Risks and opportunities
The Task Force on Climate-Related Financial Disclosures’ (TCFD) 2021 status report identified the disclosure of anticipated financial effects of climate-related risks and opportunities using the TCFD recommendations as an area with little disclosure.
In paragraph 14, the Exposure Draft proposes that an entity be required to disclose the effects of significant climate-related risks and opportunities on its financial position, financial performance, and cash flows for the reporting period, and the anticipated effects over the short, medium, and long term—including how climate-related risks and opportunities are included in the entity’s financial planning.
Note: This is the least reported category of the TCFD recommendations. The U.S. SEC refers to these as financial impact metrics and provides specifics on how to conduct the analysis.