Do you want to know more about Stora Enso?
The TCFD is a body of people and institutions that has made global recommendations on what information companies should disclose to help the financial sector, such as investors and lenders, to understand how they are managing climate-related risks and opportunities. The recommendations are primarily focused on how climate change impacts companies – their performance, financial condition, and long-term plans – but the same information should also help understand how companies’ activities are impacting the environment. The TCFD pays particular attention to information about climate governance, strategy, risk management, and metrics and targets
Eventually, having one set of reporting standards for all should make it easier for investors and lenders to compare industries and companies to each other. The challenge is, however, that some companies have more and better resources and expertise available than others, and the TCFD acknowledges that it could take a few years for companies to develop good practices. So far, about 900 companies, including Stora Enso, have committed to working on the recommendations and many are well on their way to implementing them.
Some companies have been reporting on their resilience to climate risk for years. Others haven’t and for them, the TCFD recommendations may seem intimidating. However, the climate challenge on which our survival depends is also intimidating so this is necessary work that must get done. The task force provides guidelines and other support for companies to implement the recommendations. At the WBCSD, we’re working with leading companies in various sectors through TCFD Preparer Forums to share their experiences and challenges with a wider audience. Stora Enso, for example, is a member of the Food, Agriculture and Forest Products TCFD Preparer Forum.
In addition, investors are increasingly interested in forward-looking information that supports the development of low carbon solutions, sustainable strategies, and green financing products. They want to support innovations that help combat global warming and to ensure companies are future-proofing their operations and supply chains. This should be a powerful incentive for engagement between companies and investors to develop and support climate solutions.
And it is entirely possible that the TCFD recommendations become regulatory in some areas. Starting quickly will give companies a head start and competitive advantage when and if that day arrives.
The TCFD isn’t looking for “TCFD reports” but rather, hoping for companies to integrate climate disclosure into their mainstream reporting, such as annual reports. The thinking behind this is that companies should have coherence between their high-level strategy and climate-related disclosure. The whole story needs to be backed up.
Stora Enso, for example, had an assessment done in 2019 on its current reporting and how it compares with the requirements of the TCFD recommendations (see text box below). Such “gap analyses” can help companies identify what they need to do and get started.
Traditional reporting on operational sources of environmental impact such as greenhouse gas emissions will still have an important role. But as technology develops, this data could be collected automatically in real time, freeing up time for decision-makers to focus on action in response to the information: how to match the demand for and availability of resources, how to define targets, how to determine indicators. New technology could also enable data quality checks to support better accuracy and verifiability.
Yes, I do. The TCFD is based on a similar task force set up in the wake of the financial crisis of 2008 to help markets spot certain risks in banks. It was a response to a crisis, much like the TCFD is a response to the climate crisis. Reporting in line with the TCFD recommendations will help society at large to judge whether companies are truly making decisions for the long-term survival of our planet, as defined in global initiatives such as the Paris Agreement and the UN’s Sustainable Development Goals. Decisions made today can have a big impact on future generations long after we’re gone.