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Sustainable Banking

TCFD - 2022 global progress report for banks

December 13, 2022 5-MINUTE READ

RESEARCH REPORT

In brief

  • Accenture’s analysis of banks’ climate reporting reveals a steady increase in those endorsing the TCFD framework and in the maturity of disclosures.
  • Since Q2 2020, there’s been a 131% increase in the number of banks endorsing TCFD, accounting for 60% of banking assets worldwide.
  • Despite this, challenges remain across all four of the TCFD pillars: governance, strategy, risk management and metrics & targets.
  • The strategy pillar remains the most challenging, particularly in the disclosure of how climate issues have been integrated into strategic planning.

Banks get to grips with complex disclosures

Banks have found themselves at the very center of the climate challenge. As enablers of capital, banks play a critical role to help mitigate the impact of climate change and build the infrastructure required for a future lower-carbon economy.

Banks are under mounting pressure from their stakeholders and regulators to report openly and credibly on their climate progress. Internationally, over the last few years, climate issues have gained more focus and policy momentum within the financial services industry and are increasingly aligned with TCFD, for example US SEC Climate Disclosure regulation and UK’s climate-related reporting regulations.

Disclosing in line with TCFD has many benefits, not only does it build standardization into reporting but provides a framework from which banks can build their climate response. What gets measured gets managed, therefore TCFD reports tend to reflect actual maturity in ESG strategy and execution, so are a good proxy for progress on the sustainability agenda.

Every year, Accenture analyzes the public disclosures of banks worldwide. We report on the number of organizations that have endorsed the TCFD framework as well as their maturity in reporting across the Task Force’s 11 recommendations. We identify the key challenges that banks have encountered and suggest steps they should consider and best practices they might emulate.

The encouraging conclusion of our 2022 report is that a growing number of banks are adopting the TCFD framework and the maturity of their disclosures is improving steadily.

The numbers tell an encouraging story

257

Banks that have endorsed the TCFD (compared to 111 in 2020)

60%

The share of global banking assets represented by these banks (compared to 42% in 2020)

131%

The increase in the number of endorsing banks since Q2 2020

66%

The average percentage of disclosures ranked Intermediate or Advanced

Detailed analysis provides help and inspiration

Our 2022 progress report provides a detailed analysis of banks’ disclosures, not only by the four key pillars—governance, strategy, risk management and metrics & targets—but also by size of organization and geographic region. It explores the factors that impede or support the maturity of banks’ reporting and offers practical recommendations for advancing along the maturity curve. Finally, it includes illuminating examples of banks that have innovated their way over the obstacles—best practices that offer both help and encouragement.

Sustainability measurement, analytics and performance

Leaders must now rethink what performance means in their organizations and devote the same resources and attention to ESG issues as they do to their financials. Accenture helps clients identify the risks and opportunities and stay on top of emerging disclosure requirements. We offer a comprehensive, data-led performance management capability that blends financial and non-financial goals and consolidates the metrics in one place—to be available to everyone and to lay a firm foundation for better-informed decision making. Please reach out if you're interested in learning more.

Banks have made significant progress in developing their climate disclosures. However, to support the global ambition to tackle climate change, further quantitative information and more significant commitment to transition plans should be evidenced.

Frequently asked questions

The Task Force on Climate-Related Financial Disclosures was created in 2015 by the Financial Stability Board (FSB) to develop consistent climate-related financial risk disclosures for use by companies, banks and investors in providing information to stakeholders. Increasing the amount of reliable information on financial institutions’ exposure to climate-related risks and opportunities will strengthen the stability of the financial system, contribute to greater understanding of climate risks and facilitate financing the transition to a more stable and sustainable economy.

The Task Force on Climate related Financial Disclosures recommendations have quickly become the global standard for reporting climate-related risk information to investors, shareholders and other stakeholders.

The report is a detailed assessment of 257 banks’ disclosures globally and reviews progress against the TCFD framework.

It highlights progress towards embedding the framework globally and illustrates specific examples of emerging industry best practice. It demonstrates the work that is still to be done to create a financial system that is resilient to the risks of climate change, recognizes its opportunities and facilitates a transition to a low-carbon economy.

The report classifies banks according to their progress against the four pillars of the TCFD framework: governance, strategy, risk management and metrics & targets, offers practical advice and reviews best practices that may be worth adopting.

The ambition in undertaking this research is to create further transparency across the industry, objectively establish the progress being made towards a low-carbon economy, highlight the key areas where more work is still to be done and share our view on how to approach it.

While it is widely acknowledged that banking sector participation is critical to support the transition to a low-carbon economy, information on the TCFD adoption progress is still limited. Our report seeks to provide a comprehensive assessment of where the sector stands.

The disclosures of all banks listed on the official TCFD supporters list were assessed. Results were then audited and the report drafted comparing progress with previous years.

Hannah Peter

Manager – Strategy & Consulting, Financial Services Sustainability

Hannah supports organizations to make meaningful climate disclosures and deliver on their sustainability strategy.

Robin Murray

Managing Director – Strategy & Consulting, Financial Services Sustainability and Risk

Robin works with clients to ensure that ESG management is at the heart of their enterprise risk & control frameworks.

Peter Beardshaw

Managing Director – Global Financial Services Sustainability Lead

Peter is focused on helping organizations embed sustainability and ESG into their value chain.

Mauricio Bermudez Neubauer

Managing Director – Strategy & Consulting, Carbon Strategy & Intelligence Lead

Mauricio supports organizations in the transition to the future economy—the intersection between the low carbon, circular, ethical and digital economies.

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