Why Enhesa supports the TCFD
For us, officially supporting the TCFD was not a step lightly taken. Here’s why we took it, and why we’re excited to start this important journey.
In the discussion of corporate responsibility today, everyone’s talking about carbon disclosures. If you’ve been involved in environmental social and governance (ESG) or sustainability reporting in the last few years (or will be soon), the chances are that you’ve heard of the Task Force on Climate-related Financial Disclosures (TCFD). At Enhesa, we’ve made the step to support the TFCD. For us, it’s a move aligned with the guidance we provide our global clients: pursuing verifiable, evidence-based proof of ESG efforts. Below we explain more about the TCFD: what it is and why we chose to support it.
Introducing the TCFD
The TCFD was set up by the Financial Stability Board (FSB) in 2015 as a way to ensure consistent disclosure of climate-related risk information. The FSB, in turn, is an international body that makes recommendations about the global financial system, including bringing together national and regional policy-makers to develop regulatory and supervisory policies. Its task force therefore has considerable clout in the world.
The TCFD has developed a framework to help organizations to make effective disclosures of climate-related risks and opportunities, using their existing reporting processes. These recommendations are designed to encourage clear reporting on the financial effects of climate change. They are set out across four pillars: governance, strategy, risk management, and metrics and targets.
We firmly believe that publicly demonstrating our support for the TCFD allows us to further empower our clients
Proactive compliance with TCFD recommendations
Complying with the TCFD’s recommendations is (mostly) voluntary at this stage. However, some countries are making them mandatory:
UK: For example, the UK has just brought into force new regulations that will require certain businesses to comply with the TCFD’s recommendations. These include companies and limited liability partnerships that are large or traded on the stock exchange, banking companies and insurance companies. As of the beginning of April, these companies now have to disclose certain information in their reports. It seems unlikely that other countries and jurisdictions will be far behind. Companies of these kinds around the world need to prepare for mandatory disclosure.
EU: This region has been channeling private investment towards green projects through its Corporate Sustainability Reporting Directive (CSRD). As well it would extend current reporting obligations beyond public-interest companies to all large companies in Europe (i.e., those meeting certain balance sheet conditions). This would require applicable businesses to publish sustainability-related information according to updated KPIs, templates, and methodologies.
US: The US Securities and Exchange Commission (SEC) has proposed new rules for climate-change reporting. According to the proposal, 11 April 2022 proposal, companies registered with the US SEC would be required to disclose climate-related information in their registration statements and periodic reports, including the information on the governance of climate-related risks, and certain climate-related financial statement metrics.
Compliance on a voluntary basis, however, sends a clear signal about being committed to understanding the impact of climate change and taking action to address it. This is why we are pleased and proud to be able to declare formally that we support the TCFD and its recommendations.
TCFD support in practice
What does support for the TCFD really mean?
First, it means that we are in good—and rapidly expanding—company. In October 2021, the TFCD’s fourth status report noted that 83 of the world’s 100 largest companies publicly supported the TCFD or reported in line with its recommendations. Disclosure had also increased more in 2019–2020 than in previous years, suggesting that support for the TCFD was accelerating. In the year to October 2021, more than 1,000 new organizations had begun to disclose information in line with the recommendations. The total number of organizations now using the TCFD’s framework has already reached more than 2,500. The TCFD itself has suggested that its framework is becoming the foundation for global standards for a low-carbon economy.
No matter if your organization is big, small, listed or non-listed, it can embrace the TCFD.
TCFD & Enhesa
We’re proud and delighted to publicly declare our support for the TCFD and its recommendations – and our commitment to work towards our own implementation of them. For us, it means demonstrating our belief that working with like-minded organizations allows us to take action to build a more resilient financial system through climate-related disclosure. And in turn to create a more sustainable working world together.
We also see our TCFD support as a commitment to encourage organizations within our stakeholder ecosystem in their efforts to do likewise. And the natural next step for our company, building on our core business of providing wrap-around EHS (Environment, Health & Safety) and ESG (Environment, Social & Governance) intelligence to our clients.
As a long-standing champion of compliance transparency, collaboration, and partnerships, we firmly believe that publicly demonstrating our support for the TCFD allows us to further empower our clients.
Next steps in walking the walk
We hope that being among the TCFD’s supporters will enable us to better support our clients and customers to achieve their own climate-related goals. This doesn’t mean that we plan to lecture our clients, peers, and suppliers: far from it. Instead, we hope to share our experience with our customers, to help them on their own journey towards climate-related disclosure. This article marks the first step in our journey.
Next up, another important one: Reviewing our internal policies and practices to identify our risks and opportunities when it comes to ESG initiatives. To make our support for the TCFD even more tangible. As we move forward, we want to continue this conversation with the community. Stay tuned for more updates about our progress. We’re excited about this as a move in our mission to help businesses create a more sustainable future, and we’re looking forward to what’s ahead.