TCFD recommendations
Task Force on Climate-related Financial Disclosures · Financial Stability Board (work completed 2023); monitoring transferred to the IFRS Foundation
The TCFD created the four-pillar structure - governance, strategy, risk management, and metrics and targets - that almost all climate reporting now uses. The Financial Stability Board announced in July 2023 that its work was complete and the task force disbanded in October 2023. Its recommendations live on inside IFRS S1 and IFRS S2, so a company applying both meets them.
What this means in Singapore
Singapore's climate reporting regime was built on TCFD foundations and has now moved past them, which is exactly why local preparers need to understand the relationship.
Where TCFD sits today. SGX's earlier sustainability reporting expectations were TCFD-based, and the four pillars map directly onto IFRS S2. That is convenient: an SGX issuer that built a TCFD-aligned report has the right architecture and does not need to start again. But Practice Note 7.6 now requires issuers to apply IFRS S2 together with the climate-relevant provisions of IFRS S1, on a phased timetable - STI constituents as at 30 June 2025 from financial years commencing in 2025, non-STI issuers with market capitalisation of at least S$1 billion from FY2028, and all other issuers from FY2030, with Scope 1 and 2 emissions required of every listed issuer from FY2025. Reporting "in line with TCFD" is no longer sufficient for the tiers that have been caught.
The practical gap analysis. An issuer moving from a TCFD-style report to an IFRS S2 report typically finds these gaps:
- Emissions become mandatory and specified. Scope 1 and 2 from FY2025 for everyone, measured per the GHG Protocol Corporate Standard (2004), with Scope 2 reported location-based using a Singapore grid emission factor whose vintage must be disclosed.
- Cross-industry metrics appear. Internal carbon price, capital deployment, transition and physical risk exposure, opportunity alignment and climate-linked executive remuneration are now disclosure items, not optional colour.
- Industry-based metrics enter the picture through the IFRS S2 Industry-based Guidance - a "refer to and consider" obligation that ACRA itself has flagged as hard to operationalise.
- Resilience must be assessed with scenario analysis, with the approach, timing and reporting period disclosed - a harder test than a narrative paragraph about a two-degree world.
- Transition plan information sits under the Strategy pillar. The IFRS Foundation published non-mandatory guidance on 23 June 2025, built on the Transition Plan Taskforce materials it took over in 2024, covering both mitigation and adaptation and adding no new requirements. It is the closest thing to an answer to "what does good look like".
Where TCFD language still shows up. Financial institutions, funds and multinational parents may still ask Singapore subsidiaries and portfolio companies for TCFD-style disclosure, and some voluntary frameworks and questionnaires retain the vocabulary. The safe answer is to prepare to IFRS S2 and note that doing so meets the TCFD recommendations - a claim the IFRS Foundation supports - rather than maintaining two parallel reports.
Watch the monitoring. Because the IFRS Foundation now runs the annual progress report that used to be the TCFD status report, that publication is a useful external benchmark of how Singapore practice compares internationally, and it is worth reading alongside SGX RegCo's own reviews of issuer sustainability reports.
How the framework works
What the TCFD was
The Task Force on Climate-related Financial Disclosures was set up by the Financial Stability Board to work out how companies should tell investors, lenders and insurers about climate risk. Its answer was deliberately structural rather than prescriptive: rather than a long list of metrics, it proposed four pillars that any company in any sector could report against.
That structure turned out to be the durable part. It is the skeleton of IFRS S1 and IFRS S2, and by extension of SGX Practice Note 7.6, of many central bank expectations, and of most voluntary climate reports written in the last several years.
The four pillars
- Governance - the governance processes, controls and procedures used to monitor, manage and oversee climate-related risks and opportunities. In practice: who on the board owns this, how often they see it, and what management structures report up.
- Strategy - how climate-related risks and opportunities affect the business model and value chain, their effects on financial position, financial performance and cash flows, and how resilient the strategy is under different climate futures.
- Risk management - the processes used to identify, assess, prioritise and monitor climate-related risks, and how those processes are integrated into overall risk management rather than run alongside it.
- Metrics and targets - the metrics used to measure and manage performance, and progress against targets, including any targets set by law or regulation.
What happened to it
In July 2023 the Financial Stability Board announced that the TCFD's work was complete, describing the ISSB Standards as the culmination of that work. The task force disbanded in October 2023. From 2024 the IFRS Foundation took over monitoring the progress of companies' climate-related disclosures from the TCFD, and now publishes the annual progress report on corporate climate-related disclosures in place of the former TCFD status report.
