TCFD Alignment
Task Force on Climate-related Financial Disclosures
Established by the Financial Stability Board in 2017, the TCFD framework transformed climate reporting by connecting GHG emissions to financial risk. Its four-pillar structure — Governance, Strategy, Risk Management, and Metrics & Targets — is now embedded in IFRS S2, CSRD, SEC Climate Rules, and every major national mandatory disclosure regime. While the TCFD secretariat closed in 2023 (with its work transferred to the IFRS Foundation), the framework remains the global standard for climate-related financial disclosure.
Visit TCFD / FSBTCFD → IFRS S2: What Changed?
The IFRS Sustainability Disclosure Standards (IFRS S1 and S2), published by the ISSB in June 2023, are built directly on TCFD's four pillars. IFRS S2 is now mandatory in jurisdictions covering the majority of global capital markets. Key changes: IFRS S2 adds industry-specific metrics (SASB-based), requires cross-industry climate metrics, and mandates Scope 3 where material. Companies reporting under IFRS S2 are considered TCFD-aligned.
The Four Pillars
Governance
- Describe the board's oversight of climate-related risks and opportunities
- Describe management's role in assessing and managing climate-related risks and opportunities
Auditor note: Auditors look for evidence of board-level agenda items, minutes referencing climate, and named ESG/climate roles in the executive team.
Strategy
- Describe climate-related risks and opportunities over short, medium and long-term
- Describe impact of climate risks and opportunities on business, strategy and financial planning
- Describe resilience of the strategy under different climate scenarios (incl. 2°C or lower)
Auditor note: Scenario analysis must include at least one 1.5°C or 2°C-aligned physical and transition scenario. NGFS and IEA scenarios are commonly used.
Risk Management
- Describe organisation's process for identifying and assessing climate-related risks
- Describe process for managing climate-related risks
- Describe how these processes are integrated into overall risk management
Auditor note: Physical risks (acute: floods, storms; chronic: sea-level rise, heat stress) and transition risks (policy, technology, market, reputational) must both be addressed.
Metrics & Targets
- Disclose metrics used to assess climate-related risks and opportunities per strategy and risk management
- Disclose Scope 1, 2 and (if appropriate) Scope 3 GHG emissions and related risks
- Describe targets used to manage climate-related risks and performance against targets
Auditor note: GHG emissions must be reported per GHG Protocol. Science-Based Targets (SBTi) are increasingly expected. Absolute and intensity targets must both be considered.
Mandatory TCFD / IFRS S2 Requirements by Jurisdiction
| Regulation | Jurisdiction | Scope | Effective |
|---|---|---|---|
| IFRS S1 / S2 (ISSB) | Global (40+ jurisdictions) | All sustainability + climate risk | 2025 onwards |
| CSRD / ESRS E1 | European Union (50,000+ cos) | Full TCFD + Scope 3 + double materiality | 2024–2028 phased |
| UK Climate Disclosures | United Kingdom | TCFD-aligned, listed cos & large private | 2022 (listed), 2025 (large) |
| SEC Climate Rules | United States | TCFD-aligned, Scope 1 & 2 mandatory | 2026 phased |
| SGX CCR | Singapore | TCFD-aligned for all listed issuers | 2023 (large cap), 2025 (all) |
| JFSA Climate Rules | Japan | TCFD-aligned for prime-listed companies | 2023 |
| ASX CGC Principles | Australia | TCFD-aligned recommended (mandatory 2025) | 2025 |
News & Regulatory Updates
ISSB IFRS S2 replaces voluntary TCFD — mandatory for 40+ jurisdictions from 2025–2026
IFRS Foundation · 2024
UK FCA mandates TCFD-aligned disclosures for premium listed companies and large asset managers
FCA UK · 2023
Singapore MAS requires TCFD-aligned climate disclosures for SGX-listed companies from 2025
MAS Singapore · 2024
TCFD final report 2023: 4,000+ companies adopting framework globally — 40% increase year-on-year
TCFD · 2023
G7 commits to making TCFD-aligned disclosure mandatory across all major economies by 2025
G7 Summit · 2022
Build your TCFD / IFRS S2 Metrics & Targets data
CarbonTrace generates the Scope 1, 2 & 3 data required for the Metrics & Targets pillar.