Quick Comparison
| TCFD | ISSB (IFRS S1 & S2) | |
|---|---|---|
| Scope | Climate-related financial risks and opportunities | All sustainability-related risks (S1) and climate specifically (S2) |
| Applicability | Any organization; widely adopted by financial institutions | Entities preparing general purpose financial reports |
| Required/Voluntary | Voluntary recommendations (mandated in some jurisdictions) | Voluntary standards (being adopted into law by multiple jurisdictions) |
| Geography | Global | Global |
| Key Focus | Climate governance, strategy, risk management, metrics | Comprehensive sustainability and climate disclosure for capital markets |
| Assurance | Not specified | Expected as jurisdictions adopt; designed for assurance readiness |
What is the TCFD?
The Task Force on Climate-related Financial Disclosures was established by the Financial Stability Board in 2015 and published its landmark recommendations in June 2017. Chaired by Michael Bloomberg, the TCFD created a structured framework organized around four pillars: Governance, Strategy, Risk Management, and Metrics & Targets. The framework was designed to help companies disclose climate-related financial risks in a way that would be useful to investors, lenders, and insurance underwriters.
The TCFD was never a standard-setter in the traditional sense. It produced recommendations — eleven specific disclosures across the four pillars — and supplemental guidance for financial and non-financial sectors. Its influence was enormous. By 2023, over 4,000 organizations across 100 countries had expressed support for TCFD, and jurisdictions including the UK, Japan, New Zealand, Singapore, and Hong Kong had mandated or strongly encouraged TCFD-aligned reporting.
In October 2023, the TCFD was formally disbanded, with the FSB transferring monitoring responsibilities to the ISSB. The TCFD's work is complete — not because climate disclosure is solved, but because the ISSB has effectively absorbed and built upon the TCFD framework. The ISSB's IFRS S2 (Climate-related Disclosures) fully incorporates the TCFD's four-pillar structure and eleven recommended disclosures.
What is the ISSB?
The International Sustainability Standards Board was established in November 2021 at COP26 by the IFRS Foundation, the same organization that oversees the International Accounting Standards Board (IASB) and IFRS Accounting Standards used in over 140 countries. The ISSB issued its inaugural standards — IFRS S1 (General Requirements for Disclosure of Sustainability-related Financial Information) and IFRS S2 (Climate-related Disclosures) — in June 2023.
IFRS S1 establishes the overall architecture for sustainability disclosure, requiring entities to disclose information about all sustainability-related risks and opportunities that could reasonably be expected to affect cash flows, access to finance, or cost of capital. IFRS S2 provides specific requirements for climate-related disclosures, built directly on the TCFD framework with additional granularity from SASB Standards and the CDSB Framework.
The ISSB's standards are being adopted or considered by jurisdictions worldwide, including the UK, Canada, Japan, Australia, Singapore, Nigeria, and others. The approach is "building block" — jurisdictions can adopt ISSB as a baseline and layer on additional requirements (such as impact materiality) to suit local needs.
Key Differences
1. Legal Status and Authority
The TCFD produced voluntary recommendations backed by the moral authority of the FSB. The ISSB produces formal standards under the IFRS Foundation, designed for adoption into securities law and listing rules by national jurisdictions. When a country adopts IFRS S2, compliance becomes legally mandatory — a fundamentally different enforcement mechanism than voluntary adherence to TCFD recommendations.
2. Scope Beyond Climate
The TCFD addressed only climate. IFRS S1 creates a framework for disclosing information about any sustainability-related risk or opportunity that could affect enterprise value, including but not limited to climate. While IFRS S2 is the only topical standard issued so far, the ISSB is researching additional topics including biodiversity and human capital. The TCFD's climate-only scope is now one component of a broader disclosure ecosystem.
3. Specificity and Prescriptiveness
TCFD recommendations were deliberately principles-based, giving companies latitude in how they disclosed. IFRS S2 is substantially more prescriptive, specifying exact disclosure requirements, cross-industry metrics (including Scope 1, 2, and 3 emissions, climate-related transition and physical risks, and capital deployment toward climate), and industry-specific metrics derived from SASB Standards. Where TCFD asked companies to "describe," ISSB often requires companies to "disclose [specific metric]."
