strategy disclosures best practice examples
Figure 5. Risk management disclosures best practice examples
Figure 6. Metrics and targets disclosures best practice examples
Figure 2. Materiality allowances reveal considerable disclosure flexibility
Figure 3. Governance disclosures best practice examples
Figure 4. Strategy disclosures best practice examples
Figure 5. Risk management disclosures best practice examples
Figure 6. Metrics and targets disclosures best practice examples
Kingfisher, Task Force on Climate-related Financial Disclosures (TCFD), EY, Burberry, G20, Financial Reporting Council (FRC), Ocado Group, Flutter Entertainment, Experian, UK Government, Twinings, Compass Group, Auto Trader, Rentokil, Imperial Brands, 3i, National Grid, Primark, Admiral Group, Financial Conduct Authority (FCA), Shell, Science Based Targets initiative (SBTi), Associated British Foods (ABF), Tesco, AstraZeneca, Rightmove, BP, GSK
About the Authors
Connor Taylor
Senior Analyst
Connor is a Senior Analyst at Verdantix. He focuses on delivering research to help senior executives navigate decarbonization decision-making and build effective strategies to…
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Ryan Skinner
Research Director
Ryan is a Research Director at Verdantix, where he leads a team of analysts delivering research, data and advisory services that help clients navigate the fast-evolving landsc…
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