1.
November 20 | Tweet @CDSBGlobal
TCFD disclosure under the EU
Non-Financial Reporting
Directive
Fiona Quinlan

2.
November 20 | Tweet @CDSBGlobal
TCFD and the EU NFRD
TCFD disclosure under the EU Non-Financial Reporting Directive
Where should it be disclosed?
.
What
should be
disclosed?
Annual Report
Flexibility to include information
in separate report under certain
circumstances.
How?
Guidelines
• Guidelines on Non-financial
Reporting (2017)
• Guidelines on Reporting
Climate-related Information
(2019)
Comply or Explain
• Business Model
• Policies
• Policy Outcomes
• Principal Risks
• Non-financial KPIs
Who?
Public Interest
Entities
employing >
500 people

3.
November 20 | Tweet @CDSBGlobal
TCFD and the EU NFRD
TCFD disclosure under the EU Non-Financial Reporting Directive
Where should it be disclosed?
.
What
should be
disclosed?
Annual Report
Flexibility to include information
in separate report under certain
circumstances.
How?
Non-Binding Guidelines
• Guidelines on Non-financial
Reporting (2017)
• Guidelines on Reporting
Climate-related Information
(2019)
Comply or Explain
• Business Model
• Policies
• Policy Outcomes
• Principal Risks
• Non-financial KPIs
The guidelines
integrated the TCFD
recommendations and
sent a clear signal that
alignment was
expected

4.
November 20 | Tweet @CDSBGlobal
CDSB published the Falling
Short? Report in May 2020
4
This highlighted the further improvements needed in EU
disclosures on climate
TCFD disclosure under the EU Non-Financial Reporting Directive
• 2019 reports of Europe’s 50 largest
companies
• Key areas of weakness were closely
linked to core aspects of TCFD
recommended disclosures
• Comparability and coherence of
disclosures were also key challenges
Full report available at cdsb.net/fallingshort

5.
November 20 | Tweet @CDSBGlobal
Our latest briefing highlights the state of TCFD
implementation in Europe
TCFD disclosure under the EU Non-Financial Reporting Directive 5
Governance
Metrics & TargetsStrategy
Risk Management
• 72% disclosed board and management
level accountabilities
• Climate-related accountabilities often
implied rather than explicit
• 54% disclosed physical & transition risks
• 6% clarify risk time horizons
• 14% disclose resilience using scenarios
• 72% integrate climate change into risk
management
• Disclosure is often not explicit, although
integration can be inferred
• All disclose carbon emissions, but only
54% include Scope 3, e.g. value chain
• Many do not clarify the key metrics, as
distinct from wider indicators

6.
November 20 | Tweet @CDSBGlobal
Companies can take three key actions to
improve TCFD disclosure under the Directive
TCFD disclosure under the EU Non-Financial Reporting Directive
Include climate-related information deemed to be financially material in the
mainstream report
Clarify the materiality of environmental and climate related issues to your
business
Align environmental and climate-related disclosures made under the NFRD
with the TCFD core elements
1
2
3

7.
November 20 | Tweet @CDSBGlobal
Policymakers must use the upcoming revision
of the NFRD to strength EU TCFD disclosure by:
TCFD disclosure under the EU Non-Financial Reporting Directive
Reviewing the principal risk requirements of the Directive to ensure emphasis
is placed on risks and impacts ‘to’ the business (not only ‘by’ the business)
Removing the exemption allowing the non-financial statement to be reported
outside the mainstream report
Incorporating ‘climate’ into the wording of the Directive
1
2
3
4 Embedding the TCFD recommendations into the Directive

8.
November 20 | Tweet @CDSBGlobal
CDSB’s review of 2020 disclosures
• Our latest review of reports released in 2020 will be
launched in December - look out for details of the
online launch event shortly
• Our analysis will provide the latest update on TCFD
disclosure in Europe
• Assesses the first year of disclosure since release of
the Directive’s Guidelines on Reporting Climate-
related Information (2019)
8TCFD disclosure under the EU Non-Financial Reporting Directive