TCFD-aligned disclosure guidance for public sector annual reports
Applying the Task Force on Climate-related Financial Disclosure (TCFD) recommendations in central government and, where appropriate, the wider public sector
Documents
Details
This application guidance is for new climate-related financial disclosuresdisclosures, whichincorporating incorporate the TCFD recommendations into entity-levelcentral government and public sector annual reports.
Effective Date
HM Treasury has set out a three-year phased implementation approach for central government. The Phase 1 application guidance applies to 2023-24 annual reports and accounts.accounts, Phase 2 to 2023-24, and Phase 3 requirementsto will be introduced in 2024-25 and 2025-26 respectively (on a comply or explain basis).
Other public sector bodies should follow the direction from their respective relevant authority.authority[1].
Scope
This application guidance applies to all departments (ministerial and non-ministerial), as well as some central government and wider public sector bodies that meet certain criteria, or where they have been directed to follow this guidance by their respective relevant authority.
authority or parent department. Other central government and public sector bodies may choose to voluntarily follow this guidance - in full or in part.
Phase 1
This guidance addresses the reporting requirements for the first year of disclosure. Phase 1 requirements are mandated for departments and larger central government bodies’ annual reports and accounts from 2023-24.
In-scope reporting entities must include the following TCFD-related information in their 2023-24 annual reports:
athedisclosures,disclosures, including:
(a) describe the board’s oversight of climate-related issues.
(b) describe management’s role in assessing and managing climate-related issues.
Phase
-
TCFD’s
2
AnMetrics Exposureand DraftTargets forrecommended Phase 2 has been published for public consultation (closes Monday 26 February 2024).
The(b) Exposuredisclose DraftScope sets1, outScope the2, disclosureand, requirementsif forappropriate, yearScope two3 onGreenhouse theGas Risk(GHG) Managementemissions, and Metrics and Targets pillars of the TCFDrelated framework.risks Phase-aligning 2with requirementsexisting willGHG beemissions mandatedreporting formethodologies departmentswhere and larger central government bodies’ annual reports and accounts from 2024-25.appropriate[2].
Phase 2
This application guidance[3] is additive, with Phase 2 expanding on the existing reporting requirements for Phase 1. The Phase 2 Exposure Draft requires in-scope reporting entities to include the following TCFD-related information in their 2024-25 annual reports (on a comply or explain basis):
thedisclosures:disclosures:
(a) describe the organisation’s processes for identifying and assessing climate-related risks.
(b) describe the organisation’s processes for managing climate-related risks.risks.
(c) describe how processes for identifying, assessing, and managing climate-related risks are integrated into the organisation’s overall risk management.management.
Where climate is a principal risk:
thedisclosures:disclosures:
(a) disclose the metrics used by the organisation to assess climate-related risks and opportunities in line with its strategy and risk management process.
(b)(c) disclosedescribe Scopethe 1,targets Scopeused 2,by and,the iforganisation appropriate,to Scopemanage 3climate-related Greenhouserisks Gasand (GHG)opportunities emissions, and performance against targets.
- plus a description of the
relatedriskrisks--aligningin line with existingGHGperformanceemissionsreporting requirements
Where climate is not designated a principal risk (or part of a principal risk), reporting methodologiesentities wheremust appropriate.1articulate their rationale.
Phase 3
(c)Exposure describedrafts and application guidance for Phase 3 will be published in due course. Please refer to the targetsFinancial usedReporting byAdvisory Board (FRAB) minutes for updates.
[1] Each relevant authority sets the organisationrequirements tofor manageentities climate-relatedin riskstheir jurisdiction, including HM Treasury for central government bodies, other national governments for their Arms-Length Bodies (ALBs) in the devolved administrations (Scotland, Wales and opportunitiesNorthern Ireland), the Department for Health and performanceSocial againstCare targets.(DHSC) for NHS bodies, and CIPFA-LASAAC for local government.
1[2] For central government, this aligns with existing requirements in the
Sustainability Reporting Guidance (SRG). No additional mandatory reporting on Scope 3 GHG emissions (in addition to business travel) are being introduced in this Exposureapplication Draft.guidance. FurtherCentral detailgovernment arebodies includedoutside inof the guidance.
Phasescope 3
Exposureof draftsthe Greening Government Commitments (GGCs), and applicationwider guidancepublic forsector Phasebodies 3may willimplement bethis publishedrequirement in duePhase course.2 Pleasein referline towith the
Financial Reportingapplication Advisoryguidance Board(without (FRAB)the minutesneed to explain non-compliance).
[3]The application guidance for updates.Phase 2 was published on 21 March 2024, following a public consultation on the exposure draft.
Last updated
-
Updates following the consultation on the Exposure Draft for Phase 2, and subsequent approval of the updated Application Guidance.
-
The TCFD-aligned disclosure exposure draft for Phase 2 has been issued, with relevant updates to information included and signposted on this page.
-
First published.
Update history
2024-07-25 14:06
Page updated following the launch of the Phase 3 Exposure Draft consultation
2024-03-21 16:45
Updates following the consultation on the Exposure Draft for Phase 2, and subsequent approval of the updated Application Guidance.
2023-12-19 11:36
The TCFD-aligned disclosure exposure draft for Phase 2 has been issued, with relevant updates to information included and signposted on this page.
2023-07-20 15:39
First published.