ClientEarth response to TCFD consultation on metrics, targets and transition plans
ClientEarth response to TCFD Consultation on Proposed Guidance on Climate-related Metrics, Targets, and Transition Plans
The Task Force on Climate-related Financial Disclosures (“TCFD”) consulted on introducing additional guidance on metrics, targets, and transition plans, including updating the guidance in its 2017 Final Report which set out the TCFD’s recommendations. Notably, the proposed guidance would introduce recommendations for organisations to disclose transition plans for the first time.
ClientEarth welcomes the additional guidance being introduced by the TCFD on metrics and targets, and strongly supports the introduction of recommendations to disclose transition plans. However, in this document we propose a number of amendments to the TCFD’s proposals:
- Transition plans: Transition plans should be required to include emissions reduction targets which (at a minimum) match any national emissions reduction commitment in any jurisdiction in which the organisation operates.
- Interim targets: Short-term targets (e.g. for emissions reduction) should be between two to five years (not five to ten years, as proposed by the TCFD).
- Materiality: The disclosure of climate-related metrics and climate-related financial impacts should not be subject to a materiality assessment.
- Scope 3 emissions: The TCFD should remove the caveat that organisations need only disclose scope 3 emissions where they deem it “appropriate” to do so. All relevant categories of scope 3 emissions should be disclosed.
- Accounts: Organisations should reflect their transition plans and other climate-related disclosures in their financial accounts (including the assumptions on which the accounts are based).
- Offsets: The TCFD should set out minimum disclosure standards in relation to the use of carbon offsets.
- Portfolio alignment: Portfolio alignment (for banks, asset managers, asset owners and insurers) should be measured against 1.5°C warming (not “2°C or lower”, as proposed by the TCFD).
