The TNFD has unveiled its final recommendations for reporting on nature and biodiversity-linked risks and opportunities.
These recommendations are aimed at promoting better-informed decisions by enterprises and capital providers regarding nature and biodiversity impacts, risks, dependencies, and opportunities. Furthermore, the guidelines aim to channel financial resources towards outcomes that favour nature and to fulfil worldwide objectives related to preserving ecosystems and biodiversity.
This fresh framework signifies a considerable advancement in corporate sustainability reporting. TNFD’s guidelines are expected to guide the creation of forthcoming sustainability disclosure norms. The International Sustainability Standards Board (ISSB) of the IFRS Foundation, which recently introduced its noteworthy sustainability and climate reporting norms, disclosed its intention to use TNFD’s recommendations for future standard-making. Moreover, CDP, an environmental disclosure platform, conveyed its intention to harmonise its worldwide disclosure platform with the TNFD framework.
David Craig, Co-Chair of the TNFD and founder and former CEO of Refinitiv, labelled the recommendations’ release as a remarkable shift enabling enterprises and the financial sector to consistently report their nature-related exposures in line with climate reporting. David Craig elucidated, “Nature loss is accelerating, and businesses today are inadequately accounting for nature-related dependencies, impacts, risks and opportunities. Nature-risk is sitting in company cash flows and capital portfolios today. The costs of inaction are mounting quickly. Businesses and financial institutions now have the tools they need to take action.”
Originating in June 2021, the TNFD’s journey spans two years, inspired by the success of the Task Force on Climate-related Financial Disclosures (TCFD). Spearheaded by a 40-member taskforce, comprising top-level executives from diverse sectors such as Financial Services, Corporates, and Market Service Providers, the TNFD represents over US$20tn in managed assets.
The published content encompasses 14 disclosure recommendations, grouped under TCFD’s 4 contextual pillars: Governance, Strategy, Risk and impact management, and Metrics and targets.
Besides the disclosure recommendations, TNFD has introduced recommended indicators, metrics, and a comprehensive guide to assist organisations in starting with the TNFD guidelines and understanding nature-related subjects.
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