The IFRS Foundation's own page states the position plainly: companies applying IFRS S1 and IFRS S2 will meet the TCFD recommendations, because the recommendations are fully incorporated into the ISSB Standards.
But the equivalence runs one way
This is the point most summaries get wrong. Applying IFRS S1 and S2 satisfies TCFD. The reverse is not true - IFRS S2 goes beyond the TCFD in several places, and the IFRS Foundation says so. Concretely:
- TCFD recommended disclosing greenhouse gas emissions. IFRS S2 requires absolute gross Scope 1, Scope 2 and Scope 3 in tCO2e.
- IFRS S2 requires Scope 2 to be disclosed on a location-based basis specifically.
- IFRS S2 requires a defined set of cross-industry metrics, including capital deployment, internal carbon prices and climate-linked executive remuneration.
- IFRS S2 requires companies to refer to and consider industry-based metrics.
- TCFD encouraged scenario analysis; IFRS S2 requires a climate resilience assessment using scenario analysis, with disclosure of how and when it was carried out.
So a company that has been reporting against TCFD for years has the right shape but not the full content. Treating an existing TCFD report as an IFRS S2 report will leave gaps in exactly the places regulators and assurance providers look first.
What to do with a legacy TCFD report
Keep the structure; rebuild the metrics. The governance and risk management narratives usually transfer with modest editing. The strategy section needs the financial-effects and resilience content sharpened. The metrics and targets section is where most of the work sits, because that is where IFRS S2 converts recommendations into requirements.
If you are choosing what to read, read IFRS S1 and IFRS S2 rather than the original TCFD recommendations. The TCFD is now best understood as history that explains why the standards are shaped the way they are, not as a live framework you can report against.
Standards in this family
5 documents.
Disclose the governance processes, controls and procedures used to monitor, manage and oversee climate-related risks and opportunities.
The governance pillar asks a simple question with uncomfortable follow-ups: who is actually accountable for climate in this organisation, and what evidence is there that they exercise that accountability?
In IFRS S1 and IFRS S2 this pillar survives essentially unchanged in intent. The disclosure covers the governance body or bodies responsible, the management roles involved, how responsibilities are reflected in terms of reference and job descriptions, how the body ensures the right skills and competencies are available, how often and through what channels it is informed, how it considers climate in overseeing strategy, major transactions and risk management, and how it oversees targets and any related remuneration.
Why it is the pillar assurance providers start with. Governance disclosures are cheap to write and expensive to substantiate. A statement that the board reviews climate risk quarterly implies board papers, minutes and a defined escalation route. If those do not exist, the disclosure is not supportable.
Singapore note. This pillar overlaps with what SGX Listing Rule 711B already expects by way of a board statement and a description of the governance structure for sustainability, so the same underlying evidence serves both. It also connects to the IFRS S2 cross-industry metric on whether and how climate is factored into executive remuneration, and the percentage of executive remuneration linked to climate - a metric that turns a governance claim into a number.
Disclose how climate-related risks and opportunities affect the business model, value chain, financial position, performance and cash flows - and how resilient the strategy is.
Strategy is the pillar where climate reporting stops being descriptive and starts being financial. It covers the risks and opportunities identified, the time horizons over which they could reasonably be expected to have effects, the current and anticipated effects on the business model and value chain, the effects on financial position, performance and cash flows for the reporting period and the anticipated effects over the short, medium and long term, and the resilience of the strategy.
Physical and transition risk. Physical risks are acute events and chronic shifts - flooding, heat, sea level, storms. Transition risks arise from the shift itself - policy and legal, technology, market and reputational change. Both must be considered; reports that address only one are incomplete.
Resilience. IFRS S2 paragraph 22 requires an assessment of climate resilience using climate-related scenario analysis, with an approach commensurate with the entity's circumstances, and requires disclosure of how and when the analysis was carried out and for which reporting period. This is materially firmer than the TCFD recommendation it descends from.
Transition plans are disclosed here, not in a separate pillar. The IFRS Foundation's June 2025 guidance on disclosing information about an entity's climate-related transition, including transition plans, builds on the Transition Plan Taskforce materials the Foundation took over in 2024, covers mitigation and adaptation, and adds no requirements to IFRS S2.
Singapore note. For a small, low-lying, trade-dependent, energy-importing economy, physical risk analysis that stops at the company's own sites misses most of the exposure. Value chain effects - ports, shipping routes, regional suppliers, upstream agriculture - are usually where the material numbers sit.
