Conducting risk analysis according to the UK Climate-related Financial Disclosures (CFD) for transparent and responsible financial reporting
A similar reporting framework, TCFD, is in place for standard-listed and premium-listed organisations falling within the Financial Conduct Authority (FCA) listing rules. Some organisations may be subject to both CFD and TCFD. Please refer to our TCFD page for more information.
CFD requires organisations to disclose against eight requirements (commonly referred to as (a) to (h)). This includes detailing their governance arrangements to assess and manage climate-related risks and opportunities and the methods employed to identify them; how they will integrate these new risks into the overall risk management processes and the time period for their assessment.
Entities must describe the actual and potential impacts of these risks and opportunities on their business models and strategies, including an analysis of their resilience under various climate-related scenarios; as well as the targets and key performance indicators (KPIs) set to manage climate-related risks and capitalise on opportunities. Additionally, it should include a summary of the organisation’s performance against these targets and the methodology behind the calculation.
We conduct your organisation’s qualitative or quantitative climate-scenario analysis, to understand the potential impact climate can have on your financial and operational performance. Our scenario analysis methodology allows us to determine the impact of the most significant risks and opportunities. We then use this as a focus to create mitigation strategies that will reduce the impact of climate-related risks.
