TCFD — The Framework That Tells You If Climate Risk Will F* Up Your Business

May 25

Every year, brands roll out new sustainability goals. “We’re going carbon neutral!” “We’re going regenerative!” “We planted 4,000 trees on Instagram!”

Cute. But what happens when climate change starts hitting your supply chain, wrecking your margins, and flooding your core cotton regions? That’s where TCFD comes in.

It doesn’t care about your feel-good targets. TCFD wants to know:
What are the real climate risks to your business, and how are you planning for them?

What is TCFD?

TCFD stands for the Task Force on Climate-related Financial Disclosures. It’s a global framework that helps companies report on how climate change affects their financial position — not their brand story, not their carbon footprint, but their actual bottom line.

It’s not a certification. No scoring. No badges. Just a structure.
You use it to tell the market:

Here’s how climate change could hurt us
Here’s what we’re doing about it
Here’s who’s responsible internally

Basically, it turns climate change into a boardroom conversation.

Who created this thing and why?

TCFD was created in 2015 by the Financial Stability Board (FSB) — a global watchdog that monitors risks to the financial system.

It was chaired by Michael Bloomberg (yes, that Bloomberg), and the logic behind it was simple:

If climate change is going to mess with global supply chains, insurance systems, agriculture, real estate, and retail — then investors need a heads-up.

In short: climate risk = financial risk. And companies needed a standardized way to talk about that.

What does TCFD ask for?

There are four core disclosure categories — and they’re all designed to move the conversation from CSR to CFO.

Governance
Who in the company is responsible for managing climate-related risks? Is it the board? A CSO? Some intern?
Strategy
What are the actual climate-related risks and opportunities you’re facing?
Are you preparing for a 2°C world? A 4°C world? Do you even know what that means?
Risk Management
How are you identifying, assessing, and managing climate risks?
Metrics & Targets
What data are you tracking (emissions, energy use, water dependency)?
What goals have you set — and are they tied to real action?

This isn’t about emissions reporting — it’s about financial exposure.

Who’s using it — and who actually gets it?

A growing list of companies — over 4,000 globally — are now reporting in line with TCFD. In fashion, it’s mostly the majors:

Kering explicitly aligns with TCFD in its annual reporting
H&M references climate risks using TCFD language
LVMH has disclosed physical climate risks and transition scenarios

Governments are getting involved too. The UK, Japan, New Zealand, and Switzerland have made TCFD-style reporting mandatory for large public companies.

In other words: if you're big and global, you're already expected to know your TCFD game.

Is it enforced? Kind of.

TCFD itself doesn’t enforce anything — it’s not a certifying body or a regulator. But local governments and financial institutions are starting to build it into law.

For example:

In the UK, TCFD-aligned reporting is now required for public companies and asset managers
In the EU, its principles are embedded in the new CSRD/ESRS standards
The ISSB is using TCFD as a core input for what will likely become the global ESG baseline

So no, you don’t get penalized by TCFD for ignoring it.
But you will get side-eyed by investors, regulators, and ESG analysts — and that reputational risk is real.

Why does this matter for fashion?

Because fashion isn’t just carbon — it’s climate-vulnerable infrastructure.

You rely on:

Agricultural inputs (cotton, rubber, wool) that are climate-sensitive
Water-intensive processes in regions already experiencing scarcity
Global shipping networks increasingly disrupted by storms and heatwaves
Labor markets and factory clusters that may not survive rising sea levels or migration shifts

TCFD is the only framework asking:

“What happens when the world you depend on starts falling apart?”

And fashion brands? They need to be ready to answer that.

But what’s the catch?

The problem with TCFD is that it’s a high-level framework, not a strict template.

That means:

Brands can interpret it however they want
Disclosures can be vague, generic, or buried in annual reports
“Scenario analysis” often reads like climate fanfiction — not real strategic planning

It’s progress, but it still leaves a lot of room for soft language and performative compliance.

What’s next for TCFD?

TCFD is about to level up — big time.

It’s being fully absorbed into ISSB (the International Sustainability Standards Board), which is becoming the global ESG reporting foundation
It’s already embedded into mandatory regulations in multiple countries
It will likely become the de facto climate risk disclosure tool worldwide, especially in finance and investor filings

The language of “risk” is shifting. If your brand isn’t fluent in TCFD, you’re already behind.

Aman Gill