What you need to know
about TCFD

Our viewpoint

You can listen to our podcasts online via the player below or search for 'Investment Uncut' and review, rate and subscribe on Apple Podcasts, Spotify, Pocket Casts or SoundCloud

Show hosts Dan Mikulskis and Mary Spencer bring LCP's Ian Gamon to talk through everything you need to know about complying with TCFD. 

We discuss:

  • There are lots of net zero commitments, but its not always clear what this means in practical terms.
  • Interim targets are important in meeting these commitments, but this stuff is hard.
  • Regulation helps set a minimum bar – pulling the stragglers along with the pioneers. 
  • Whilst this episode focuses more on regulatory requirements, we’ve spoken to Claire Jones about responsible investing and climate risk before.


  • TCFD – Task Force for Climate-related Financial Disclosures – provides a structure for companies to report on managing climate risks. 
  • Compulsory for listed companies by 2025, larger pension funds this and next year (brought in by Pension Schemes Act), but for smaller pension schemes perhaps from 2024. 
  • PCRIG – Pensions Climate Risk Industry Group – guidance on complying with TCFD. 
  • This is not something the market will just “sort out”, and not all managers will focus seriously on climate risks without encouragement from their investors.


  • Make sure you’re equipped to consider these issues effectively.
  • You can’t delegate responsibility, but instead be clear on what practical actions are delegated to your investment managers. 
  • Climate risk needs to be part of an annual business plan.
  • It is consistent with requirements of the UK Stewardship Code.
  • Annual TCFD reporting will need to be published online in conjunction with a pension scheme’s report & accounts, with members notified via the annual benefit statement.

Strategy and risk management 

  • Understand the climate risk exposure in your portfolio of assets.
  • Make changes where uncomfortable with these exposures – eg tilting away from carbon intensive companies or engaging with your manager to put pressure on companies to improve.
  • A key component to understanding risk exposures is scenario analysis: understand how your assets, liabilities and pension scheme sponsor may fair in different future scenarios
  • Scenario analysis is required at least every three years, starting with the analysis in the year regulations that first apply to a pension scheme. 
  • With this understanding, integrate climate risk into your overall risk management.

Metrics and targets 

  • Data issues shouldn’t stop you monitoring, and guidance helps with filling in the gaps, but data is also getting better all the time.
  • Metrics generally focussed on carbon footprint and carbon intensity:
    • Carbon footprint most widely used;
    • Carbon intensity – as a big asset owner, the absolute measure matters, largest investors can make a big difference;
    • Normalised measure: WACI – weighted average carbon intensity – this is helpful to spot concentrations of risk.
  • Most important thing is to have a measure and use it.
  • Schemes required to set at least three metrics, which are calculated annually: one absolute (eg total carbon emissions), one intensity-based (eg carbon footprint) and one additional climate related metric (eg proportion of assets invested in low carbon opportunities).
  • Schemes must set at least one target for one of the metrics (non-binding) – which is reviewed annually.

Ian’s Insights

  • One thing to take away - Climate change is real, trustees have a fiduciary and legal responsibility to take it seriously.
  • Most underappreciated thing about investing - you are entrusting capital to people, to make things happen in the world. As an investor you can use capital flows to make a positive contribution, as well as a financial one. 



How to access our podcasts

You can access all our podcasts across all major audio platforms via computer or devices.


Apple Podcasts

Pocket Casts


Each LCP investment uncut podcast is for information and marketing purposes only and does not constitute any form of investment or financial advice or a financial promotion (under the Financial Services and Markets Act 2000). All views expressed by the podcast hosts and guests are purely their own opinions and do not represent those of LCP, its clients or affiliates. Our podcast listeners should always seek independent financial or legal advice before making any financial or investment decisions. Please refer to the Legal Notices section on the LCP website for further information.​

Our investment thinking

Our investment thinking

Insight hub

The latest recommended reads from our investment experts. From in-depth guides to quick-to-read blogs, we explore a range of themes to help you keep up-to-date.

Enter the hub