Disclose the processes used to identify, assess, prioritise and monitor climate-related risks, and how those processes are integrated into overall risk management.
The integration requirement is the whole point of this pillar. A climate risk register maintained by the sustainability team and never seen by the risk function is not risk management; it is a document.
What is disclosed: the processes and related policies used to identify and assess climate-related risks; the inputs and parameters used, including data sources and the scope of operations covered; whether and how the entity uses scenario analysis to inform identification; how it assesses the nature, likelihood and magnitude of effects; how it prioritises risks relative to other types of risk; how it monitors them; whether and how the processes have changed from the prior period; and the extent to which they are integrated into and inform the overall risk management process.
The opportunity side is easy to forget. The same disclosure is required for climate-related opportunities, which most reports treat far more thinly than risks.
Why it matters for the numbers. This pillar is where the boundary of the emissions inventory and the boundary of the risk assessment should meet. If the risk assessment covers the group but the inventory covers only wholly owned Singapore operations, one of the two is wrong - and IFRS S2 forces the question by requiring Scope 1 and 2 to be disaggregated between the consolidated accounting group and other investees.
Singapore note. For financial institutions this pillar sits alongside supervisory expectations on environmental risk management, so the same processes are typically described to more than one audience. Keeping one description that satisfies both is far less work than maintaining two.
Disclose the metrics used to measure and manage climate-related risks and opportunities, and performance against targets - including targets required by law or regulation.
This is the pillar where TCFD's recommendations became IFRS S2's requirements, and where a legacy TCFD report will usually be found lacking.
Under IFRS S2 paragraph 28 the disclosure covers the cross-industry metric categories, industry-based metrics, and climate-related targets set by the entity or required of it, plus the metrics management itself uses to measure progress.
The seven cross-industry categories: greenhouse gas emissions; assets or business activities vulnerable to transition risk; assets or business activities vulnerable to physical risk; assets or business activities aligned with climate-related opportunities; capital deployment towards climate-related risks and opportunities; internal carbon prices, including the price per tonne and how it is used in decision-making; and remuneration, including whether and how climate is factored into executive remuneration and the percentage so linked.
On targets, the disclosure covers the metric used to set the target, the objective, the part of the entity it applies to, the period it applies over, the base period, any milestones, and whether the target is absolute or intensity-based - plus, importantly, whether and how it was informed by the latest international agreement on climate change, and the extent to which it relies on carbon credits.
Singapore note. Two of these categories deserve local attention. Internal carbon pricing has an obvious anchor: Singapore's carbon tax rate schedule gives a defensible reference point for a shadow price, though a company should explain its own basis rather than simply adopting the tax rate. And any reliance on carbon credits should be described precisely, because a taxable facility surrendering eligible international carbon credits against part of its taxable emissions is doing something quite different from a company buying credits for a voluntary neutrality claim.
The Financial Stability Board announced in July 2023 that the TCFD's work was complete, the task force disbanded in October 2023, and from 2024 the IFRS Foundation took over monitoring companies' climate-related disclosures.
The sequence. July 2023: the Financial Stability Board announces the TCFD's work is complete, with the ISSB Standards described as the culmination of that work. October 2023: the task force disbands. From 2024: the IFRS Foundation assumes responsibility for monitoring the progress of companies' climate-related disclosures, and publishes the annual progress report on corporate climate-related disclosures in place of the former TCFD status report.
What this means for a preparer. There is no longer a body issuing or interpreting TCFD recommendations. Questions about how to apply them are answered by reference to IFRS S1 and IFRS S2. A commitment to "report in line with TCFD" is best restated as a commitment to apply the ISSB Standards, which the IFRS Foundation confirms will meet the TCFD recommendations.
The asymmetry, again. Applying IFRS S1 and S2 meets TCFD. Meeting TCFD does not mean meeting IFRS S1 and S2, because IFRS S2 goes beyond the recommendations in places - mandatory Scope 1, 2 and 3 emissions, location-based Scope 2, cross-industry and industry-based metrics, and a scenario-analysis-based resilience assessment.
Related transfer. The IFRS Foundation also took on the Transition Plan Taskforce materials in 2024, and used them as the basis for its June 2025 guidance on disclosing climate-related transition information. So both of the significant voluntary climate disclosure initiatives of the last decade now sit inside the same house as the standards themselves.