CDP disclosure and the TCFD recommendations

In 2019, 2508 companies from around the world – worth over US$ 41 trillion in market capitalization – responded to CDP’s climate change information request, which was sent to them by CDP on behalf of their investors. The overviews below examine to what extent these companies are disclosing in line with the recommendations of the Task Force on Climate-related Financial Disclosure (TCFD).

Overall, we find that a large number of companies are already disclosing climate-related information through CDP in a way that is aligned with the TCFD recommendations:

• 35% of companies provide information on all TCFD recommended disclosures through CDP.
• A further 45% respond to the majority (9-10 out of 11) of the TCFD recommended disclosures.
• 69% (over 1700 companies) are thus disclosing information on at least 80% of the recommended disclosures.

These overviews complement a policy brief released in 2019, titled “Accelerating Corporate Climate Action: The Role of Policy”, which also includes a policy recommendation on TCFD-aligned disclosure.

CDP and the TCFD

CDP’s climate change questionnaire is aligned with the recommendations of the Task Force on Climate-related Financial Disclosure (TCFD) – a body established in 2015 by G20 Finance Ministers and Central Bank Governors within the Financial Stability Board (FSB), and its chair at the time, Mark Carney, then Governor of the Bank of England. This group is concerned with the financial stability ramifications of climate change resulting from the potential mispricing of assets and misallocation of capital.

The TCFD was created as a private sector led taskforce to develop recommendations on climate-related financial disclosures. These recommendations were made in 2017 and now the focus is on adoption of these recommendations by companies and investors. CDP provides the global platform for disclosing entities to collect and organize data and provide it in a structured form to the market. The data disclosed through the CDP platform provides the investment community with high quality, consistent, comparable, TCFD-aligned data at scale.

CDP’s 2019 climate change questionnaire contains over 25 TCFD-aligned questions, which form the basis of the analysis above. These questions are contained within the Governance, Risks & Opportunities, Strategy, Targets and Emissions modules.

Water security and deforestation are a step beyond the climate-focused remit of the TCFD. Nevertheless, since 2018, CDP's water security and deforestation questionnaires have been inspired by the TCFD recommendations and organized in a similar structure, covering topics such as Governance, Strategy, Metrics and Targets. This helps companies organize their environmental management according to similar principles of good practice and will prepare them for increasing environmental disclosure demands.