Final draft released for framework on nature-related financial disclosure
The Taskforce on Nature-related Financial Disclosures (TNFD) has released its fourth and final draft framework to enhance corporate approaches to disclosing nature-related data, introducing new steps to align reporting with the Taskforce on Climate-related Disclosures (TCFD).
In March 2022, the TNFD unveiled the first iteration of its beta framework to help corporates outline and disclose nature-related risks and impacts in alignment with corporate reporting. The TNFD updated the framework twice that year.
The Taskforce has today (28 March) unveiled the final draft of the framework. Organisations will have the chance to consult on the approach for the next 60 days, with the TNFD to then run pilot testing and publish the final version in September 2023.
The updated framework defines risk and opportunity assessments under the LEAP nature approach, including reducing disclosure sets from 15 to 14 and aligning the recommendations aligned with those of the TCFD.
The TNFD’s co-chair and deputy director of UNEP Elizabeth Mrema said: “COP15 in Montreal saw very strong support from business and finance globally, with over 1,000 private sector participants attending. That helped ensure a robust corporate reporting target, Target 15, in the Global Biodiversity Framework (GBF) now supported by 190 governments and covering nature-related impacts, dependencies and risks.
“I look forward to further market feedback and participation ahead of the September launch of our recommendations so that market participants can start identifying, assessing and disclosing their nature-related issues as soon as possible. Ongoing collaboration with our standards development partners and with regulators will also be critical to help codify the Taskforce’s recommendations so that nature-related reporting becomes standard business practice over time.”
The TNFD comprises 40 senior executives drawn from leading financial institutions, corporates and market service providers, with combined assets of more than $20trn. To date, it has garnered the support of more than 1,000 organisations, with 200 organisations piloting and testing aspects of the draft framework.
The latest framework attempts to align nature-related disclosure with the TCFD recommendations and reporting approach, including all 11 TCFD-related disclosures. The TNFD hopes that the alignment will enable more market participants to integrate climate and nature into reporting.
The latest TNFD framework also adapts the commonly used Scope 1, 2, and 3 in emissions reporting and has redefined them for use in nature, covering direct operations, upstream, downstream and financed impacts. Draft guidance has also been included on the use of scenario analysis for nature-related issues.
The final draft also draws on other relevant standards including the International Sustainability Standards Board (ISSB) and the Global Reporting Initiative (GRI), both of which were knowledge partners to the TNFD.