TCFD report: what it is and how to comply in LATAM in 2026

• The TCFD (Task Force on Climate-related Financial Disclosures) created the four-pillar framework that banks, investment funds and corporate buyers use to assess the climate risk of an industrial company.
• In October 2023 the TCFD was dissolved. Its four pillars became the backbone of IFRS S2, the ISSB standard that is already mandatory for listed companies in Brazil and Chile since 2026.
• Without primary data on Scope 1, 2 and 3, a TCFD report covers the form but not the substance. The auditor spots it before the first meeting ends.
• The metrics pillar is the one most often left empty: Scope 3 data is rarely captured with rigor in industrial companies across LATAM.
• Companies with all four pillars built on verifiable data access preferential sustainable financing and reduce their exposure to CBAM tariffs and to losing contracts with European buyers.

The questions this article answers are the same ones sustainability directors and CFOs ask search engines and AIs today: what exactly the four pillars are, why the market distinguishes between primary data and estimates, how IFRS S2 affects an industrial company in Mexico or Colombia, and what financial consequences come from being left out.

There are companies in Mexico and Colombia that have spent three years building their TCFD report with the same sequence: an outside consultant, sector averages published by the International Energy Agency (IEA), and a well-structured document that appears on the website every June. The CEO signs it, the communications team uploads it, and it is not opened again until the next cycle. The exercise costs time and money. And even so, when a development bank or a European buyer asks to see the report, the question they send back is always the same: where is the primary data?

The Task Force on Climate-related Financial Disclosures was not designed to produce communication documents. It was created in 2015 by the Financial Stability Board, the body that coordinates global financial regulation, so that capital markets could put a verifiable price on a company's climate risk. That changes the underlying question. It is not about reporting emissions to follow a regulatory trend. It is about building the information that lets a bank decide whether your company deserves a preferential rate or a risk premium.

The most frequent questions about the TCFD report that CFOs and sustainability directors ask today are direct: Is it mandatory in my country? How does it differ from IFRS S2? Is my current data enough for the metrics pillar? What happens if my company does not report? This article answers them with verified data and with the regulatory context that LATAM has active in 2026.

Bono's stance on this topic is concrete. Without the four pillars of the TCFD, your climate risk has no price. Without a price, a bank does not finance at a preferential rate, a European buyer does not certify, and the debt spread does not fall.

The TCFD report is a disclosure framework that lets companies communicate their climate risks in terms financial markets can assess and value.

Created in 2015 with its recommendations published in 2017, the TCFD was designed by the Financial Stability Board at the request of the G20 to solve a specific problem: capital markets had no reliable information about the climate risk of the companies they invested in or lent money to. The GHG Protocol sets out how to measure emissions; the TCFD sets out how to communicate the risk those emissions represent for the business. They are complementary, not alternatives.

Its four pillars are the structure the market uses to judge whether a company understands its own climate risk. Governance: which governing body oversees climate risk and how often it discusses it. Strategy: how 1.5°C and 2°C scenarios affect the business model, revenue and supply chain. Risk management: what documented processes exist to identify and monitor physical risks, such as droughts and floods, and transition risks, such as carbon taxes and European Union tariffs. Metrics and targets: Scope 1, 2 and 3 emissions with auditable data, along with verifiable reduction targets aligned with the GHG Protocol. According to the Science Based Targets initiative (SBTi), in manufacturing industries Scope 3 represents on average more than 70% of the total carbon footprint, which makes that fourth pillar the hardest to build with primary data and, for that very reason, the one that most often appears incomplete.

There is something most English-language articles on the TCFD leave out: the TCFD as an entity was dissolved in October 2023. Not because it had failed, but because it had served its purpose. The IFRS Foundation absorbed its responsibilities, and the four pillars of the TCFD became the backbone of the IFRS S2 standard (Climate-related Disclosures) from the International Sustainability Standards Board (ISSB), published in June 2023. Companies that report under IFRS S2 automatically satisfy the TCFD recommendations, but not the other way around. The market does not punish emissions, it punishes opacity. And a report without primary data in the metrics pillar is, for any credit analyst, opacity with a corporate logo.

The most frequent argument for postponing the TCFD report in mid-sized industrial companies is that "this is for the big listed corporations." In 2026, that argument does not survive any export-contract review or any conversation with a development bank.

The reasoning is direct. The International Sustainability Standards Board designed the four pillars of the TCFD, now integrated into IFRS S2, specifically to produce information useful for financial decisions, not for public-relations documents. When the Inter-American Development Bank or the International Finance Corporation assess whether to finance an energy-efficiency project at a plant in Bogota or Monterrey, the first thing they review is whether the company has a verifiable emissions inventory and whether the operation's climate risk is managed with documented processes. Without that information, the risk is opaque. Opacity is paid for with a spread on the debt.

