Last updated: May 19, 2026.
The Task Force on Climate-related Financial Disclosures, usually called TCFD, changed how companies talk about climate risk. Its four-pillar structure - governance, strategy, risk management, and metrics and targets - is still one of the clearest ways to organize climate-related financial disclosure.
But the reporting landscape has moved on. The TCFD completed its work and disbanded after its final 2023 status report. The Financial Stability Board asked the IFRS Foundation to take over monitoring climate-related disclosure progress, and the IFRS Foundation states that IFRS S1 and IFRS S2 fully incorporate the TCFD recommendations.
That means companies should not treat TCFD as a dead framework or as a standalone end point. It is better understood as the foundation behind many current climate disclosure rules and standards. This guide explains what TCFD recommended, why it still matters, and how companies can use it as a practical bridge toward ISSB/IFRS S2, CSRD/ESRS climate reporting, investor requests, and customer climate questionnaires.
Keslio can help companies turn climate disclosure requirements into a workplan through reporting and communications, GHG emissions calculations, and sustainability strategy.
Short answer: The TCFD recommendations are a climate disclosure framework built around four pillars: governance, strategy, risk management, and metrics and targets. TCFD itself has disbanded, but its recommendations remain highly relevant because they are incorporated into ISSB standards and have influenced many climate disclosure rules. A company using TCFD today should treat it as a practical structure for climate governance, risk assessment, scenario analysis, emissions data, targets, and transition planning.
What TCFD was created to solve
TCFD was created by the Financial Stability Board to improve climate-related financial disclosure. Investors, lenders, insurers, and regulators needed clearer information on how climate change could affect companies, assets, strategies, costs, revenue, capital allocation, and resilience.
Before TCFD, many climate disclosures were either missing, scattered, or written as broad sustainability statements. TCFD pushed companies to explain climate risk in a more decision-useful way: who oversees it, how it affects strategy, how it is managed, and what metrics show progress.
This investor and risk-management orientation is still important. Even when a company reports under another framework, the same questions keep appearing: does the board understand climate risk, has management assessed financial exposure, are emissions calculated, are targets credible, and is the strategy resilient under different climate scenarios?
The four TCFD pillars
TCFD organized climate disclosure around four thematic areas. These remain the easiest way to structure a first climate disclosure gap analysis.
1. Governance
The governance pillar asks how the board and management oversee climate-related risks and opportunities. A useful disclosure explains which board committee or governance body reviews climate matters, how often they are discussed, what management roles are responsible, and how climate topics connect to strategy, risk, capital allocation, remuneration, or performance management.
Common evidence includes board papers, committee terms of reference, management responsibilities, risk committee minutes, sustainability governance charts, and executive accountability records.
2. Strategy
The strategy pillar asks how climate-related risks and opportunities affect the company's business, strategy, and financial planning over the short, medium, and long term. This includes transition risks, physical risks, market shifts, technology changes, regulation, reputation, customer requirements, operating costs, capital expenditure, and resilience.
TCFD also encouraged companies to use scenario analysis where appropriate. Scenario analysis does not need to be perfect in the first year, but it should help management test how different climate pathways could affect the business model.
3. Risk management
The risk management pillar asks how the company identifies, assesses, prioritizes, and manages climate-related risks. The key issue is integration: climate risk should not sit in a separate sustainability slide deck if it is financially relevant. It should connect to enterprise risk management, procurement, operations, insurance, finance, and strategic planning.
Companies can start by mapping physical and transition risks, assigning owners, scoring likelihood and magnitude, and linking high-priority risks to mitigation or adaptation actions.
4. Metrics and targets
The metrics and targets pillar asks what the company measures and what targets it has set. This usually includes greenhouse gas emissions, energy use, climate-related targets, progress against targets, capital allocation indicators, internal carbon prices where used, and other metrics tied to material climate risks and opportunities.
For most companies, the GHG inventory is the foundation. Scope 1 and Scope 2 emissions are usually the starting point, while Scope 3 becomes important where value-chain emissions are material or requested by customers, investors, or reporting standards.
The 11 TCFD recommended disclosures
Under the four pillars, TCFD set out 11 recommended disclosures. In practical terms, they ask companies to explain:
- Board oversight of climate-related risks and opportunities.
- Management's role in assessing and managing climate-related risks and opportunities.
- Climate-related risks and opportunities over the short, medium, and long term.
- The impact of those risks and opportunities on business, strategy, and financial planning.
- The resilience of strategy under different climate-related scenarios, where relevant.
- Processes for identifying and assessing climate-related risks.
- Processes for managing climate-related risks.
- How climate risk processes are integrated into overall risk management.
- Metrics used to assess climate-related risks and opportunities.
- Scope 1, Scope 2, and, where appropriate, Scope 3 greenhouse gas emissions and related risks.
- Targets used to manage climate-related risks and opportunities, and performance against those targets.
These disclosures are useful because they move climate reporting from general ambition to governance, process, data, and accountability.
How TCFD connects to ISSB and IFRS S2
TCFD is now closely linked to the ISSB standards. The IFRS Foundation says that companies applying IFRS S1 and IFRS S2 will meet the TCFD recommendations because the recommendations are fully incorporated into the ISSB Standards.
The practical implication is simple: if a company has already prepared TCFD-style disclosures, it has a strong starting point for ISSB readiness, but it still needs to check the detailed requirements of IFRS S1 and IFRS S2. IFRS S2 goes deeper on climate-related disclosures, including industry-based metrics, greenhouse gas emissions, transition plans, climate resilience, scenario analysis, and other climate-related information.
