A Guide to the Task Force on Climate-related Financial Disclosures (TCFD) for the Aviation Sector

In an era where climate change poses unprecedented challenges to the global economy, understanding and managing climate-related risks has become imperative for businesses and investors alike. The Task Force on Climate-related Financial Disclosures (TCFD) was a pivotal initiative in shaping climate risk reporting practices. As of October 2023, the TCFD has completed its mandate and disbanded. The International Sustainability Standards Board (ISSB), under the IFRS Foundation, now assumes responsibility for monitoring and guiding climate-related financial disclosures, building directly upon the TCFD’s framework ¹.

This guide explores:

• What was TCFD
• How to report using TCFD-based standards
• When was TCFD applied?
• Is climate risk reporting mandatory?
• How does TCFD impact the aviation sector?
• How can companies prepare for ISSB-aligned reporting?
• Conclusion
• FAQs

Embracing these climate disclosure standards offers aviation companies a strategic opportunity to strengthen sustainability commitments, enhance transparency, and build investor trust.

What was the TCFD?

The Task Force on Climate-related Financial Disclosures (TCFD) was established by the Financial Stability Board (FSB) in 2015 in response to growing recognition of climate change as a systemic financial risk.

Its voluntary disclosure recommendations provided a standardised framework for businesses and financial institutions to report climate-related financial risks and opportunities. These were structured around four pillars: governance, strategy, risk management, and metrics and targets.

Following its disbandment, the TCFD’s core framework was embedded into the ISSB’s IFRS S1 and IFRS S2 sustainability reporting standards, which now form the global baseline for climate-related disclosures ².

How to Report Using TCFD-Based Standards

Although the TCFD no longer exists, its structure lives on in the IFRS S2 standard. Disclosures should be published alongside mainstream financial filings within four months of financial year-end, covering the following four pillars:

1. Governance
2. Strategy
3. Risk Management
4. Metrics & Targets

When will TCFD be applied?

The TCFD framework was active from 2017 until its disbandment in 2023. During that period, it served as the global benchmark for voluntary climate-related financial disclosures. Its influence has since been codified in the ISSB’s IFRS S2 standard, which now forms the backbone of mandatory climate reporting in many jurisdictions ^1,2.

Is Climate Risk Reporting Mandatory?

Climate risk disclosure requirements vary by jurisdiction, but there is a clear global trend toward standardising these under the ISSB’s IFRS S2 framework, which builds on the original TCFD recommendations.

United Kingdom: The UK government plans to endorse the ISSB’s IFRS S1 and S2 standards as part of the UK Sustainability Disclosure Standards (UK SRS). A public consultation is expected in 2025, with mandatory reporting for listed companies anticipated to begin in 2026 ³.

New Zealand: Since 2023, New Zealand has implemented its own climate-related disclosure standards (NZ CS 1–3), based on TCFD. While not fully aligned with IFRS S2, future integration with ISSB standards is under consideration ⁴.

Canada: The Canadian Sustainability Standards Board (CSSB) is working to adopt the ISSB’s IFRS S1 and S2 standards. Although not yet mandatory, the move aims to align climate reporting across Canada with international norms ⁵.

Switzerland: The Swiss Federal Council has initiated a consultation to revise its Ordinance on Climate Disclosures to explicitly reference IFRS S2. This would further harmonise Swiss reporting standards with global best practices ⁶.

These developments mark a significant shift from TCFD-aligned frameworks to the adoption of IFRS S2 as the global baseline for climate-related financial disclosures.

How does TCFD impact the aviation sector?

Climate disclosure requirements are especially pertinent for the aviation industry due to its significant emissions footprint and operational exposure to climate risks. Aligning with ISSB’s climate standards allows aviation companies to:

• Identify and mitigate climate-related risks
• Access sustainable finance
• Meet investor and regulatory expectations

Failure to adapt could result in limited capital access, reputational damage, and regulatory penalties.

How can companies prepare for ISSB-aligned reporting?

To ensure readiness for climate-related disclosures under IFRS S2, aviation companies should:

• Conduct a gap analysis against ISSB standards
• Engage key stakeholders on expectations and priorities
• Perform climate risk assessments across operations and supply chains
• Use scenario analysis to assess resilience
• Provide training for leadership and governance
• Establish internal controls and oversight for reporting
• Develop a clear roadmap for phased implementation

Conclusion:

The TCFD played a foundational role in advancing climate-related financial disclosures globally. While it has now been disbanded, its legacy continues through the ISSB’s IFRS S2 standard.

For the aviation sector, early adoption of these globally recognised standards enhances credibility, competitiveness, and sustainability resilience. Companies must now shift focus from TCFD to full compliance with IFRS S1 and S2 to align with regulatory expectations and investor demands.

While TCFD adoption is currently voluntary in various jurisdictions, the growing global momentum towards mandatory reporting indicates that aviation businesses will likely need to embrace TCFD’s guidelines in the near future. The International Sustainability Standards Board (ISSB), which will take over the monitoring of TCFD in 2024, has incorporated the TCFD’s recommendations into its International Financial Reporting Standards (IFRS S1 and IFRS S2). This ensures that sustainability-related disclosures align with global standards, enhance reporting quality, improve decision-making, and establish a global baseline for disclosures.

Early preparation for TCFD reporting is crucial, involving comprehensive climate risk assessments, stakeholder engagement, and robust governance structures to ensure a sustainable and competitive future. This proactive approach will help ensure a sustainable and competitive future.

References

1. Financial Stability Board. (2023). TCFD to conclude its work and transfer monitoring to ISSB. Retrieved from https://www.fsb-tcfd.org
2. IFRS Foundation. (2023). ISSB issues inaugural global sustainability disclosure standards, IFRS S1 and IFRS S2. Retrieved from https://www.ifrs.org/news-and-events/news/2023/06/issb-issues-ifrs-s1-and-ifrs-s2
3. UK Government. (2024). UK Sustainability Disclosure Standards (UK SRS): Consultation and endorsement process. Retrieved from https://www.gov.uk/guidance/uk-sustainability-reporting-standards
4. External Reporting Board (XRB). (2023). Aotearoa New Zealand Climate Standards (NZ CS 1–3). Retrieved from https://www.xrb.govt.nz
5. ISS Corporate. (2024). Canada pushes forward with sustainability disclosure standards. Retrieved from https://www.iss-corporate.com/library/canada-pushes-forward-with-sustainability-disclosure-standards
6. Norges Bank Investment Management. (2025). Consultation on amending climate disclosure regulations in Switzerland. Retrieved from https://www.nbim.no