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Weekly Short
22 September, 2023
After much anticipation, the final recommendations for the Taskforce on Nature-related Financial Disclosures (TNFD) have been released this week, after a period of consultation on the draft. TNFD responds to the urgent need for businesses and financial institutions to address biodiversity loss and ecosystem degradation. It recognises that nature is a valuable, finite resource which we are entirely dependent upon. Six of our nine planetary boundaries have already been surpassed, so business as usual is not an option.
Much like the Taskforce on Climate-related Financial Disclosures (TCFD), TNFD’s partner in crime which focuses on climate impacts and dependencies, TNFD aims to enhance transparency and understanding of nature-related risks and opportunities. It provides a consistent framework for businesses and financial institutions to measure, assess and disclose their dependencies and impacts on nature, incorporating issues such as biodiversity, land use, and water use. TNFD is based on the same four pillars as TCFD (governance, strategy, risk and impact management, and metrics and targets) and seven of the disclosures are identical to those required by TCFD. By using the two frameworks together, organisations can think holistically and consider both climate and nature in their strategic decision making.
For now, TNFD is not a mandatory reporting requirement. Countries will need to adopt it into law before companies are required to use it for reporting. However, by implementing TNFD’s framework, organisations can better assess their exposure to nature-related risks such as supply chain disruptions caused by biodiversity loss or regulatory changes related to environmental protection. Simultaneously, it allows organisations to identify opportunities for innovation and investment in nature-positive solutions. So, if you want to contribute to a sustainable future which values nature, with more informed decision-making and greater accountability, what are you waiting for?
If you are looking for support with incorporating nature into your sustainability strategy, get in touch with us, and watch this space for more nature-related updates.
By Charlotte Pounder