About the TNFD

Financial institutions and companies are still missing information needed to understand how nature impacts immediate financial performance or the longer-term financial risks that may arise from the organisation’s interactions with nature. Better information will play a key role in allowing financial institutions and companies to incorporate nature-related risks and opportunities into their strategic planning, risk management and asset allocation decisions.

The Taskforce on Nature-related Financial Disclosures (TNFD) has developed a risk management and disclosure framework for organisations to report and act on evolving nature-related risks, with the ultimate aim of supporting a shift in global financial flows away from nature-negative outcomes and toward nature-positive outcomes. UNEP FI is a founding partner of the TNFD, the beta-framework of which was released in March 2022, with the final recommendations released in 2023. For more on the TNFD, click here.

TNFD sector guidance

To help businesses successfully implement the TNFD framework, sector-specific guidance documents have been created to support the LEAP approach assessment, including sector metrics. Below is a quick summary of the guidance:

1. Value Chain Considerations:

Several industries, such as Oil and Gas, Metals and Mining, and Electric Utilities and Power Generators, discuss the importance of mapping out the entire value chain, including upstream and downstream activities. This comprehensive approach helps organizations identify potential environmental impacts at each stage of their operations.

2. Risk Assessment and Mitigation:

Various sectors, including Metals and Mining, Forestry and Paper, and Electric Utilities and Power Generators, emphasize the importance of risk assessment and mitigation processes. They suggest leveraging existing frameworks and standards for identifying and managing risks related to nature dependencies and impacts.

3. Technology and Innovation:
Electric Utilities and Power Generators highlight the need to consider different technologies within their scope, including renewable energy sources like wind and solar. This emphasis on innovation reflects a broader trend across industries towards adopting cleaner and more sustainable practices to reduce environmental footprints.

4. Data-driven Decision Making:
Multiple sectors, including Metals and Mining and Food and Agriculture, provide suggestions for using data sources and approaches to estimate key impacts and dependencies. This data-driven approach underscores the importance of evidence-based decision-making in addressing environmental challenges effectively.

5. Compliance with Standards and Frameworks:
Across various sectors, there is a mention of relevant standards and frameworks, such as the Global Reporting Initiative (GRI) and Sustainability Accounting Standards Board (SASB). This indicates a shared recognition of the importance of aligning sustainability efforts with established guidelines and reporting frameworks.

Pilot Testing with Financial Institutions

UNEP FI is leading the financial sector pilots, testing the TNFD framework with financial institutions across geographies and sectors to ensure it meets the ambitious needs of the market. The pilot invites financial institutions to participate in the design of the TNFD framework, providing lessons learned, recommendations and insights for future iterations.

The testing of the TNFD Framework started in June 2022, following the ‘open innovation approach’, in which the subsequent beta releases of the TNFD Framework will be piloted by financial and non-financial organisations. Some pilots might also engage central banks, market-makers (e.g exchanges, data providers), government agencies and relevant financial regulators.

While final recommendations by the TNFD were released in September 2023, UNEP FI continues to facilitate market participation and adoption of the framework through our pilots. To share lessons learned and recommendations from the first round of extensive pilot testing conducted from June 2022 until February 2023, we published a report in April 2023. Access it here.

GEF project: Establishing the Taskforce on Nature-related Financial Disclosures

The release of the first UN Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES) report in April 2019 made clear that the world’s natural capital is in sharp decline – especially in inter-tropical areas – and that without rapid and systemic change, biodiversity loss, deforestation and land degradation will severely disrupt ecosystems, social stability and the world economy. The COVID19 pandemic, which has been linked to illegal wildlife trade, environmental degradation, and poverty, is demonstrating the huge impact of un-recognized biodiversity related risk, to both the economy and humanity. A key driver of that situation is the financing flowing to economic activities that harm natural capital with no market recognition of the costs to ecosystems and decline in global environmental benefits.

This GEF project will support the establishment of a Taskforce on Nature-related Financial Disclosures (TNFD) to develop and disseminate a global framework for corporates and financial institutions to assess, manage and report on their dependencies and impacts on nature. The TNFD will address threats to the health and value of natural capital derived from the conduct of corporate activities that do not adequately consider the financial materiality and impacts of biodiversity loss. Initiatives such as TNFD will enable governments to better integrate knowledge on nature risk of those financial flows within their national policies and make the relevant strategic plans more effective in responding to emerging country priorities. A common, credible, and widely supported TNFD recommendations framework for reporting on nature-related risks and impacts can pave the way for companies and Financial Institutions (FIs) to better identify and address them in their supply chains and portfolios

Environmental and Social Safeguards Documents

Information on Grievance Mechanism

  • Project stakeholders can submit any grievances to the project to the Executing Agency, directly to the GEF Project Management Unit (PMU) responsible officer for the grievances mechanism. All grievances will be reviewed and responded to in writing within 10 working days of receipt. Both complaints and responses will be recorded into the project monitoring. More information can be found here (p.27)

If you wish to learn more about our TNFD pilots, or have any questions regarding the Taskforce, please contact Romie Goedicke and/ or Gabriela Andrea Hermosilla Goncalves directly.

Access the members area of the TNFD pilot here.