TCFD was established in 2015 to develop recommendations on the types of information companies should disclose about climate change risks. The information supports investors, lenders, and insurance underwriters in appropriately assessing and pricing those risks related to climate change.
One of the essential functions of financial markets is to price risk to support informed, efficient capital-allocation decisions. To carry out this function, financial markets need accurate and timely disclosure from companies. Without the right information, investors and others may incorrectly price or value assets, leading to a misallocation of capital.
The Financial Stability Board (FSB) created the TCFD to develop recommendations on the types of information that companies should disclose to support investors, lenders, and insurance underwriters in appropriately assessing and pricing a specific set of risks—risks related to climate change.
Read the full article here: https://www.fsb-tcfd.org/about/