On 10th June 2021 the Taskforce on Nature-related Financial Disclosures (TNFD), the biodiversity equivalent of the climate reporting framework TCFD, was launched.
In their report “Into the wild: integrating nature into investment decisions“, WWF France and Axa recommended setting up a “Task force on nature impacts disclosures” to analyze financial risk of biodiversity loss.
4 organizations initially partnered to found the TNFD : the Global Canopy, the United Nations Development Programme (UNDP), the United Nations Environment Programme Finance Initiative (UNEPFI) and the World Wildlife Fund (WWF).
Since September 2020, 8 Regulatory institutions and governments, 17 think-tanks and 49 Financial institutions and private firms, totalling 74 members, among which IIGF was represented by Prof. Wang Yao and Dr. Christoph Nedopil-Wang, formed an Informal Working Group (IWG) in order to prepare the launch of the TNFD.
Starting in June and in collaboration with the business sector, financial institutions, NGOs, think-tanks and governments, the objective of this initiative is to build, by 2023, an international benchmark for all financial actors to analyse and report on their impacts and risks related to biodiversity loss.
Moderated by Lana Wong from the Education Commission, this conference included the introduction of the new co-chair that will oversee the TNFD until the first emission of its recommendations in 2023, as well as a discussion of the objectives and challenges for the TNFD with a panel of experts from different sectors involved in the design of the TNFD.
The following members were present :
TNFD Co-chairs members
- Elizabeth Maruma Mrema, Executive Secretary, United Nations Convention on Biological Diversity
- David Craig, CEO, Refinitiv and group leader of Data & Analytics Division, London Stock Exchange Group
- Sunny Verghese, Co-founder & Group CEO, Olan and Chair, WBCSD
- Michelle Edkins, managing Director, Blackrock
- Pavan Sukhdev, President WWF International
- Yao Wang, Dean, International Institute of Green Finance
- Ulrike Decoene, Chief communication, Brand & sustainability officer, AXA
- Mariuz Calvet, Director, Sustainability & Responsible Investment, Grupo Financiero Banorte
Key take-aways :
The new TNFD co-chairs and the TNFD panel members were invited to discuss about the meaning of the TNFD for their sectors and express their hopes for its future action :
How the TNFD matters
– TNFD will be determining for putting a cost on nature, by helping turn the principles around nature valuation into common language and framework.
– TNFD can help build momentum for the financial sector, including central banks, to understand and act on the impact and transmission links between biodiversity and the financial sector. In fact, the TNFD framework will require organisations to not only disclose how nature is impacting the organisation, positively or negatively, but also how the organisation impacts the natural world
– By building a consistent and useful impact reporting system, the TNFD will help companies measure the risk they encounter during their business activities. Companies will be able to take investing decision in accordance to biodiversity risks and opportunities.
– TNFD work at reaching a common framework and standards for biodiversity goals, measurement and evaluation, data reporting tools and capacity building, will also help policy-makers establish supporting policies for biodiversity conservation.
The call for actions from TNFD members
– TNFD should bring all experts of biodiversity together, from different sectors and areas, in order to create a framework “simple, workable and repeatable” for all stakeholders.
– In order for the TNFD to help tackle the biodiversity crisis, it will need to understand the inherent complexity of the nature that is being measured. The challenges, as well as the opportunities, therefore lie in integrating the externalities in management decisions of the stakeholders.
– Ultimately, TNFD will need to push investments into biodiversity, but also promote the disinvestment from nature-negative sectors, as well as foster solution for companies to preserve biodiversity.
What does it mean for China
As China embraces an “ecological civilisation”, the country is starting to accelerate its green transition, and biodiversity ought to be one of its major concern for the coming years, especially on overseas infrastructure projects of the BRI.
The TNFD work can be essential in helping China positioning itself on the international scene by informing policy-maker on biodiversity finance biases and solutions.
TNFD work on identifying nature-related risks and dependencies that materially affect investment portfolios can help Chinese companies take better investing decisions and accelerate green finance development under biodiversity considerations.
TNFD can also support Chinese financial institutions and companies to monitor nature-related risks in their overseas investments as was recommended by the BRI traffic light system published in December 2020 by the BRIGC.
Finally, as TNFD aims to redirect global finance flows towards positive economic activities, China can drive the closure of the biodiversity finance gap by integrating the TNFD actions and lead private investment toward biodiversity-friendly projects.
The COP 15 biodiversity conference to be hosted by China will be a key test of the country’s ambitions toward biodiversity conservation. In October 2021, delegates from nearly 200 countries hope to meet in the capital of Yunnan province, southwest China, to agree on a new framework to halt biodiversity loss and protect ecosystems. The work accomplished by the IIGF and other institutions through the TNFD will be determining for those countries future commitments toward biodiversity conservation.
Find more on : https://tnfd.info/