The Task Force on Climate-Related Financial Disclosures (TCFD) was established in 2015 after the G20 requested the Financial Stability Board (FSB)*to review the Financial Sector's approach to reflecting climate change-related issues in its financial disclosures. task force, which was established in 2015 to develop a framework for authoritative climate change financial disclosure. 

 *Financial Stability Board (FSB): An international organization under the G20, established in 2009 to strengthen its role in international financial    regulation and           supervision

The TCFD Recommendations are being used as a benchmark for domestic and international climate change disclosures, as well as the basis for mandatory climate disclosures being pursued by countries, and are key to the trend toward integrating financial and It is expected to play a key role in the trend toward integrating financial and non-financial disclosures. 

The International Accounting Standards Foundation (IFRS) established the International Sustainability Standards Board (ISSB) to establish international sustainability disclosure standards, of which climate-related disclosures are drafted based on the TCFD Recommendations. 

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Key Reporting Items

The report recommends disclosing a company's response to the 2°C goal agreed to in the Paris Agreement and categorizing the key elements of the disclosure into four areas (governance, business Strategy, risk management, Metrics and reduction targets) to describe the risks and opportunities of climate change.

Governance
Conduct a feasibility analysis for internal reduction projects that are sufficiently large to warrant reductions according to the methodology.

Strategy
Conduct feasibility analyses for internal reduction projects that are sufficiently scaled according to the methodology.

Risk Management
The process an organization uses to identify, assess, and manage climate change-related risks.

Metrics and targets
Metrics and reduction targets used to assess and manage applicable climate change-related risks and opportunities.

Disclosure requirements by major topic

Climate change-related risks, opportunities, and financial impacts analysis

Risks related to climate change are categorized into transition risk and physical risk. The transition to a low-carbon economy brings transition risks to organizations, which are risks that may arise from aspects such as policy, legislation, technology, markets, and reputation.

Physical risks are further divided into acute and chronic risks. 

Acute risks are those caused by weather events such as cyclones, hurricanes, and floods, while chronic risks are those caused by long-term changes such as sea level rise or persistent high temperatures. 

Alongside these risks are the opportunities that climate change presents to businesses in terms of resource efficiency, energy resources, products and services, markets, and resilience. 

The ultimate objective of the Task Force on Climate-related Financial Disclosures (TCFD) is to ensure that these pluses and the ultimate objective of TCFD is to quantify and financially integrate these positive and negative factors into a company's operations.