The Taskforce on Nature-related Financial Disclosures (TNFD) has published its final recommendations for nature-related risk management and disclosure after two years of design and development.
The TNFD is a market-led, science-based, and government-backed initiative to provide organizations with the tools to act on nature-related issues. The taskforce was specifically tasked with developing recommendations and guidance and was formed in June 2021 with the appointment of Co-Chairs David Craig and Elizabeth Maruma Mrema. The TNFD includes 40 individual members representing financial institutions, corporations, and market service providers with over $20 trillion in assets.
The recommendations aim to better inform decision-making by companies and capital providers, and give the global financial sector a boost to corporate reporting related to nature. The work ultimately is targeting “a shift in global financial flows toward nature-positive outcomes and the goals of the Kunming-Montreal Global Biodiversity Framework,” according to the press release.
“The release of the TNFD’s 14 Disclosure Recommendations and implementation guidance comes at a critical time, with rapidly growing interest across business and finance globally on nature and biodiversity issues,” the TFND said in a statement. “Policymakers, regulators, asset owners, asset managers, and leading global companies are all increasing their focus on nature-related risk management and the necessity of (mobilizing) private sector engagement and finance to tackle nature loss and scale-up nature-based solutions.”
The recommendations follow those created by the International Sustainability Standards Board (ISSB), as well as those by the Task Force on Climate-related Financial Disclosures (TCFD). The recommendations specifically provide a set of nature-related guidance to enable reporting jurisdictions.
“Nature loss is accelerating, and businesses today are inadequately accounting for nature-related dependencies, impacts, risks, and opportunities,” Craig, who is also the founder and former CEO of Refinitiv, said in a statement. “Nature risk is sitting in company cash flows and capital portfolios today. The costs of inaction are mounting quickly. Businesses and financial institutions now have the tools they need to take action. Building on the language, structure, and approach of the TCFD and consistent with the ISSB’s sustainability reporting baseline, the adoption of the TNFD Recommendations represent a step-change in the momentum and capacity for business and finance to identify, assess, and disclose their exposure to nature-related issues in a manner consistent with climate-related-reporting.”