AICPA & CIMA’s Sustainability frameworks and standards: Task Force on Climate-related Financial Disclosures Brief
If you are new to the TCFD recommendations, ‘Sustainability frameworks & standards: Task Force on Climate-related Financial Disclosures Brief’ presents a summary. The paper answers four questions:
What? Description of the TCFD recommendations.
How? Implementation of the TCFD recommendations.
Why? The purpose of the TCFD recommendations and organisational impact.
Who? Finance professionals with skills and competencies linked to the TCFD recommendations
CGMA Tool — Scenario planning: Providing insight for impact
‘Scenario planning: Providing insight for impact’ is a management tool designed to allow organizations to evaluate the efficacy of strategies, tactics, and plans under a range of possible future environments. Scenario planning can be a valuable addition to an organization’s risk management toolkit by addressing the potential impact of alternative scenarios on an organization’s risk profile.
The Intergovernmental Panel on Climate Change (IPCC)
The Intergovernmental Panel on Climate Change is the United Nations body for assessing the science related to climate change. Established in 1988, it has completed six assessment cycles that have delivered six Assessment Reports detailing the most comprehensive research on climate change. The Synthesis Report of the IPCC Sixth Assessment Report (AR6) was released in 2023.
The IPCC has made its climate scenarios publicly available, so they provide case studies of best practices for organisations starting their accounting for climate resilience and scenario analysis journeys. However, the TCFD notes that ‘publicly available scenarios are typically designed for research and policy purposes and may not immediately be “fit for purpose” for a company’s scenario analysis’.80
The TCFD knowledge hub and guidance on scenario analysis
A key resource of the Taskforce on Climate-related Financial Disclosure (TCFD) knowledge hub is the ‘Guidance on Scenario Analysis for Non-Financial Companies’ report, published in 2020. This report gives organisations practical guidance and processes in the art of using climate-related scenario analysis and should be a go-to resource for organisations starting their accounting for climate resilience journeys.
One section of the TCFD knowledge hub is devoted to ‘the use of scenario analysis in disclosure of climate-related risks and opportunities’.
The TNFD approach to scenario analysis
The Taskforce on Nature-related Financial Disclosure (TNFD) released a proposed approach to scenario analysis in November 2022. This was followed in March 2023 with the release of Additional Guidance on Scenario Analysis (Beta v0.4 Annex 4.10). These serve as an introduction to the topic until TNFD guidance on scenario analysis is released in September 2023, alongside version one of the framework for nature-related risk management and disclosure.