The first draft of recommendations from the Taskforce on Nature-related Financial Disclosures (TNFD) outlines an approach to ecological risk largely aligned with that of the Task Force on Climate-related Financial Disclosures (TCFD). The TNFD was modelled after the TCFD, but with a focus on biodiversity and nature-related financial risk. This is its first major report and is being released as part of a wide consultation exercise with a dedicated online portal.
Launched in June, 2021 and overseen by a council of governments and civil society organisations, the TNFD consists of 34 senior executives from financial institutions, corporates and market service providers. It is tasked with developing a risk management and disclosure framework for organisations to report and act on biodiversity and other nature-related risks, and describes itself as “market-led, science-based and government-endorsed”.
The beta version of the TNFD framework includes three core components: foundational guidance, including key science-based concepts and definitions; disclosure recommendations aligned with TCFD climate-related guidance; and practical guidance on nature-related risk and opportunity analysis for companies and financial institutions.
Nature-related risk analysis is organised around a four-step process called Leap, an acronym for:
- locate your interface with nature;
- evaluate your dependencies and impacts;
- assess your risks and opportunities;
- prepare to respond to nature-related risks and opportunities, and report.
The TNFD beta framework is also designed for future alignment with the global baseline for international sustainability standards under development by the International Sustainability Standards Board.
A further three iterations of the beta version are planned (June 2022, October 2022 and February 2023), before the final version of the framework is released towards the end of 2023.
“The approach we are taking of developing this guidance with market participants through an iterative, open innovation process over the next 18 months will help to ensure our final recommendations are both science-based and practical to implement,” said TNFD co-chair David Craig. “We invite all market participants and stakeholders to review this first prototype of the framework and share their feedback.”
This page was last updated April 13, 2022
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