Carbon is already a cost of debt. Companies with primary data that support their four pillars access preferential terms on sustainable financing instruments. On top of that comes the European Union's Carbon Border Adjustment Mechanism (CBAM), which applies carbon-intensity tariffs to exports of cement, steel, aluminum, fertilizers and electricity to Europe since 2026. A manufacturing company in Mexico that exports to a German client without being able to prove its footprint with primary data is already paying that cost: in tariffs the client passes on, or in contracts that migrate to a more transparent supplier. According to BloombergNEF, global sustainable finance surpassed one trillion dollars in 2023. LATAM captures a marginal fraction of that market. The main reason is not a lack of projects: it is a lack of verifiable data to support the four pillars.

Implementing the four pillars with primary data has benefits a CFO can project into a financial model. Companies with auditable emissions inventories access sustainable debt instruments on preferential terms, because banks can put a verified price on their risk instead of applying an uncertainty premium. They position their teams better against the demands of their European buyers, which under the Corporate Sustainability Reporting Directive (CSRD) have been required to report their supply-chain footprint since 2024, including their suppliers in LATAM. And they build an internal climate-risk management process that anticipates operating costs before they materialize as a fine, tariff or lost contract.

The drawbacks usually cited are the cost of the first cycle and the methodological complexity of the metrics pillar, especially in Scope 3. That is real when the company faces implementation without data infrastructure: a small team, records scattered across 2021 spreadsheets, and suppliers who do not know someone is going to ask them for their emissions.

Bono's reading of those difficulties is direct: the problem is not in the four pillars of the TCFD. The problem is in trying to build them on data that no one is capturing systematically. Without primary data there is no TCFD report: there is an estimate. And the estimate, in 2026, no longer passes the audit filter of a development bank or that of a European buyer that reports under CSRD and needs its supply-chain data for its own compliance.

The difference between the second row and the third is not methodological: it is a difference of infrastructure. The second row represents most mid-sized industrial companies in LATAM today: a report that covers the four pillars with GHG Protocol sector estimates but has no primary data by supplier or by plant. The third row is what development banks and European buyers require in 2026. Bono's infrastructure is built to close exactly that gap: connecting the company's operating systems with the emissions inventory that the four pillars of the TCFD require to be auditable.

The question we hear most from sustainability directors in industrial companies in Mexico and Colombia is not theoretical. It is operational: where do we start without spending a year on a process that in the end produces a document no one can audit?

We have worked alongside manufacturing, food, beverage and packaging companies with between 200 and 2,000 employees in the process of building their four pillars with verifiable data. The sequence that works always follows the same logic. We call it Bono's TCFD Data Framework, and it has three steps.

Step 1: Diagnosis of the four pillars. Before building the report, Bono generates a map of where the data each pillar needs lives inside the operation. For the governance pillar: is there a climate policy approved by the board and communicated in the annual report? For the strategy pillar: has the company modeled at least two temperature scenarios and does it know how they affect its operating costs and supply chain? For the risk-management pillar: is there a documented process to identify physical risks, such as drought or flood, and transition risks, such as the carbon tax or the CBAM tariff? For the metrics pillar: is the Scope 1, 2 and 3 data primary data or sector averages? This diagnosis takes between two and four weeks. Without it, any investment in the report is premature.

Step 2: Primary data capture by Scope. Bono's infrastructure connects directly to the company's operating systems, from energy meters to fuel records and Tier 1 supplier data, to build the emissions inventory with verifiable data. The GHG Protocol establishes that estimates based on sector averages have lower precision than primary operational data. That difference is exactly what an auditor looks for first. In companies with operations across multiple plants, we have reduced the information-gathering time from 14 weeks to under 3 weeks. Without the four pillars of the TCFD, your climate risk has no price. The metrics pillar is the one most frequently empty when we start working with a new company.

Step 3: Audit-ready report aligned with IFRS S2. Bono generates the report structured around the four pillars, with traceability for each data point by pillar, compatible with the demands of IFRS S2 and with the CDP corporate questionnaire, which since 2024 is aligned with IFRS S2 and with the TCFD recommendations. The result is not a communication PDF: it is an inventory with auditable evidence that a bank can review before approving a green credit line or a sustainability bond.

The most common friction in LATAM industrial companies is not a lack of willingness to report. It is that the energy-consumption data for each production line lives in the plant's billing system, which the sustainability team has no direct access to. The Scope 2 report ends up built from the building's total electricity bill, with no breakdown by process. The Scope 3 one is built with sector emission factors. That is the real state of most reports in the region. The auditor arrives, opens the supporting file, and within half a day already knows how much is estimate and how much is data.