Jurisdictions may adopt or adapt ISSB standards differently, including transition reliefs or local modifications. Companies should check the rules that apply to their listing, jurisdiction, parent company, lenders, and customers.
How TCFD connects to CSRD and ESRS
For companies affected by the EU CSRD, TCFD can still be useful as a climate risk structure, but it does not replace ESRS reporting. ESRS uses double materiality and includes detailed disclosure requirements, including ESRS E1 Climate Change where climate is material.
TCFD's four pillars overlap with many governance, strategy, risk management, metrics, and target concepts in ESRS, but CSRD and ESRS also require a broader sustainability reporting process, value-chain consideration, datapoints, policies, actions, targets, and assurance readiness.
For more detail, see Keslio's guides to getting ready for CSRD reporting and the European Sustainability Reporting Standards.
How to use TCFD today
A practical TCFD-style project can be structured as a gap analysis and implementation plan.
1. Confirm the reporting destination
First, determine whether the company is responding to a voluntary TCFD request, ISSB or IFRS S2 readiness, CSRD and ESRS reporting, stock exchange guidance, lender requirements, investor due diligence, or a customer climate questionnaire.
The destination matters because TCFD provides a structure, but the final requirement may be more detailed.
2. Map governance and ownership
Identify who owns climate risk at board, management, and operational levels. Climate disclosure often touches finance, risk, legal, operations, procurement, HR, sustainability, investor relations, and communications. Without clear ownership, reporting quickly becomes a scramble.
3. Identify climate risks and opportunities
Map physical risks such as heat, flooding, storms, water stress, and supply disruption. Then map transition risks and opportunities such as regulation, customer requirements, energy costs, carbon pricing, technology shifts, procurement criteria, low-carbon products, and access to finance.
Prioritize the risks and opportunities by likelihood, magnitude, time horizon, affected business units, and financial relevance.
4. Build the emissions baseline
Climate disclosure needs emissions data. Start with Scope 1 and Scope 2, then identify which Scope 3 categories are relevant or requested. Companies should document activity data, emission factors, organizational boundaries, reporting period, exclusions, assumptions, and calculation method.
Keslio can support GHG emissions calculations where the company needs a defensible baseline before publishing climate-related disclosures.
5. Review climate targets and transition plans
If the company has targets, check whether they are specific, measurable, time-bound, and supported by actions. If the company does not yet have targets, avoid inventing a public target before the baseline and operational levers are understood.
A useful transition plan connects emissions sources, reduction actions, capital needs, supplier engagement, operational changes, governance, and progress metrics.
6. Draft the disclosure and evidence pack
The disclosure should be clear enough for external readers and traceable enough for review. Keep an evidence pack with board records, risk assessments, emissions calculations, scenario analysis assumptions, target methodology, data sources, and review notes.
This evidence discipline also reduces greenwashing risk because claims about resilience, emissions, progress, or targets can be tied back to documented support.
Common mistakes
- Treating TCFD as only a reporting exercise: TCFD is about climate-related financial risk, not just sustainability copy.
- Skipping governance: climate disclosures are weak when board and management roles are unclear.
- Publishing risks without financial relevance: readers need to understand how climate risks could affect strategy, costs, revenue, assets, operations, or capital.
- Using emissions estimates without methodology: emissions figures need boundaries, data sources, emission factors, and assumptions.
- Making targets before building the baseline: targets are more credible when they follow a clear emissions inventory and reduction plan.
- Ignoring Scope 3: value-chain emissions can be significant, especially for suppliers, service providers, retailers, logistics, manufacturing, and investment portfolios.
- Forgetting the move to ISSB: TCFD is still useful, but many companies now need to prepare for ISSB-aligned or jurisdiction-specific climate disclosure requirements.
What companies should prepare
Before preparing a TCFD-style disclosure or ISSB readiness review, gather:
- Board and management governance records for climate-related topics.
- Enterprise risk registers and climate risk assessments.
- Business strategy, financial planning, and capital allocation materials.
- Physical risk information for key sites and supply chains.
- Transition risk information, including regulation, customer requirements, energy costs, carbon pricing, and technology shifts.
- Scope 1 and Scope 2 emissions data, with Scope 3 screening where relevant.
- Energy, fuel, refrigerant, logistics, travel, procurement, and supplier data.
- Targets, transition plans, and performance tracking records.
- Prior sustainability reports, customer questionnaires, lender requests, or investor materials.
For broader climate planning, see Keslio's guide on how to build a strong climate strategy. For reporting structure beyond climate, see Keslio's practical guide to the GRI Standards.
How Keslio can help
Keslio helps companies turn climate disclosure expectations into practical reporting and data workplans. This can include:
- Reviewing TCFD, ISSB, ESRS, investor, or customer climate disclosure requirements.
- Running a TCFD or ISSB readiness gap assessment.
- Mapping governance, strategy, risk management, metrics, and target disclosures.
- Calculating Scope 1, Scope 2, and relevant Scope 3 emissions.
- Preparing data request checklists and evidence packs.
- Drafting climate disclosure sections for reports, questionnaires, and customer responses.
- Connecting climate disclosure to strategy, transition planning, and sustainability communications.
If you need to respond to a TCFD-style request or prepare for ISSB-aligned climate disclosure, Keslio's reporting and communications and GHG emissions calculations services can help you move from framework language to usable evidence.
