The Complete Guide to TCFD for Logistics Companies: 5 Essential Steps Every Business Must Take in 2025
Hello, this is GLEC, a company specializing in carbon emission measurement for the logistics and transportation industry.
The Climate Revolution is Here - Are You Ready?
The logistics industry is facing unprecedented changes as climate-related regulations tighten worldwide. The Task Force on Climate-related Financial Disclosures (TCFD) has become more than just a reporting framework - it's now a survival requirement for logistics companies operating in the global market.
Recently, I had a conversation with a mid-sized logistics company CEO who said, "Our major clients keep talking about ESG and carbon neutrality, making new demands. I can't postpone this anymore, but I don't know where to start."
If you're feeling the same way, you're not alone. Today, I'll break down everything you need to know about TCFD in simple, actionable terms that you can implement immediately.
What Exactly is TCFD?
Understanding the Framework That's Reshaping Global Business
The Task Force on Climate-related Financial Disclosures (TCFD) was established in 2015 by the Financial Stability Board (FSB). It's an international standard framework that requires companies to transparently disclose climate-related risks and opportunities from a financial perspective.
Here's what makes TCFD crucial: While the original task force disbanded in October 2023, its recommendations have been fully integrated into the International Sustainability Standards Board (ISSB) IFRS S2 standards, making them even more powerful and globally mandatory.
The 4 Core Pillars of TCFD
TCFD is built on four foundational areas that represent how organizations operate:
Governance - How your organization manages climate-related risks and opportunities at the board and management level.
Strategy - The actual and potential impacts of climate-related risks and opportunities on your business, strategy, and financial planning.
Risk Management - How you identify, assess, and manage climate-related risks.
Metrics and Targets - The metrics and targets used to assess and manage relevant climate-related risks and opportunities.
2025: The Year Everything Changes for Logistics
Critical Regulations You Cannot Ignore
Three major regulations are reshaping the logistics landscape in 2025, and companies that aren't prepared face serious consequences.
1. Corporate Sustainability Reporting Directive (CSRD) - March 2025
The European Union's CSRD comes into effect in March 2025, requiring companies to report on over 1,100 ESG data points. For logistics companies, this means:
Companies with 250+ employees OR revenue exceeding 40 million euros OR assets over 20 million euros must comply.
The most challenging aspect for logistics companies is Scope 3 emissions reporting - tracking carbon emissions across your entire supply chain, including all partners and suppliers.
2. EU Deforestation Regulation (EUDR) - December 2025
Starting December 2025, the EUDR prohibits EU market entry for products from deforested land after December 31, 2020. This affects seven key commodities: cattle, cocoa, coffee, palm oil, rubber, soy, and wood.
Logistics companies must implement complete traceability systems with GPS coordinates and ensure strict separation between compliant and non-compliant products.
3. SEC Climate Disclosure Rules - Finalized March 2024
For US-listed companies and their subsidiaries, the SEC's new climate disclosure rules require mandatory reporting of Scope 1 and 2 emissions, though Scope 3 requirements were removed from the final version.
The 5 Major Climate Risks Facing Logistics Companies
Physical Risks - Threats That Are Already Reality
Acute Risks (Sudden Shocks)
Extreme weather events are no longer exceptional - they're becoming routine. In 2024, European floods shut down DHL hubs for three days, while typhoons caused 50 billion won in damages at Busan Port container terminals.
Heat waves pose particular challenges for refrigerated transport, with cooling system failures increasing by 30% during extreme temperature events. German floods in 2021 forced logistics networks to use alternative routes for six months.
Chronic Risks (Long-term Changes)
Rising sea levels threaten major port cities, with a 30% increase in flood risk expected by 2050. Average temperature increases of 2°C could raise refrigerated transport costs by 25% by 2030.
Changes in precipitation patterns are creating new challenges, from infrastructure flooding during intense rainfall to drought-related disruptions in agricultural product transportation.
Transition Risks - Policy and Market Changes
Policy and Legal Risks
Carbon pricing is set to dramatically increase costs. The EU's Carbon Border Adjustment Mechanism (CBAM) could increase transportation costs by 10-15%, while low-emission zones are expanding to 50 cities by 2025, banning diesel vehicles from urban areas.
Technology Risks
The push toward electric vehicle mandates for urban delivery starting in 2027 requires initial investments 2-3 times higher than conventional vehicles. Companies slow to adopt automation and AI risk rapid competitive decline.