4. Industry-Specific Requirements
The TCFD provided supplemental guidance for the financial sector and four non-financial groups, but the guidance was high-level. IFRS S2 incorporates SASB's 68 industry-specific climate metrics, providing detailed, quantitative disclosure requirements tailored to each company's industry. This industry specificity was absent from the core TCFD recommendations.
5. Connectivity to Financial Statements
The ISSB standards explicitly require connectivity between sustainability disclosures and general purpose financial statements. IFRS S1 requires that sustainability disclosures be published at the same time as financial statements and that cross-references and reconciliations are provided. The TCFD recommended inclusion in financial filings but did not specify the degree of integration the ISSB requires.
6. Scenario Analysis
Both frameworks address climate scenario analysis. The TCFD recommended scenario analysis as part of Strategy disclosures. IFRS S2 requires it, with more specific guidance on what the analysis should include — climate-related risks and opportunities the entity anticipates, the time horizons considered, and the assumptions and parameters used. The transition from "recommended" to "required" is significant.
Which One Do You Need?
If you were reporting under TCFD, the transition to ISSB is the natural next step, and in most cases a regulatory inevitability. Your TCFD reporting provides a strong foundation — the four-pillar structure carries directly into IFRS S2. The gap analysis typically reveals needs around industry-specific metrics, Scope 3 granularity, and financial statement connectivity.
If you're starting fresh, go directly to ISSB. The TCFD has been officially wound down, and any new reporting program should be built on the current standard rather than its predecessor. Using ISSB from the start avoids a future migration and aligns with where regulators globally are heading.
If your jurisdiction has mandated TCFD (e.g., UK, Japan), monitor the transition timeline. Most TCFD-mandating jurisdictions are actively planning to migrate to ISSB-based requirements. The UK's Sustainability Disclosure Standards, for instance, are being developed based on IFRS S1 and S2.
Can You Use Both?
Since IFRS S2 fully incorporates the TCFD recommendations, an entity that complies with IFRS S2 is also TCFD-aligned. The ISSB has published a comparison document confirming this, and the FSB has accepted ISSB monitoring as the successor to TCFD monitoring. There is no need to report under both — ISSB compliance is TCFD compliance.
Organizations in the transition period may choose to reference both frameworks. A common approach is to include a TCFD index in the sustainability report that maps each of the eleven TCFD recommended disclosures to the corresponding IFRS S2 content. This helps stakeholders familiar with TCFD navigate the new ISSB-structured disclosures.
Council Fire's Perspective
The TCFD-to-ISSB transition is one of the cleaner framework evolutions we've seen in sustainability reporting. Unlike situations where organizations need to reconcile fundamentally different approaches, ISSB was designed as TCFD's successor, and the architectural continuity is genuine. Our clients who invested seriously in TCFD implementation — building governance structures, conducting scenario analyses, establishing emissions inventories — are finding the ISSB transition manageable rather than transformational.
Where we see organizations struggling is in the industry-specific metrics and Scope 3 granularity that ISSB demands beyond what TCFD required. Companies that treated TCFD as a narrative exercise rather than a data-driven disclosure program face a steeper climb. Our advice is to approach the transition as an opportunity to mature your climate data infrastructure, not just to check a regulatory box.
Frequently Asked Questions
Is TCFD still relevant now that it's been disbanded?
The TCFD's intellectual legacy is fully intact — its four-pillar framework is the skeleton of IFRS S2. However, as a standalone reporting framework, TCFD is being phased out. Organizations should transition their reporting to ISSB or the jurisdictional equivalent. References to "TCFD-aligned" reporting will increasingly be replaced by "ISSB-aligned."
How much additional work is the TCFD-to-ISSB transition?
For organizations with mature TCFD reporting, the incremental effort is moderate. The main additions are industry-specific metrics (from SASB), more granular Scope 3 disclosure, explicit financial statement connectivity, and certain new cross-industry metrics. For organizations with minimal TCFD implementation, the gap is larger and the ISSB requirements may feel substantially more demanding.
Will IFRS S2 replace national TCFD mandates?
That's the trajectory in most jurisdictions. The UK, Japan, Singapore, and others that mandated TCFD reporting are developing ISSB-based national standards. Transition timelines vary, but the direction is consistent: TCFD mandates will be replaced by ISSB-based requirements, typically with modifications to reflect local legal frameworks and market conditions.
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