Integration of climate risks and opportunities in corporate reporting: An explorative study on the Task Force on Climate-related Financial Disclosures in the European financial sector

Sammanfattning: Motivated by the increased relevance of climate-related financial dependencies, this thesis examines the implementation of the Task Force on Climate-related Financial Disclosures (TCFD) in the European financial sector. It additionally explores the disclosure motivations, from the perspective of economics-based and socio-political theories. Through content analysis of company reports and computation of the Climate Compliance Index, we analyze climate-related disclosures of 49 financial firms, from 2016 to 2019. We further differentiate between hard and soft recommendations and examine internal and external characteristics driving TCFD disclosure. From these analyses, we find that despite a significant increase in climate-related disclosures after TCFD adoption, the level of reporting remains low, especially in areas where hard information is required. Overall, the extent of disclosure is positively associated with firm size, growth, existence of voluntary assurance, and a distinct TCFD report section. Moreover, we also present evidence of greater implementation and hard claims provision in the insurance industry, compared to banks. Notably, external pressures (listing status and country's characteristics) are not found to be significant determinants of reporting. While these results partially support the use of TCFD as a legitimacy tool, we also present limited evidence of the economics-based theories, especially when disclosure type is considered.