Companies that adhere to the TCFD are required to communicate in a clear, comparable, and consistent way the information that investors and stakeholders need to correctly assess the risks and opportunities related to the climate strategy.
The Task Force is focused on reporting the financial impacts of climate change on society, rather than the impact of a society on climate change. The main and most important feature concerns the adaptability to any type of organization operating in any sector and jurisdiction, highlighting the potential financial implications of the risks and opportunities associated with climate change and encouraging the transition to a low-carbon economy.
Four thematic areas, which represent the fundamental elements of an organization.
The organization's governance around climate-related risks and opportunity
The actual and potential impacts of climate-related risks and opportunities on the organization\'s businesses, strategy and financial planning
The processes used by organization to identify, asses, and manage climate-related risks
The metrics and targets used to asses and manage relevant climate-related risks and opportunities
Core Elements of Recommended Climate-Related Financial Disclosure | Final TCFD Recommendations Report
The four thematic areas are divided into additional 11 Recommended Disclosures:
|GOVERNANCE||STRATEGY||RISK MANAGEMENT||METRICS & TARGETS|
|Describe CDA's oversight of climate-related risks and opportunities||Describe the risks and opportunities related to the climate that the company has identified in the short, medium and long term||Describe the company's organizational processes aimed at identifying and assessing the risks associated with the climate||Report on the metrics used by the company to assess climate-related risks and opportunities|
|Describe the role of management in assessing and managing climate-related risks and opportunities||Describe the impact of climate-related risks and opportunities on the company's business, strategy and financial planning||Describe the company's organizational processes aimed at managing climate-related risks||Report Scope 1, Scope 2, and, if appropriate, Scope 3 greenhouse gas emissions and related risks|
|Describe the resilience of the company's strategy taking into account different climate scenarios including that of 2 ° C or lower||Describe how the company's organizational processes aimed at managing climate-related risks are integrated into the company's overall risk||Describe the objectives adopted by the company at the end of managing the risks and opportunities related to the climate and evaluate the performance against these objectives|
The main objective of a TCFD report is to present the Climate Strategy of your company to its stakeholders, in particular to investors. The TCFD recommendations allow the company to measure the adequacy and consistency of its strategy and to communicate the relevant aspects related to climate change to the outside in a transparent and timely manner.
Companies are required to demonstrate that they are able to:
Tackling the risks associated with climate change by integrating them into the business model.
Dare evidenza di come il modello di business dell’impresa è sostenibile e profittevole anche nei diversi scenari climatici previsti
Dotarsi diun sistema di reporting che dia evidenza di come questi aspetti vengono quantificati e monitorati dal management
In order to align the strategy of a company with the recommendations of the TCFD, Carbonsink's approach involves the implementation of the following steps (after evaluating the industrial, strategic and climate change mitigation plans of the company and consequent identification of the risks and opportunities related to climate change):
Definition of the 4 central elements of the Report on climate aspects:
In-depth application of scenario analysis through concrete simulations, taking into account the relevant KPIs provided by the company, and in line with the TCFD Technical Supplement: The Use of Scenario analysis in Disclosure of Climate-Related Risks and Opportunities. In this phase it is possible to evaluate a defined number of international scenarios available in the literature and simulate the effects of these scenarios on the business model of the company in the medium / long term.
Support in the drafting of a report for stakeholders aimed at communicating the above results, using the document 'the 7Principles of Effective Disclosure' required by the TCFD framework;
The end result, complementing the risk and opportunity mapping, will allow the company to disclose the financial impacts related to climate change - identified by the Task Force as having a key role to better inform financial decisions, investors, lenders and insurance underwriters.