The Buy Side and TCFD Metrics: Requiring TCFD Disclosures from Investee Companies

The Buy Side and TCFD Metrics: Requiring TCFD Disclosures from Investee Companies

The Intergovernmental Panel on Climate Change (IPCC) represents the most concerted scientific collaboration on climate change that informs policy decisions. The panel’s reports have provided critical insights into the physical and socioeconomic implications of a warmer climate. The Sixth Assessment Report (AR6) by Working Group 1 (the subgroup responsible for investigating the physical science basis of climate change) revealed that, unless there is an acceleration of mitigation efforts, hopes of limiting warming to 1.5°C beyond preindustrial levels would be out of reach.

These scientific conclusions impact climate policy, which will eventually translate into pressures on the global financial system. Often, these actions first manifest as reporting and disclosure requirements. Evidence of this can be seen in the number of countries requiring the use of Task Force of Climate Related Financial Disclosure (TCFD) reporting guidelines, sustainability regulations in Europe, and many other new regulations.