In Chile, the Financial Market Commission issued General Standard 519 (NCG 519), which establishes the mandatory application of IFRS S1 and IFRS S2 for listed corporations, with 2026 fiscal-year data. The framework keeps the four pillars of the TCFD and incorporates industry-specific metrics. On top of that come the Framework Law on Climate Change (Law 21.455) and the carbon tax of 5 dollars per tonne of CO₂ already in force. CORFO Green financing is active for companies that can demonstrate verifiable reduction metrics.

In Brazil, CVM Resolutions 217, 218 and 219 establish the obligation to report under IFRS S1 and S2 for companies listed on B3 since 2026. In Mexico, the National Banking and Securities Commission (CNBV) has advanced the adoption of the IFRS S1/S2 standards for registered issuers, while CBAM applies carbon-intensity tariffs to industrial exports to Europe since 2026, which turns the climate report into a document with a direct tariff impact for any manufacturer with clients in the European Union.

In Colombia, the formal mandate is not yet established at the national level, but the market scenario applies pressure in another way. Companies such as Bancolombia, Grupo Nutresa and Ecopetrol voluntarily adopted the TCFD recommendations, generating a cascading demand toward their industrial suppliers. If you are a supplier to a company that reports its four pillars, your client will need your Scope 3 data, specifically Category 1 of the GHG Protocol, to complete its own inventory. Colombian law may be voluntary. The purchase contract is not. The TCFD without supplier data is a made-up number, and corporate buyers in LATAM already know it.

The TCFD as an entity was dissolved in October 2023, but its four pillars remain in force within IFRS S2. Companies that report under IFRS S2 automatically satisfy the TCFD recommendations. For practical purposes in LATAM, banks and regulators treat both names as equivalent. But the technical standard you must implement today is IFRS S2, which adds industry-specific requirements and requires quantifying the financial impact of material climate risks, something the TCFD did not explicitly demand. Reporting under TCFD today is a good entry point; staying only on TCFD means falling below the threshold that regulators in Chile and Brazil have already set.

It depends on the state of the data. Companies with centralized energy and fuel metering systems can complete a first cycle in eight to twelve weeks. Companies with data scattered across multiple plants, which is the most frequent situation in manufacturing, food and packaging in LATAM, need between four and six months for the first full cycle. The slowest phase is always Scope 3 capture, because it means involving suppliers who do not have that information systematized and who, in many cases, do not even know someone is going to ask them for it.

Yes. Since 2024, the CDP corporate questionnaire is aligned with IFRS S2 and with the TCFD recommendations. Reporting to CDP under its current methodologies covers the four pillars. But the level of detail CDP requires in the metrics pillar, especially in Scope 3 broken down by GHG Protocol category, exceeds what most industrial companies in LATAM deliver today. According to CDP, fewer than 2% of the companies that report reach the A level. The most frequent reason is not a lack of intention: it is the absence of primary data in Scope 3, exactly the fourth pillar.

The direct regulatory obligation applies mainly to listed companies, where IFRS S2 is already mandatory in Chile and Brazil since 2026. For a non-listed industrial company, pressure arrives through three parallel channels: development banks require climate data for green credit lines; corporate buyers pass their own CSRD or TCFD obligations on to their suppliers; and European clients ask for verifiable data since CBAM came into force. Companies that prepare now do not do it for direct regulatory compliance. They do it because access to preferential capital already carries that requirement, and that requirement does not disappear if the company is not listed.

• The TCFD was dissolved. Its four pillars live in IFRS S2. In Chile and Brazil, IFRS S2 is already mandatory for listed companies since 2026. Preparing now is not long-term planning: it is management of the current quarter.
• Without primary data on Scope 1, 2 and 3, the TCFD metrics pillar is empty. An empty pillar is opaque risk. Opacity is not financed at a preferential rate: it is financed with a spread, and you pay the spread.
• Without the four pillars of the TCFD, your climate risk has no price. In credit terms, that means someone else sets the price for you, with a premium your company absorbs.
• The Scope 3 data is not in last year's report. It is in the invoices of your Tier 1 suppliers. If no one is capturing them, there is a gap an auditor finds in half a day.
• CBAM applies carbon-intensity tariffs to industrial exports to Europe since 2026. Without verifiable primary data, that cost is absorbed by your margin or by your contract with the European client.
• Meeting the form of the TCFD with sector estimates and meeting the substance with primary data is not the same thing. Banks already know how to tell them apart. Auditors do too.

Every quarter without primary data across the four pillars of the TCFD is capital financed at a standard rate when it could be financed at a preferential rate, and contracts with European buyers that move to another supplier who can prove its footprint.