The introduction by HM Treasury of the Task Force on Climate-related Financial Disclosures (TCFD) in 2023/24 for central government departments marked the start of the journey for the government’s climate risk reporting. From 31 March 2026, reporting against all four pillars of the TCFD framework becomes mandatory, with the strategy pillar being added to governance, risk management and metrics and targets.
During the webinar TCFD preparedness, Henning Diederichs, Senior Technical Manager in ICAEW’s public sector team is joined by Max Greenwood, Senior Financial Advisor at HM Treasury, to discuss the implementation of TCFD for central government.
Greenwood explains that: “Initially, the focus was on high-level governance statements intended to raise awareness and secure leadership buy-in. This foundational approach was especially important for departments and larger arm’s length bodies, where mandatory adoption was required. However, the more complex quantitative reporting standards are only necessary if climate is assessed as a principal risk.”
He stresses that “the TCFD requirements are designed with proportionality and flexibility in mind but adds that honesty in reporting – especially regarding the level of compliance – is critical for building trust and credibility.”
All central government departments are in scope. Their arm’s length bodies are also in scope if:
- they have more that 500 employees; or
- the total income exceeds 500 million; or
- they have been instructed by their sponsoring department to follow this guidance.
In-scope reporting entities shall apply a ‘comply or explain’ basis for disclosure, complying with each of the required TCFD’s recommended disclosures, or explaining non-compliance.
“The current challenge is to transition from a compliance-based reporting regime to disclosures that genuinely inform parliament, stakeholders and the public - such insights enable better decision-making and strengthen resilience planning” according to Greenwood.
There is a plethora of support for the preparer community that Greenwood lists, including:
- the Climate Change Risk Assessment tool;
- the National Adaption Programmes, and
- HM Treasury's own best practice guidance.
Other subject matter experts, such as the Government Actuary Department, also provide specialist guidance and support scenario analysis development.
Greenwood’s parting message is to “build upon existing risk management strategies rather than reinvent the wheel. Ultimately, TCFD disclosures should be seen not merely as a compliance exercise, but as a strategic tool to enhance organisational resilience.”
For further climate-related guidance, reports and insights, see ICAEW’s climate resources.