Taskforce on Nature-related Financial Disclosures (TNFD) launched

4 June 2021

Major financial institutions, corporates and governments endorse launch of Taskforce on Nature-related Financial Disclosures, TNFD

  • A new global initiative aims to provide financial institutions and corporates with a complete picture of their environmental risks and opportunities.
    _
  • United Nations Environment Programme Finance Initiative (UNEP FI), United Nations Development Programme (UNDP), the World Wildlife Fund (WWF) and Global Canopy are founding partners.
    _
  • Two Co-Chairs appointed 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.

Major financial institutions and multinational corporates 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[1]. The recorded extinction of 83% of wild mammals and 50% of plants therefore represents significant risk to corporate and financial stability[2]. Action for nature-positive transitions could generate up to US$10.1 trillion in annual business value and create 395 million jobs by 2030[3].

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 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

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 impacts and dependencies on nature. The framework will be tested and refined in 2022 before its launch and dissemination in 2023.

The initiative to bring together a Taskforce on Nature-related Financial Disclosures was first announced in July 2020. Since 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.

Following the completion of this preparatory phase, the TNFD has formally appointed two Co-Chairs: 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 United Nations Convention on Biological Diversity (CBD).

The Taskforce 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.

Commenting, Elizabeth Maruma Mrema, Co-Chair of the TNFD, 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.”

Fellow TNFD Co-Chair, David Craig, also commented: “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.”

Deputy Governor of the Banque de France, Sylvie Goulard, said: “For too long we took natural resources for inexhaustible and did not look at the consequences of human action on the planet. Climate change and the rapid loss of biodiversity invite us to transform our societies and economies, which means that finance needs to be transformed as well. The TNFD, a new global initiative, aims to give the finance sector a complete picture of environmental risks. The TNFD’s work on nature-related risks will be an important complement to the work already done on climate-related risks. Biodiversity is a systemic challenge and having a global platform for collaboration across private actors, international organisations, public authorities and NGOs is essential. The TNFD will support the development of more reliable and comparable nature-related data, which is critical to promote sustainable investments.”

Global Environment Facility CEO and Chairperson, Carlos Manuel Rodriguez, said: “Mainstreaming biodiversity into the financial sector is one of the prerequisites to reversing nature loss. The Global Environment Facility is a proud anchor investor in the TNFD and I have great expectations for this initiative. Helping companies, investors, and financial institutions to measure and address financial risks derived from biodiversity loss will help redirect financial flows into nature-positive investments. We need this kind of transparency to underwrite the changes the planet needs, both in the short and long-term.”

CEO of BNP Paribas, Jean-Laurent Bonnafé, said: “Collective action is needed to help protect our natural ecosystems and stop their degradation. BNP Paribas has already taken commitments to preserve biodiversity, but common and applicable standards are needed to leverage the power of finance for nature. The TNFD is key in convening market participants towards such standards.”

Global Chairman & CEO, KPMG International, Bill Thomas: “Biodiversity loss and the destruction of the natural world can only be prevented if we all push for urgent and necessary changes. A critical step is ensuring that our financial markets drive sustainable growth. KPMG is committed to helping accelerate that transformation, and we fully endorse the critical role the TNFD will play in shaping a nature-positive future.”  

Chief Sustainability Officer of Credit Suisse, Marisa Drew: “Our ability to protect and preserve the planet’s biodiversity is critical to its survival. We are proud to support the TNFD and the development of a framework that will guide companies to evaluate, operate and report on their impacts on nature while at the same time, supporting capital flows towards nature-positive outcomes.”

CEO of Wells Fargo Asset Management, Nico Marais: “As a global asset manager with clients and investments around the world, Wells Fargo Asset Management (WFAM) is aware of the increasing relevance of nature-related risks to both our economy and society – and the opportunities in addressing those risks. At WFAM, we strive to create thoughtful solutions and a future of which we can be proud. Therefore I’m excited that WFAM is participating in the TNFD’s efforts to develop a framework intended to support the assessment of nature-related financial risks, and to facilitate investors seeking sustainable solutions with ‘nature-positive’ outcomes.”

Juergen Voegele, Vice President for Sustainable Development, World Bank, Juergen Voegele, said: “Biodiversity is a key development issue, with the loss of ecosystem services affecting poor countries the most. While public sector and financial regulators create the necessary enabling conditions for nature-smart action, private sector finance will be necessary to reverse biodiversity loss. The Taskforce on Nature-related Financial Disclosures has a vital role as it seeks to better integrate nature-related risks into decision-making, leading to greener, more resilient and inclusive development outcomes.”

