In February 2023, we wrote about how policymakers and regulators could support the implementation of the Kunming-Montreal Global Biodiversity Framework (GBF). With only four months ahead of the Convention on Biological Diversity (CBD) COP16 in Cali, Colombia, we look at how policy and regulatory initiatives have evolved, and what further steps are needed to support the alignment of financial flows with the GBF.   

Nature-related reporting and data  
The landscape of nature-related disclosure and reporting frameworks has evolved significantly since Montreal, as highlighted by UNEP FI’s recent report Accountability for Nature. The International Sustainability Standards Board (ISSB) released its first batch of sustainability disclosure standards in June 2023, whilst the Taskforce on Nature-related Financial Disclosures (TNFD) also published its disclosure recommendations and guidance in September 2023. Significant jurisdictions, including Australia, Brazil, Canada, and the United Kingdom, have announced their intention to adopt the ISSB standards over time, this is expected to widely influence nature reporting in the future. The ISSB intends to expand its coverage to nature in 2025. In addition, increased collaboration between initiatives is taking place, for example, between ISSB and TNFD, the Global Reporting Initiative (GRI) and TNFD, as well as GRI and ISSB. UNEP FI is supporting this work by updating the Accountability for Nature report, expected in January 2025, and supporting its members in implementing this work, for example, via TNFD implementation support under the UNEP FI Risk Centre. At the national level, the three major Chinese stock exchanges recently unveiled mandatory ESG disclosures, including nature, for listed companies. This is recognized as a huge development to enhance nature data in the world’s second-largest economy.  

Nature taxonomies and standards
Sustainable finance taxonomies that provide comprehensive classification systems and definitions are being developed or implemented in over 40 countries globally – an essential step for shared and scientific definitions of what constitutes sustainable economic activities. However, more and more sustainable finance taxonomies around the world are defining environmental objectives beyond climate change and social objectives. A key challenge is ensuring consistency and interoperability between taxonomies across borders, while considering the specificities of national and regional contexts. To enhance interoperability, the Working Group on Sustainable Finance Taxonomies of Latin America and the Caribbean (LAC)1 is developing a regional framework for nature-positive taxonomies with a focus on the conservation, restoration, and sustainable use of biodiversity and its ecosystems in LAC, to be launched at COP16. The LAC Taxonomy Common Framework for Biodiversity will be the first of its kind and will offer a model framework to support countries in the region in developing their own taxonomies in line with global best practices. This regional framework will support member states in encouraging capital flows toward common biodiversity-related goals and support cross-border investment.  

Companies’ governance and due diligence obligations  
Governance and due diligence obligations have also evolved to integrate biodiversity considerations. Regulatory bodies are increasingly expecting companies to not only be aware of their environmental impact, but also actively manage and mitigate risks associated with biodiversity. This could include, for example, conducting thorough due diligence on supply chains to ensure that sourced materials are not contributing to habitat destruction or species extinction. The EU Corporate Sustainability Due Diligence Directive, adopted in 2024, also requires large European companies to identify, prevent and/or mitigate adverse impacts, including environmental impacts.   

Supervisory expectations and guidance on biodiversity risk management  
Several supervisory authorities are stepping up their expectations and providing more detailed guidance on biodiversity risk management. For instance, the Network for Greening the Financial System (NGFS) published a conceptual framework on nature-related risks in September 2023, and the Bank Negara Malaysia is currently developing nature-related risk assessment guidance for the Malaysian banking sector. This trend signifies a shift towards more proactive and preventative measures in biodiversity risk management. A number of countries, including the UK most recently, have explored the effect of nature loss on GDP and financial markets.  

UNEP FI to support global guidance on developing nature taxonomies  
There has been a push for better international alignment on biodiversity policies and regulations, through forums such as the NGFS. The complexities of ecological issues, which often cross-national boundaries, require a coordinated global response. International agreements and collaborations are increasingly focusing on setting common goals and sharing best practices.  

In this context, UNEP FI, in collaboration with UNEP-WCMC and UNEP ETPU, and the support of other partners, is launching an effort to develop global guidance for regulators and central banks on good practice for net-zero nature-positive taxonomies and integrating nature into climate taxonomies at global and regional levels. This initiative will help support global interoperability to enable cross-border financial flows. The work will build on insights and experience gained while developing the Common Framework of Sustainable Finance Taxonomies for Latin America and the Caribbean.

[1] The Working Group on Sustainable Finance Taxonomies of Latin America and the Caribbean (LAC), consisting of UNEP FI, alongside the European Commission, UNDP, IMF, IFC, World Bank, IDB, CAF, ECLAC, FAO, and WWF, is currently working on the second phase of the Taxonomy Common Framework for LAC, focusing on Biodiversity Objective. It is a follow up to the first phase, LAC Taxonomy Common Framework on Climate Changes Objectives, with this report that was published in 2023: Common Framework for Sustainable Finance Taxonomies for Latin America and the Caribbean – United Nations Environment – Finance Initiative ( Both phases have been funded by the European Commission via the EUROCLIMA Programme.