In an environment with a proliferation of third-party frameworks for climate-related disclosures, global alignment of practices will help deliver consistent and comparable disclosures and foster convergence. The implementation of climate-related disclosures, using a framework based on the TCFD Recommendations, would be an important step forward on the path towards convergence with anticipated international reporting standards on climate. Global alignment of practices would help deliver consistent and comparable disclosures and foster convergence. The FSB welcomes the IFRS Foundation’s programme of work to develop a baseline global sustainability reporting standard under robust governance and public oversight, built from the TCFD framework and the work of an alliance of sustainability standard-setters, involving them and a wider range of stakeholders closely, including national and regional authorities.

The FSB surveyed its members in H1 2021 to explore national/regional practices of financial authorities on promoting climate related disclosures. The survey identified gaps and challenges in the implementation of requirements or guidance based on the TCFD Recommendations. These relate to:

  1. the consistency of climate-related disclosures (including the use of TCFD Recommendations as the basis for frameworks and for coordination across jurisdictions and within each jurisdiction); and

  2. the reliability of climate-related disclosures (including the use of regulatory or supervisory mechanisms to drive progress and third-party verification).

The report sets high-level guidance, in the form of recommendations, to support financial authorities in their development of frameworks, as they consider appropriate to their wider public policy objectives, regulatory and legal frameworks. The report recommends that:

  • Financial authorities use a framework based on the TCFD Recommendations across all sectors for climate-related financial disclosures, in line with jurisdictions’ regulatory and legal requirements.

  • Financial authorities promote sharing of experiences, provide mutual support across jurisdictions on implementation of climate-related disclosure frameworks and accelerate international efforts to help build industry-wide awareness, technical knowledge and capabilities.

  • Financial authorities strongly coordinate in order to provide clear and consistent expectations, guidance or requirements to firms across all sectors on climate-related disclosures.

  • as disclosure practices continue to evolve and improve over time, in the longer term, authorities can help to improve the reliability of climate-related disclosures if they were to require, as appropriate, some form of third-party verification or assurance on such disclosures made by firms.

Continued coordination among financial authorities at the jurisdiction level and global coordination across jurisdictions and with relevant organisations is paramount to support the call for an acceleration in progress.