Strategic Focus: First Mandatory UK TCFD Disclosures Reveal Focus On Climate Preparedness
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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.
Table of contents
Analysis of mandatory UK TCFD disclosures shows corporate gapsAll 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
Table of figures
Figure 1. UK firms faced with new TCFD-aligned disclosure requirementsFigure 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
Organisations mentioned
3i, Admiral Group, Associated British Foods (ABF), AstraZeneca, Auto Trader, BP, Burberry, Compass Group, Experian, EY, Financial Conduct Authority (FCA), Financial Reporting Council (FRC), Flutter Entertainment, G20, GSK, Imperial Brands, Kingfisher, National Grid, Ocado Group, Primark, Rentokil, Rightmove, Science Based Targets initiative (SBTi), Shell, Task Force on Climate-related Financial Disclosures (TCFD), Tesco, Twinings, UK GovernmentAbout the authors
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