FRAMEWORK GUIDE
TCFD / ISSB: a Tier-2/3 supplier response guide
TCFD (the Task Force on Climate-related Financial Disclosures) recommended climate-related financial disclosure organized around four pillars: governance, strategy, risk management, and metrics and targets. The ISSB (International Sustainability Standards Board) carried this framework forward into IFRS S1 (general sustainability disclosure) and S2 (climate disclosure) as formal standards, and TCFD's monitoring role transferred to the ISSB from 2023 onward. Both frameworks require structured disclosure of how climate risks and opportunities affect financial performance.
Who asks for it — and why
OEMs and large financial institutions or investors request information organized around the TCFD's four pillars or aligned with ISSB standards for climate-related financial disclosure, and they may ask suppliers, as part of supply-chain risk assessment, for evidence of climate-risk practices such as scenario analysis or reduction targets. ESG self-assessments also use climate governance as a reference signal.
Key requirement areas
- Governance
Checks whether the board and management have an oversight structure in place for climate-related risk.
- Strategy and scenario analysis
Requires examining how climate risks and opportunities affect business strategy under a range of scenarios.
- Metrics and targets
Covers disclosure of quantitative metrics such as emissions and energy use, along with the status of reduction targets.
What Tier-2/3 suppliers should do
For Tier-2/3 suppliers, the practical points are: (1) even without sophisticated scenario analysis, having a governance structure where someone is responsible for tracking climate risks (raw-material prices, energy costs, regulatory shifts) is a reasonable starting point, (2) emissions data is frequently shared across other requests like CDP and GRI, so building it once has high reuse value, and (3) organizing relevant policy documents around the four pillars (governance, strategy, risk management, metrics and targets) prepares you for that question structure.
5 questions in our free self-assessment are grounded in this framework.
Example questions
- How mature is your company's greenhouse gas (GHG) emissions management?
- Please provide your company's most recent Scope 1 and Scope 2 GHG emissions and total energy consumption.
- How far has your company gone on Scope 3 (value chain) emissions?
- How is climate change governed within your company, and how are climate-related risks assessed?
- Can your company produce a carbon footprint for the parts it supplies, and on what basis?
FAQ
- TCFD was retired — do I still need to care?
- TCFD's oversight role moved to the ISSB, but its four-pillar structure and recommendations were effectively carried into IFRS S2. Customer requests still frequently use the phrase 'TCFD-style' disclosure.
- Does a small supplier need to do scenario analysis?
- Rigorous quantitative scenario analysis is mostly a large-enterprise expectation. For Tier-2/3, starting with a qualitative approach — recognizing key climate risks and assigning an owner — is often sufficient.
Public sources
Informational only — this does not replace an official ESG evaluation. Independent content; not affiliated with or endorsed by any framework organization.