Over 100 financial institutions have committed today to start reporting in accordance with the Taskforce on Nature-related Financial Disclosures (TNFD).
The early adopters, announced at the World Economic Forum, include Schroders, Robeco, Nomura Asset Management, Mirova, Fidelity International, Federated Hermes, Candriam, Norges Bank Investment Management (NBIM), KLP, as well as Swedish pension funds AP2 and AP7.
Overall, 320 organisations from over 46 countries representing $14trn in assets under management, have committed to start making nature-related disclosures based on the 14 TNFD recommendations published last September.
This will form part of their annual corporate reporting for the financial years of 2023, 2024 and 2025.
The recommendations encompass guidelines for revealing nature-related impacts, risks, and dependencies throughout the entire value chain.
Similar to the framework presented by the Taskforce on Climate-Related Financial Disclosures (TCFD), they involve assessing risk in a range of future scenarios.
The aim is to mitigate the industrial impact on nature by encouraging comprehensive reporting on businesses’ environmental footprint and properly integrating nature-related considerations in their strategies.
“Twelve months ago the world came together to agree to the Global Biodiversity Framework to halt and reverse nature loss, including a specific target on corporate reporting,” said TNFD’s co-chair and deputy executive director of the UN Environment Programme, Elizabeth Mrema.
She added, “The release of the TNFD recommendations in September last year provided the tools to do that and today we have seen the market commit to start taking action”.
Tony Goldner, executive director of the TNFD, noted, “It doesn’t mean that they’re going to do all 14 of our recommended disclosures in the first year.”
He said the situation will be simliar to the TCFD. “The average number of disclosures in the first year of TCFD was around 1.4 or 1.6 out of 11, so – as we’ve seen with climate reporting – companies will get started and will increase their disclosures over time,” he added.
Goldner acknowledged challenges around data availability, but said that during pilot tests, entities were “surprised by how much data they already had available to them, or could readily get access to. Half of our recommendations are qualitative in nature – they don’t require quantitative data.”
TNFD is working with the EU’s sustainability-related reporting body, European Financial Reporting Advisory Group (EFRAG), to map the relationship between different nature-related standards being developed, including the European Sustainability Reporting Standards.
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