Climate risk for small suppliers: TCFD without the jargon

TCFD organised climate risk reporting into four pillars: governance, strategy, risk management, and metrics and targets. The Task Force disbanded in 2023 and its approach now sits in UK SRS S2. No UK law asks a small supplier to report this way, but when a customer asks about climate risk, a one-page answer under those four headings, covering your physical and transition risks, is enough.

Updated 19 October 2026 by the Carbon Recycling team. Figures use the official UK government conversion factors and are checked against the current gov.uk guidance.

Why a customer is asking

Big companies have to report how climate change could affect their business, and that includes their supply chain. A supplier whose depot floods, or who can't meet a new carbon requirement, is a risk to them. UK SRS S2, which most UK listed companies report against for accounting periods from 1 January 2027, expects them to look at climate risks across their value chain. So questionnaires now include questions like "what climate-related risks have you identified?" alongside the emissions questions.

The Task Force on Climate-related Financial Disclosures (TCFD) is where the language comes from. It disbanded in October 2023, having finished its work, and its recommendations are fully built into IFRS S2 and the UK's version, UK SRS S2. Our UK SRS guide covers the rules for big companies.

Does it apply to you?

Almost certainly not as a legal requirement. The Companies Act climate disclosure rules only apply to organisations with more than 500 employees that are also traded, banks, insurers or, for private companies and LLPs, have more than £500 million turnover. The FCA's rules apply to listed companies. Neither reaches a small or medium-sized business. The reason to answer is commercial: it is a question on the form, and a blank costs points.

The two kinds of risk

Type	What it means	Examples for a small firm
Physical, acute	Weather events such as storms, floods, drought or heatwaves	A flooded unit, staff unable to travel, a heatwave stopping outdoor work
Physical, chronic	Longer-term shifts in temperature, rainfall and sea level	Hotter offices needing cooling, water shortages, a key supplier in an area at rising risk
Transition: policy and legal	New climate rules and requirements	Public contracts above £5 million a year requiring a Carbon Reduction Plan
Transition: market and technology	Customers, costs and technology moving towards low carbon	Customers choosing lower-carbon suppliers, rising costs for fossil-fuelled vans and heating
Transition: reputation	How customers and staff see your climate record	Losing a bid to a competitor with a published plan

These categories come from the definitions in UK SRS S2, which took them from TCFD. Climate change can bring opportunities too, such as winning work because you can show your figures. Say so if it applies.

A one-page answer under the four pillars

Governance. Who in the business is responsible for climate, and how often the directors look at it. One sentence is fine: "Our operations director owns our carbon plan, and the board reviews it twice a year."
Strategy. Your two or three main risks and opportunities, and over what time frame: short, medium or long term. Be specific to your business, not generic.
Risk management. How you spot and handle them. For example: you checked your sites' flood risk, you hold continuity plans, you review customer requirements before each tender.
Metrics and targets. Your emissions, your reduction target and your progress. This is the part customers can compare, so give numbers.

For physical risk, start with where you are. In England, the government's long term flood risk service shows an area's risk from rivers, the sea, surface water and reservoirs, and how climate change may change it. It doesn't tell you whether a specific building will flood, so describe it as area risk.

Metrics: where the numbers come from

Your footprint is also a measure of your transition risk, because the activities that burn fossil fuel are the ones new rules and customer requirements bear down on. Take an illustrative supplier with an office and depot using 30,000 kWh of electricity and 40,000 kWh of gas a year, and vans burning 6,000 litres of diesel. With the 2026 government factors, its Scope 1 and 2 is 26.72 tonnes CO2e, and 85% of it comes from gas and diesel burned on site and on the road. Those are the lines a reduction target, and a customer, will look at first. Cutting them is also the real-world gain: each tonne off those lines is a tonne the atmosphere doesn't get.

If you set out targets and actions as well as risks, you have the core of a transition plan: see transition plans for small firms. For the emissions questions that usually sit beside the risk questions, see what UK SRS S2 customers ask suppliers.

How Carbon Recycling helps

Carbon Recycling fills in the metrics and targets pillar from your own records: Scope 1, 2 and 3 emissions with the UK government factors, a baseline, a reduction target and a pathway, in a Carbon Reduction Plan your directors sign off. The free supplier questionnaire answer bank has model answers for the governance and target questions that sit alongside climate risk on most forms.

Frequently asked questions

Does TCFD apply to small businesses?

No. In the UK, TCFD-style climate disclosures are required only of listed companies and of the largest companies and LLPs, broadly those with more than 500 employees and, for private ones, more than £500 million turnover. A small supplier is asked about climate risk by customers, not by law.

Does TCFD still exist?

The Task Force itself disbanded in October 2023 after its work was folded into the ISSB's IFRS S2, which the UK adopted as UK SRS S2 in February 2026. Its four pillars live on in those standards, and companies can still use the TCFD recommendations.

What is the difference between physical and transition risk?

Physical risks come from the climate itself: floods, storms and heatwaves, and slower shifts such as hotter summers or water shortages. Transition risks come from the move to a low-carbon economy: new rules, customer requirements, technology changes, market shifts and reputation.

Do I need scenario analysis?

Not as a small supplier answering a customer. Large companies reporting under UK SRS S2 have to use climate scenario analysis. For you, a plain description of your main risks over the short, medium and long term, and what you are doing about them, is a proportionate answer.

How do I check my flood risk?

In England, the government's Check long term flood risk service shows an area's risk from rivers, the sea, surface water, reservoirs and in some places groundwater, and how climate change may change it. Scotland, Wales and Northern Ireland have their own flood maps.

Plastic Packaging Tax: what it is and how it links to carbon
The 2026 rate, who registers, the April 2027 changes and where plastic packaging sits in your Scope 3 footprint.
Packaging EPR: what small producers have to report
Who counts as a small producer under packaging EPR, what to report by 1 April, the fees, and how the data links to your carbon footprint.
ISO 14064-1 explained: do you need it?
The ISO greenhouse gas inventory standard in plain English: its six categories, how it compares with the GHG Protocol, and when you need it.

All posts on this topic →

Get your figures and reports done in an afternoon

Add a year of bills and Carbon Recycling produces your footprint, PPN 006 Carbon Reduction Plan and SECR report, with every figure traced to its government factor. Prices are on the pricing page, from £59 a month + VAT.

Start free trial See prices

14 days free. No card needed.