September 1, 2017

Converging on Climate Risk: CDSB, the SASB, and the TCFD

After extensive deliberation and discussion, the Task Force on Climate-Related Financial Disclosures (TCFD) issued its final recommendations in June 2017, marking an important turning point for the resilience of global financial markets. As Task Force Chairman Michael R. Bloomberg has stated, “without effective disclosure of [climate-related] risks, the financial impacts of climate change may not be correctly priced—and as the costs eventually become clearer, the potential for rapid adjustments could have destabilizing effects on markets.”

Recognizing that climate-related financial reporting is an emerging and evolving endeavor with few well-established best practices, the Task Force’s recommendations provide a foundation to improve the ability of markets to properly assess and price climate-related risks and opportunities. Two organizations that participated in the dialogue, the Climate Disclosure Standards Board (CDSB) and the Sustainability Accounting Standards Board (SASB), are now in a unique position to build on that foundation, integrating the TCFD recommendations into their respective disclosure frameworks to advance the cause of addressing climate-related risk in the capital markets.

CDSB and the SASB—two of the most extensively referenced organizations throughout the TCFD recommendations, across both the core elements and supporting recommended disclosures—have, over time, each developed approaches for companies to use in identifying, assessing, and reporting their performance on climate-related issues. Working together, the SASB’s metrics and CDSB’s Framework for Reporting Environmental Information and Natural Capital and Climate Change Reporting Framework (together, the CDSB Framework) complement each other to ensure a company can easily integrate climate factors into a mainstream financial filing and fulfill the recommendations of the TCFD.

As this document will show, CDSB and the SASB’s approaches are already well-aligned with the recommendations of the Task Force. However, this paper also stands as a statement of agreement by CDSB and the SASB to further this harmonization, working to deliver a TCFD-ready framework to facilitate consistent, quality implementation.