‘TNFD provides companies with a means to reverse biodiversity loss’
'TNFD provides companies with a means to reverse biodiversity loss' FT Adviser
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The Business Case for Nature-related Financial Disclosures
The new Taskforce on Nature-related Financial Disclosures, the recommendations of which launched at Climate Week NYC, is a risk management and disclosure framework for business and financial institutions designed to focus funding towards mitigating nature-related risks and restoring damaged ecosystems, but what is the business case and how can investment be realised?
Every business relies on nature, with more than half of the world’s gross domestic product being highly or moderately dependent. More than three years ago, World Economic Forum managing director Dominic Waughray warned that “damage to nature from economic activity can no longer be considered an ‘externality’ [when] exposure to nature loss is both material to all business sectors and is an urgent risk to our collective future economic security”.
With the business case being that humanity must save nature to save itself, we are seeing biodiversity becoming a mainstream issue for corporate risk management.
Realising the nature of these risks — which include increased occurrence of zoonotic diseases, reduced crop yields, growing water stress, and more extreme climate-related disasters — led to nearly 200 nations signing the Kunming-Montreal Global Biodiversity Framework to facilitate national policies and collective action on reversing biodiversity loss by 2030 and enabling the recovery of all ecosystems by 2050.
In particular, GBF Target 15, gave the signal to large transnational companies and financial institutions to regularly monitor, assess and transparently disclose impacts and dependencies on biodiversity associated with their operations, supply chains and portfolios.
Disclosure on Nature
An international agreement that provides the vision and sets targets is an important element of the global response to the biodiversity crisis. However, in the case of Target 15, it also needs to be backed up by financial resources and collective action led by businesses and financial institutions.
The launch of the new TNFD framework provides these organisations with a means to reverse biodiversity loss, and for investors to more easily take advantage of the opportunities to invest in biodiversity and achieve global targets.
Building upon its climate-related disclosure predecessor the Task Force on Climate-related Financial Disclosures, the TNFD is a global, market-led initiative, represented by financial institutions with more than $20tn (£16.4tn) in assets providing familiarity and continuity to business sustainability. And, as TCFD is becoming mandatory, then TNFD may well follow.
Measuring biodiversity is complex, requiring location-specific evidence using metrics for genes, species and whole ecosystems to describe their abundance, condition, interconnectedness and functional role
However, at least two substantial differences stand out when comparing the TCFD and TNFD. The first is that, unlike kilotons of carbon emissions, biodiversity cannot be measured using a single global metric.
SDGs, Targets, and Indicators
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SDG 15: Life on Land
- Target 15.9: By 2020, integrate ecosystem and biodiversity values into national and local planning, development processes, poverty reduction strategies, and accounts.
- Indicator: The article mentions the Kunming-Montreal Global Biodiversity Framework, which aims to facilitate national policies and collective action on reversing biodiversity loss by 2030 and enabling the recovery of all ecosystems by 2050.
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SDG 13: Climate Action
- Target 13.2: Integrate climate change measures into national policies, strategies, and planning.
- Indicator: The article mentions the Task Force on Climate-related Financial Disclosures (TCFD), which is a predecessor to the Taskforce on Nature-related Financial Disclosures (TNFD). The TNFD is a global, market-led initiative represented by financial institutions with more than $20tn in assets, providing familiarity and continuity to business sustainability.
| SDGs | Targets | Indicators |
|---|---|---|
| SDG 15: Life on Land | Target 15.9: By 2020, integrate ecosystem and biodiversity values into national and local planning, development processes, poverty reduction strategies, and accounts. | The article mentions the Kunming-Montreal Global Biodiversity Framework, which aims to facilitate national policies and collective action on reversing biodiversity loss by 2030 and enabling the recovery of all ecosystems by 2050. |
| SDG 13: Climate Action | Target 13.2: Integrate climate change measures into national policies, strategies, and planning. | The article mentions the Task Force on Climate-related Financial Disclosures (TCFD), which is a predecessor to the Taskforce on Nature-related Financial Disclosures (TNFD). The TNFD is a global, market-led initiative represented by financial institutions with more than $20tn in assets, providing familiarity and continuity to business sustainability. |
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Source: ftadviser.com
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