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TCFD consultation on forward-looking climate-related metrics


The TCFD (Task Force on Climate-related Financial Disclosures) has launched a consultation on the development and use of forward-looking climate-related metrics by the financial sector.

Such metrics are increasingly relied upon by asset owners and managers and others in the financial sector to drive capital allocation decisions, evaluate strategic resilience and progress towards climate-related targets and to engage with portfolio companies on these topics. The TCFD Guidance for Asset Owners (see extract below) recommends that asset owners should describe the metrics used to assess the climate-related risks and opportunities in each fund or investment strategy, and how these metrics have evolved over time. 


"Asset owners should describe metrics used to assess climate-related risks and opportunities in each fund or investment strategy. Where relevant, asset owners should also describe how these metrics have changed over time. Where appropriate, asset owners should provide metrics considered in investment decisions and monitoring."

Extract from Implementing the recommendations of the Taskforce on Climate-related Financial Disclosures p. 36.

The use of TCFD metrics is also increasingly likely to become mandated by law for many organisations: the UK Government's TCFD Taskforce recently outlined a roadmap towards the introduction of compulsory TCFD disclosures across key areas of UK law by 2025. For more on this, please see below.


The UK's Joint Government-Regulator TCFD Taskforce has published its Roadmap for the transition to mandatory fully-aligned TCFD disclosures across the entire UK business and financial community by 2025 alongside its Interim Report. The Roadmap represents the UK Taskforce's "flight path" towards the implementation of climate-related disclosures in the financial and non-financial sectors which are aligned with the TCFD's recommendations. The UK intends the TCFD-aligned disclosures to be mandatory, rather than "comply or explain". The timeline for implementation differs depending on sectors, but large occupational pension schemes (with more than £5bn of assets) (along with premium listed companies and banks, building societies and insurance companies) are expected to be subject to mandatory TCFD-aligned disclosures by 2021. 

For more detail on the Roadmap and Interim Report from the TCFD Taskforce, please refer to our recent briefing here.

Consultations on sector-specific proposals have already begun in some areas, notably for large UK occupational pension schemes and master trusts (see the Department for Work and Pensions consultation, Taking action on climate risk – improving governance and reporting by occupational pension schemes and our response to that consultation.)

This latest TCFD consultation focuses, in particular, on the emerging trend towards the use of Implied Temperature Rise (ITR) metrics. ITR represents an estimate of the global temperature rise associated with the emissions of a single entity or group of entities, expressed as a numeric degree rating.

Whilst the TCFD acknowledges in the consultation that no single climate-related metric can fully describe all relevant considerations, the TCFD is consulting on the extent to which ITR ratings could provide a useful standard for measuring climate-related risks and opportunities across a wide range of industries, companies and asset classes. The TCFD is also therefore keen to understand the potential limitations and challenges involved in using ITR metrics including:

  • limited availability of emissions data in some sectors
  • challenges in achieving a consistent methodology for assessing ITR, upon which its usefulness as a comparator across portfolios and asset classes will depend, and
  • what is needed to improve quality and availability of ITR methodologies.

The TCFD is also seeking input on other forward-looking metrics which may complement existing approaches to measuring climate risks and opportunities.

The TCFD consultation will close on 27 January 2021.


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