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TCFD not Delivering Decision-Useful Climate Disclosures

While the number of companies producing climate-related disclosures is increasing, less than half are including decision-useful information, according to climate risk planning solution Manifest Climate. In its Disclosure Benchmark Review, Manifest Climate assessed the public filings of over 3,000 companies in 65 countries on their alignment to the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), also conducting a deeper dive on the decision usefulness of 100 firms’ reports. Two thirds of all firms assessed disclosed some TCFD-aligned information, but only 49% of the companies in the decision-utility review produced disclosures with “sufficient clarity, specificity, and comparability to be decision-useful” for investors and other stakeholders. More than four in ten of companies produced disclosures between 2018-2021 that addressed at least one of the TCFD’s strategy recommendations, but only 12% included information aligned with its governance recommendations. Additionally, none of companies assessed under Manifest Climate’s decision-utility model covered all elements required for disclosures to be decision-useful across the TCFD recommendations. Jeremy Greven, Manifest Climate’s Co-Founder and President, said: “While coverage continues to increase, similar advances are needed in the quality of these disclosures to provide sufficient transparency to the investment community. Actions speak louder than words but investors need both.” 

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