Major financial institutions, corporates and governments endorse launch of Taskforce on Nature-related Financial Disclosures

• New market-led global initiative aims to provide financial institutions and corporates with a complete picture of their environmental risks and opportunities.
• Two Co-Chairs announced to lead the Taskforce: David Craig, CEO of Refinitiv and Group Leader of Data & Analytics Division at London Stock Exchange Group (LSEG), and Elizabeth Maruma Mrema, Executive Secretary of the UN Convention on Biological Diversity (CBD).
• Taskforce commits to delivering a framework by 2023 for organisations to report and act on evolving nature-related risks, to support a shift in global financial flows away from nature-negative outcomes and toward nature-positive outcomes.

Major financial institutions and multinational corporates have endorsed the launch of a new market-led Taskforce on Nature-related Financial Disclosures (TNFD), which will support business in assessing emerging nature-related risks and opportunities.

More than half of the world’s economic output – US$44tn of economic value generation – is moderately or highly dependent on nature. The recorded extinction of 83% of wild mammals and 50% of plants therefore represents significant risk to corporate and financial stability. Action for nature-positive transitions could generate up to US$10.1 trillion in annual business value and create 395 million jobs by 2030.

A report titled ‘Nature in Scope’, published today, describes how the initiative will deliver a framework for organisations to report and act on evolving nature-related risks, in order to support a shift in global financial flows away from nature-negative outcomes and towards nature-positive outcomes. A complementary report also sets out the proposed technical scope for the TNFD.

Through an inclusive approach, the initiative aims to consult with a variety of stakeholders from all regions – to develop and build on voluntary, consistent disclosures to help corporates, investors, lenders and insurance underwriters manage nature-related risks, such as new legal liabilities and systemic loss of soil fertility.

In its first year, the TNFD aims to build upon the success of the Task Force on Climate-related Financial Disclosures (TCFD), which has become instrumental in mainstreaming the issue of climate-related financial risks. The TNFD’s framework for nature-related risks will complement the TCFD’s climate-related framework, to give companies and financial institutions a complete picture of their environmental risks. Through its framework, the TNFD will support organisations to report and act on both their nature-related risks. The framework will be tested and refined in 2022 before its launch and dissemination in 2023.

“If we do not change the movement of money, we will finance ourselves into extinction. The TNFD framework presents a massive opportunity for the finance sector and corporate sector to work together to better understand their nature-related risks and opportunities. The crash in biodiversity worldwide leaves our economy on the brink of a precipice, compounded by the invisibility of the value of nature in data used to make financial decisions by investors, lenders and insurers. It is my hope that by 2023 the TNFD will offer a revolutionary framework to help redirect the world’s financial flows towards a nature-positive economy.”

Andrew Mitchell, Founder and Senior Advisor to Global Canopy

The initiative to bring together a Taskforce on Nature-related Financial Disclosures was first announced in July 2020. Kicking off its work in September 2020, an Informal Working Group, comprised of 74 Members across 24 countries – including financial institutions, corporates, governments, regulators, multilaterals, NGOs and consortiums – have worked to propose practical recommendations for the scope and workplan of the TNFD, which is released today. This informal group was ably co-chaired by market-leaders: Banorte, BNP Paribas and the Green Finance Institute.

Following the completion of this preparatory phase, two Co-Chairs of the TNFD have been announced: David Craig, CEO of Refinitiv and Group Leader of Data & Analytics Division at London Stock Exchange Group (LSEG), and Elizabeth Maruma Mrema, Executive Secretary of the United Nations Convention on Biological Diversity (CBD).

The Taskforce will consist of approximately 30 members, with an equal representation of financial institutions, corporates and data/service providers from developed and emerging markets. It will be informed by a diverse Stakeholder Group.

“For far too long, global markets and finance have been in a self-destructive relationship with nature – with far-reaching consequences for us all. Standardised and substantive data on nature-related risks are now urgently needed to help drive the seismic shift from nature-negative to nature-positive finance.
So I’m delighted, and hopeful, as I join with the many other partners and allies behind this initiative, to welcome the launch of the official Taskforce for Nature-related Financial Disclosures. Under the leadership of its remarkable new Co-Chairs, the TNFD can begin in earnest to create the framework so needed for corporates and financial institutions worldwide to transparently identify, report and act on nature-related risks.”

Niki Mardas, Executive Director, Global Canopy

Register now for the official virtual launch event for the Taskforce on Nature-related Financial Disclosures (TNFD) on Thursday, 10 June at 9.30 (EDT) / 14.30 (BST) / 15.30 (CET) / 21.30 (SGT). The Co-Chairs will share their vision for the TNFD along with an influential panel of market leaders: including AXA’s Ulrike Decoene, BlackRock’s Michelle Edkins, WWF’s Pavan Sukhdev, WBCSD’s Sunny Verghese, and International Institute of Green Finance’s Yao Wang.

Find more endorsements of the Taskforce on the TNFD website.

The Global Environment Facility is an anchor investor of the TNFD.

Photo credit: Jonathan Glynn Smith