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ACCT5961 Group Case Study –
ACCT5961 Group Case Study –
Gap analysis - TCFD Recommendations
Background
The Task Force for Climate-related Financial Disclosures (TCFD) was formed by the UK’s
Financial Stability Board to improve and increase reporting on climate-related financial
information. It was set up in December of 2015 with the goal of developing a set of voluntary
climate-related financial risk disclosures to improve transparency. Financial markets often
require to price risk in order to better allocate capital in their investment decisions. The TCFD
launched its recommendations in 2017. These recommendations are adaptable and can be
used across various jurisdictions and sectors. TCFD has the view that “Through widespread
adoption, financial risks and opportunities related to climate change will become a natural part
of companies’ risk management and strategic planning processes. As this occurs, companies’
and investors’ understanding of the potential financial implications associated with
transitioning to a lower-carbon economy and climate-related physical risks will grow;
information will become more decision-useful; and risks and opportunities will be more
accurately priced, allowing for the more efficient allocation of capital.”1
There are numerous global reporting standards but the regulatory landscape on environmental
reporting is converging around the recommendations set out by the Task Force on Climate-
related Financial Disclosures (TCFD) in June 2017. This is evidenced by the adoption of these
recommendations as a prototype of the recently released International Sustainability
Standards Board (ISSB) standard IFRS S2 Climate-Related Financial Disclosures. This would
mean that disclosure of significant climate risk and opportunities will be an integral part of
annual reporting 2025 onwards. Hence, it is very relevant to examine how organisations follow
the TCFD recommendations.
TCFD points out the following benefits for disclosing climate-related information are:
1. Enables more effective evaluation of climate-related risks to companies and other
business partners. (Risk assessment)
2. Allows for better evaluation of risks and exposures over the short, medium and long-
term. Companies can therefore adjust their strategies in response to these exposures
allowing them to evaluate, price and manage those risks. (Strategic planning)
3. Allows market participants to make better-informed decisions on where and when to
allocate capital. (Capital allocation)
TCFD focusses on four thematic areas which form the basis of its recommendations.
Figure 4 of the Final TCFD Report (p.14) is duplicated below:
1 See https://www.fsb-tcfd.org/about/
Page 2
EY has prepared a Global TCFD report providing a background reading
(https://www.ey.com/en_au/sustainability/tcfd-annual-report).
EY has been preparing periodical Global Climate Risk Disclosure Barometer for many years
now but this is presented in aggregate (see https://www.ey.com/en_au/climate-change-
sustainability-services/risk-barometer-survey-2021). In the 2021 report they found that while
organizations are continuing to improve the quality and coverage of the disclosures, it is still
not mainstream with only 42% of the maximum quality across the 11 TCFD recommendations.
This group case study will provide students the opportunity to assess how well an organisation
is reporting using the TCFD Framework.
This case study will also develop teamwork skills. Teamwork is a vital skill in a professional or
business environment and a key graduate attribute that students should have. Working
effectively in a team does not happen by accident. It involves a deliberate effort by every
member of the group. Employers will look to hire employees who can communicate and
participate as part of a productive team, and who are able to use their initiative, organisational
and self‐management abilities to ensure the success of the team.
Required:
1. Refer to the Annual Report (sustainability report, TCFD Report or other relevant reports
that is part of the reporting suite) assigned to your group.
2. Perform a “gap analysis” on how well the company has applied each TCFD
recommendation (11 in total) in their disclosures.
3. As an external consultant prepare a report address to the Senior Executives of the
organisation, summarising your findings and recommendations on the gap analysis.
The report must be in Powerpoint form with no more than 12 pages. One page for
each TCFD recommendation. Each page should cover/discuss:
Page 3
a. A rating score on how well the company has adopted the TCFD recommendation.
(e.g., very poor, poor, minimal, very good and excellent).
b. Your observations such as:
a. Where in the report are the disclosures found (e.g., page numbers)
b. Summary of the content of the disclosure;
c. Justification for the rating score; and,
d. Recommendation(s) for improvement (in content or in format).
4. On page 12 of the report, discuss whether the information provided under TCFD
framework are decision useful for investors.
5. Submission details:
a. Submit group report with cover sheet (not included in page count) via link
provided on Moodle on or before 6pm 1 August 2023. Please designate one
group member to submit this.
b. Penalties: Marks will be deducted for late submissions at a rate of 10% per day
(inclusive of weekends). Plagiarism is a serious offence, and this course will
apply electronic plagiarism checks. Read Section 8 of the Course Outline for
more information.
6. Marking grid will be based on the following criteria:
Assessment criteria Marks allocated
Technical Component of written report (26 Marks)
• Demonstrates ability to address all requirements and
balanced in addressing the requirements (8 Marks)
• Clarity and quality of discussions and
recommendations (4 marks)
• Rating is supported (2 marks)
• Quality of recommendation (4 marks)
• Completeness - all 11 TCFD recommendations are
considered (4 marks)
• Concise - not repetitive (2 marks)
• Report is well structured,cohesive and appropriate
for the audience (i.e., Senior Executives) (2 Marks)
Content and organisation of report (4 Marks)
• Report is within with specified length (i.e., 12 pages
in PPT form)
• Report is a readable font size.
• Report is well written (careful with use of grammar
and no spelling errors).
• Report is appropriately referenced as required using
Harvard style
26 Marks
4 Marks
Total 30 Marks
(Based on group
performance
unless there are
some students
who did not
contribute)