Guidance on Metrics, Targets, and Transition Plans

Over the past few years, several market and industry initiatives have focused on converging reporting standards that cover climate issues as well as aligning and improving comparability of climate-related metrics. These efforts include work to harmonize greenhouse gas (GHG) accounting methods to allow financial organizations to consistently measure GHG emissions financed by their loans and investments (referred to as financed emissions). In addition, many nations and organizations have committed to climate targets, such as those related to “net-zero” and the Paris Agreement. These commitments have led users of climate-related financial disclosures — investors, lenders, and insurance underwriters — to increasingly seek decision useful information on organizations’ plans and progress to move to a low-carbon economy, referred to as transition plans, including the use of associated climate-related metrics and targets to track such progress. Since 2017, the Task Force has sought to clarify issues raised by organizations in their implementation of the TCFD recommendations and provide additional supporting guidance and other information where appropriate. To address recent developments and feedback from users, preparers, and others, this document provides additional guidance for preparers regarding disclosures of climate-related metrics and targets and key information from transition plans. The Task Force also modified certain aspects of its 2017 Implementing the Recommendations of the Task Force on Climate-related Financial Disclosures to provide additional guidance on disclosing metrics, targets, and transition plan information in line with the TCFD recommendations.