Governance/Regulation/Environment – Transparency
:: New market-led global initiative aims to provide financial institutions and corporates with a complete picture of their environmental risks and opportunities.
:: Two Co-Chairs announced to lead the Taskforce: David Craig, CEO of Refinitiv and Group Leader of Data & Analytics Division at London Stock Exchange Group (LSEG), and Elizabeth Maruma Mrema, Executive Secretary of the UN Convention on Biological Diversity (CBD).
:: Taskforce commits to delivering a framework by 2023 for organisations to report and act on evolving nature-related risks, to support a shift in global financial flows away from nature-negative outcomes and toward nature-positive outcomes.
June 4, 2021, New York – Major financial institutions, multinational corporates and the UN have endorsed the launch of a new market-led Taskforce on Nature-related Financial Disclosures (TNFD), which will support business in assessing emerging nature-related risks and opportunities.
More than half of the world’s economic output – US$44tn of economic value generation – is moderately or highly dependent on nature. The recorded extinction of 83% of wild mammals and 50% of plants therefore represents significant risk to corporate and financial stability. Action for nature-positive transitions could generate up to US$10.1 trillion in annual business value and create 395 million jobs by 2030.
A report titled ‘Nature in Scope’, published today, describes how the initiative will deliver a framework for organisations to report and act on evolving nature-related risks, in order to support a shift in global financial flows away from nature-negative outcomes and towards nature-positive outcomes. A complementary report also sets out the proposed technical scope for the TNFD.
Through an inclusive approach, the initiative aims to consult with a variety of stakeholders from all regions – to develop and build on voluntary, consistent disclosures to help corporates, investors, lenders and insurance underwriters manage nature-related risks, such as new legal liabilities and systemic loss of soil fertility.
In its first year, the TNFD aims to build upon the success of the Task Force on Climate-related Financial Disclosures (TCFD), which has become instrumental in mainstreaming the issue of climate-related financial risks. The TNFD’s framework for nature-related risks will complement the TCFD’s climate-related framework, to give companies and financial institutions a complete picture of their environmental risks. Through its framework, the TNFD will support organisations to report and act on both their nature-related risks. The framework will be tested and refined in 2022 before its launch and dissemination in 2023. In 2021, the G7 endorsed the launch of the TNFD.
The initiative to bring together a Taskforce on Nature-related Financial Disclosures was first announced in July 2020 by the four founding partners: UNDP, UNEP FI, WWF and Global Canopy. Kicking off its work in September 2020, an Informal Working Group, comprised of 74 Members across 24 countries – including financial institutions, corporates, governments, regulators, multilaterals, NGOs and consortiums – have worked to propose practical recommendations for the scope and workplan of the TNFD, which is released today. This informal group was ably co-chaired by market-leaders: Banorte, BNP Paribas and the Green Finance Institute. UNDP and UNEP FI served as a global accelerator team to help catalyze progress.