TFCD Reporting: The Top 3 Challenges That Companies Face

Until now, the United Kingdom is the only country that has expressed its intent to make TFCD compulsory by 2023. It is still voluntary until now, but companies are encouraged to start making their TFCD reporting. It is good news that more and more companies are open to the idea to come up with their TFCD reports. And why not, it is for their own good. When a company makes annual TFCD reports it creates a transparent medium for potential investors to look deeper into the company they want to invest in. While complying with the report, it also makes company think-tanks aware of climate risks that may affect their company in the future.

But while more companies are willing to participate in this endeavor, there are some factors that may keep them from doing so as soon as possible. Most companies are still finding ways to make the task easier to do. It may be best for a company to look for help somewhere. Rinali gave us the guidance we needed to comply with the TCFD framework. While companies may have to face these challenges, it’s good to note that there are organizations that are put up to help companies with this dilemma. And do you know that there are software that offer step-by-step guide to an easier TFCD reporting?

Here are some of the challenges that companies face when doing their TFCD reporting.

Lack of Leadership Support

The TFCD should not only be the management’s concern. It should be an undertaking of the whole company, including the board. If the board does not support the endeavor, TFCD may have a hard road ahead. Before anything else, there should be full support from the policy-making body of the company. The success of the integration of TFCD may depend on the policies that are formulated.

Intertwined Processes

It is truly difficult to make headways in implementing climate-related disclosures because of the present set up of management processes. It may need a total revamp of a company’s procedural policies which may be challenging to do. Until now, most companies sees climate disclosure as a corporate social responsibility only. It should not be. It should belong to the top priorities of top executives and policy-making members to integrate in the company’s processes.

Insufficient Climate Risk Knowledge

While companies may have created a team to tackle TFCD reporting, it may be difficult for them to make progress if they have limited knowledge on climate change and its risks. It may be more challenging when they are dealing with a management and board that are not fully supportive of the project because of insufficient understanding of the TFCD.

While companies may have to face these challenges, it’s good to note that there are organizations that are put up to help companies with this dilemma. And do you know that there software that offer step-by-step guide to an easier TFCD reporting?

Rinali gave us the guidance we needed to comply with the TCFD framework.