Pilot partners sign up to test Taskforce on Nature-related Financial Disclosures’ beta framework
At the World Economic Forum in Davos, the Taskforce on Nature-related Financial Disclosures (TNFD) has announced three expansion initiatives that will feedback into an overall aim of creating a framework for companies to examine and act upon their environmental risks in relation to nature.
The TNFD has unveiled three initiatives to assist with the consultation process of its current “beta” framework that was launched earlier in the year. This includes confirmation of the first set of partners that will pilot the framework.
The TNFD has this week confirmed the formation of “consultation groups” of various national and regional level organisations to help increase engagement with the framework. Nations involved in these groups include Australia, India, the Netherlands and the UK.
Additionally, the TNFD is partnering with the International Union for Conservation of Nature (IUCN) to engage with Indigenous Peoples and Local Communities (IPLCs). Over the next 12 months, these organisations will inform the framework development of potential impacts and considerations that nature will have on these voices and communities.
Research has found that improving nature protection and restoration could generate up to $10.1trn in annual business value and create 395 million jobs by 2030.
The TNFD’s co-chairs David Craig and Elizabeth Mrema stated: “There is an urgent need and huge opportunity to mobilise the innovative power of finance and business to move quickly from developing one-dimensional solutions to three-dimensional solutions that address climate, nature, and social dimensions as a bundle. The TNFD is working closely with a range of other risk management and disclosure initiatives to contribute to the development of the global baseline of integrated sustainability reporting requirements that market participants are looking for.
“A strong and inclusive consultation process on nature-related risk management and reporting is fundamental to our success. Crowding in insights from a wide range of market players and stakeholders across different sectors and geographies will help the Taskforce deliver a practical framework that has been co-created by both those who will use it as well as those that will feel the impact the most.”
In March this year, the Taskforce on Nature-related Financial Disclosures (TNFD) unveiled the first beta version of its framework to help corporates outline and disclose nature-related risks and impacts in alignment with corporate reporting.
The framework, which will be modified over the next 18 months, currently consists of three main components. It outlines key science-based concepts and definitions to help corporates and stakeholders define nature-based risks and opportunities. It also outlines disclosure recommendations that are in alignment with the TCFD reporting framework and offers practice guidance on how nature can be incorporated into enterprise risk and portfolio management processes.
The prototype beta will be tweaked, with future iterations to be released in June, October and February. The finalised framework is earmarked for release in late 2023.
FSD Africa through the African Natural Capital Alliance (ANCA), Global Canopy, UNEP-FI, and the World Business Council for Sustainable Development (WBCSD) have this week been confirmed as the first partners to pilot the beta framework. They will each run a portfolio of pilot tests with companies and financial institutions of the framework over the next 12 months.
The TNFD officially launched in June 2021 with an overarching aim to align corporate reporting and financial spending to alleviate nature-related risks.
The aim of the TNFD was to compliment the growth of the Task Force on Climate-related Financial Disclosures (TCFD), which is gaining popularity amongst corporates and financial markets in outlining the economic risks associated with the climate crisis. The TNFD follows a similar pattern; it aims to give companies and financial institutions a complete picture of their environmental risks.
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