Market Risks
Customer demands are shifting dramatically. 90% of B2B customers now prefer carbon-neutral logistics providers, while financial institutions make climate risk assessment mandatory for loan approvals.
4 Incredible Opportunities Hidden in Climate Change
Green Logistics Premium
Forward-thinking logistics companies are charging 20-30% premium rates for carbon-neutral delivery services. One company we consulted implemented ESG consulting services, helping clients manage their Scope 3 emissions and creating entirely new revenue streams.
Digital Transformation Acceleration
AI-powered route optimization is reducing fuel costs by 15-25%, while predictive analytics using climate data improve inventory efficiency by 40%. Smart logistics companies are turning environmental requirements into competitive advantages.
Circular Economy Participation
Reverse logistics specialization is generating 30% annual revenue increases for early adopters. Biodegradable packaging initiatives are enhancing brand value, while recycling and returns processing become premium services commanding 150% of standard delivery rates.
Global Supply Chain Restructuring
The trend toward near-shoring to reduce carbon footprints creates opportunities for regional logistics specialists. Renewable energy-based distribution centers are becoming preferred partners for ESG-conscious clients.
Your 6-Month Action Plan for 2025
Immediate Actions (August - December 2025)
August: Situation Assessment
Conduct a comprehensive audit of your current carbon emission measurement systems. Evaluate your preparation level across TCFD's four core areas and benchmark against competitors' ESG disclosure practices.
September: Organizational Framework
Establish a dedicated ESG team with at least three members. Consider creating a board-level ESG committee and assemble an external expert advisory panel.
October: Data Collection Infrastructure
Implement real-time emission monitoring systems for your vehicle fleet. Establish ESG data collection processes with suppliers and evaluate digital MRV (Measurement, Reporting, Verification) system options.
November: Pilot Disclosure Preparation
Create internal reports based on TCFD recommendations. Select and contract with third-party verification providers and gather stakeholder feedback on your initial efforts.
December: Final Preparations
Ensure complete EUDR compliance readiness and finish preparations for your first CSRD report in 2026. Set clear targets and KPIs for the following year.
3 Critical Success Factors
Strong Leadership Commitment
Success requires CEO-level commitment with direct ESG reporting to the board monthly. Executive performance evaluations should include at least 20% ESG metrics, ensuring climate action becomes embedded in corporate culture.
Team Capability Development
Invest in specialized TCFD training with minimum 40 hours annually per team member. Support carbon accounting certification and organize benchmarking tours to study international best practices.
Phased Investment Strategy
Plan your investments strategically: Year 1 focuses on system development (100-300 million won), Year 2 emphasizes specialized personnel recruitment (200-300 million won annually), and Year 3 scales up green infrastructure investments (1-3 billion won).
Start Today: 3 Immediate Steps
Free Preparation Actions
Conduct TCFD Self-Assessment
Download international standard checklists from the FSB official website. Score your current level on a 0-100 scale and prioritize vulnerable areas for immediate attention.
Analyze Competitor ESG Reports
Study ESG disclosures from the top 5 companies in your industry. Benchmark common metrics and targets while identifying differentiation opportunities.
Apply for Government Support Programs
Research available programs from the Ministry of SMEs and Startups ESG management support, Ministry of Trade, Industry and Energy eco-friendly logistics support, and Ministry of Environment greenhouse gas reduction facility support.
Low-Cost Investment Options
Carbon Footprint Measurement Solutions (500,000-1,000,000 won monthly)
Implement real-time fuel consumption monitoring for individual vehicles, automatic carbon emission calculations by route, and automated monthly reporting systems.
ESG Management Platform Subscriptions (300,000-800,000 won monthly)
Access TCFD disclosure templates, supplier ESG evaluation tools, and regulatory trend alert services.
The Bottom Line
TCFD is no longer optional - it's become a survival requirement for modern logistics companies. Starting in the second half of 2025, the gap between prepared and unprepared companies will widen dramatically.
The logistics industry accounts for 16% of global carbon emissions, making it both the most scrutinized sector and the one with the greatest opportunities for impact. Companies that start today will become tomorrow's winners.
Don't wait for perfect preparation. Start taking steps today, no matter how small. The companies that begin their TCFD journey now will be the ones thriving in 2030.
In our next guide, we'll dive deep into building organizational frameworks for TCFD compliance, covering exactly who should be responsible for what and how to create accountability systems that drive real results.
For carbon emission measurement consultation and inquiries, please visit the GLEC website.
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