Head of Sustainability at H&M Group, Leyla Ertur: “Biodiversity and variety of life on earth is crucial to sustain healthy and functional ecosystems. It is only through collaborations that we can solve our global challenges within the loss of nature, and we believe that this joint taskforce on nature-related financial disclosure will play an important role for including biodiversity into our industry. We are happy to use our size and scale to transform our industry for the better.”

ENDS

Editor’s notes:

The Taskforce on Nature-related Financial Disclosures (TNFD):

The idea for a TNFD began in January 2019 at the World Economic Forum’s Davos meeting. The idea was catalysed further by Global Canopy, United Nations Development Programme (UNDP), United Nations Environment Programme Finance Initiative (UNEP FI), and the World Wildlife Fund (WWF), leading to the initiative of bringing together a Taskforce on Nature-related Financial Disclosures (TNFD) formally launching in July 2020, with the four organisations as Founding Partners.

The goal of the TNFD is to provide financial institutions and companies a complete picture of their environmental risks. Better information will allow financial institutions and companies to incorporate nature-related risks and opportunities into their decision-making processes.

In 2023, the TNFD 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 toward nature-positive outcomes.

The Taskforce will consist of approximately 30 members, with an equal representation of financial institutions, corporates and data/service providers from developed and emerging markets.

Informal Working Group Members:

The TNFD has been catalysed through an Informal Working Group (IWG), established in September 2020, comprising 74 financial institutions, regulators, corporates and others. IWG members include:

Financial institutions and private firms:

AFD: Agence Française de Développement, France Aggrego Consultores, Brazil

 

AXA, France

 

BPCE/Natixis, France

 

BNP Paribas, France

 

BP, UK

 

Banco del Progreso, Alcaldía de Cúcuta, Colombia

 

Banco Sudameris, Paraguay Banorte, Mexico

 

BNDES – Brazilian Development Bank

 

CAF: Latin America Development Bank Citi, USA

 

Credit Suisse, Switzerland Danske Bank, Denmark

 

DBS Bank, Singapore

 

EBRD: European Bank for Reconstruction and Development

 

EcoAdvisors, Canada

 

EIB: European Investment Bank

 

Ernst & Young, USA

 

FAMA Investimentos, Brazil
FirstRand Group, South Africa

 

GlaxoSmithKline Plc, UK

 

H&M, Sweden

 

HSBC Pollination Climate Asset Management

 

Iberdrola, Spain
IFC: International Finance Corporation Impax Asset Management, UK

 

ISS ESG: Institutional Shareholder Services Inc, USA

 

JBS

 

Kering
KPMG

 

Lloyds Banking Group, UK

 

Manulife Investment Management

 

Maua Capital, Brazil

 

Mirova, France
NatWest Group, UK

 

Pimco, USA

 

Rabobank, Netherlands

 

Raiffeisen Switzerland

 

Reckitt Benckiser, UK

 

Rio Tinto

 

Robeco, The Netherlands Standard Chartered, UK

 

Storebrand Asset Management, Norway

 

Sumitomo Mitsui Trust Asset Management, Japan

 

Tesco, UK

 

Wells Fargo Asset Management, US

 

World Bank

 

Yes Bank Limited, India

 

 

Governments and regulators:

CNBV: Comisión Nacional Bancaria y de Valores, México COFEMA: Federal Council for the Environment of Argentina

 

Government of France

 

Government of the Netherlands

 

Government of Peru

 

Government of Switzerland

 

Government of the United Kingdom

 

RBA: Retirement Benefits Authority, Kenya

Think tanks and consortia:

CEBDS: Brazilian Business Council for Sustainable Development CDSB: Climate Disclosure Standards Board

 

CBD: Convention on Biological Diversity

 

CEDAF, Domincan Republic

 

CIFAL Argentina

 

Ecoacsa, Spain

 

FC4S: Financial Centers for Sustainability

 

SIF: Sustainable Insurance Forum

 

Finance for Tomorrow

 

GEF: Global Environment Facility

 

[1] WEF: Nature Risk Rising: Why the Crisis Engulfing Nature Matters for Business and the Economy

[2] PNAS: The biomass distribution on Earth.

[3] WEF: New Nature Economy Report 2: The Future of Nature and Business

Facebooktwitterlinkedin