TNFD Launches To Address Nature Related Risks And Opportunities

16th June 2021 by CMIA

Announced in 2020, the much-anticipated Taskforce on Nature-related Financial Disclosures (TNFD) has launched today, aiming to help businesses assess nature-related risks and opportunities, such as legal liabilities and systemic loss of soil fertility.

A framework for reporting and action is expected by 2023 to support a shift in global financial flows toward nature-positive outcomes.

More than half of the world’s economic output – $44 trillion of economic value generation – is moderately or highly dependent on nature, according to the World Economic Forum (WEF), which adds that action for nature-positive transitions could generate up to $10.1 trillion in annual business value and create 395 million jobs by 2030.

Heavily endorsed by major institutions and corporates, TNFD is based on the Taskforce on Climate-related Financial Disclosures (TCFD), which has been widely adopted by industry for uniform but voluntary disclosure of climate action plans and performance.

TNFD will consist of approximately 30 members, with an equal representation of financial institutions, corporates and data/service providers from developed and emerging markets. It will be informed by a diverse Stakeholder Group.

Two co-chairs have been appointed to lead the TNFD – David Craig, CEO of Refinitiv and group leader of data and analytics division at London Stock Exchange Group, and Elizabeth Maruma Mrema, executive secretary of the UN Convention on Biological Diversity.

Maruma Mrema said: “Science and economists are clear: nature is too big to fail. The health of the ecosystems on which we, and our economies, depend is deteriorating more rapidly than ever. Over the next few years we will work with Taskforce members, and other stakeholders, to design a framework that can be impactful and ultimately practical to companies and financial institutions. We encourage a wide range of financial institutions and corporates to participate in the TNFD and to become early adopters of the TNFD framework when it launches in 2023.”

Craig added: “Without urgent action, ongoing loss to biodiversity poses unprecedented risks for business, both now and in the future. Better nature-related data that enables informed decision-making by financial institutions and companies is how we will solve the global ecological crisis. Financial disclosures are essential to a market-based solution to nature loss. A properly functioning, informed market will price in risks appropriately and be empowered to channel investments to more sustainable opportunities.”