Well, kind of.
In October 2023, TCFD was disbanded after fulfilling its purpose of enhancing corporate climate reporting by creating a widely utilised climate reporting framework. The International Financial Reporting Standards (IFRS) Foundation has taken responsibility for monitoring corporate TCFD disclosures.
So, what does this mean for UK businesses?
UK businesses within the scope of TCFD reporting are still required to report.
IFRS has developed sustainability standards which fully incorporate the TCFD recommendations, known as IFRS S1 and S2. IFRS S1 is for sustainability-related financial disclosures and IFRS S2 is for climate-related disclosures. This means that organisations that comply with the requirements of IFRS S1 and S2 will also be meeting the requirements of TCFD.
Does this mean UK businesses will be required to comply with IFRS S1 & 2?
Presently, IFRS S1 and S2 remain voluntary disclosures as they have not been adopted into UK legislation. However, this is expected to change.
The UK government has expressed interest in adopting IFRS S1 & S2 into its UK Sustainability Disclosure Standards (UK SDS), currently being developed by the Department for Business and Trade. These standards are expected to be released in July 2024 and are likely to then be adopted into UK legislation.
When this happens, businesses will need to disclose more information than currently under TCFD. This is likely to include sustainability disclosures that go beyond climate change, such as for water, pollution, biodiversity, resource use and management, whilst also focusing on the social and governance of the business, including the internal and external workforce, and business conduct.
What businesses need to do
With the increasing regulatory landscape, businesses must focus on data and accelerate their sustainability journeys. Businesses will need to identify, collect and analyse sustainability-related data to ensure they are prepared for upcoming regulations. This includes understanding the environmental impact from their operations and their supply chain. It is also essential to formulate an actionable pathway to Net Zero.
cero.earth, our carbon accounting and management platform, provides a seamless solution to ensuring compliance. Capturing and analysing your data, giving you a comprehensive picture of your carbon emissions across scopes 1, 2 and 3, the ability to map carbon scenarios, input business defined targets, create action plans and track performance. The ‘Managed’ solution means all the data capture and reporting is done for you by our expert team, and with the ‘Strategic’ option so is all your compliance reporting – taking the problem away from you entirely.
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