Today, at the World Economic Forum in Davos, Switzerland, the Taskforce on Nature-related Financial Disclosures (TNFD) announced three initiatives to expand consultation with market participants and other stakeholders on the design and development of the TNFD’s recommendations on nature-related risk and opportunity management.
The TNFD framework, now in prototype format, will enable corporates and financial institutions to assess and disclose on their nature-related risks and opportunities, with the ultimate aim of helping to shift financial flows from nature-negative to nature-positive outcomes. Final recommendations from the Taskforce are due in September 2023.
Efforts to develop the TNFD’s nature-risk framework are led by 34 individual Taskforce Members, representing financial institutions, businesses and market service providers, and supported by over 400 institutions around the world who constitute the TNFD Forum. A first ‘beta’ framework was released in March 2022 with input now being received from a wide range of market participants and other stakeholders from over 60 countries through a market-led, open innovation process to co-create the final recommendations.
The TNFD framework is also attracting considerable interest from policy makers and regulators as efforts accelerate within a number of jurisdictions towards integrated sustainability reporting requirements.
TNFD Consultation Groups
TNFD Consultation Groups are being activated at a national or regional level to expand outreach and engagement in markets where significant interest in the work of the Taskforce has already been established. Consultation Groups are market-led, with a convening organisation from the private sector bringing together business, finance, public sector and civil society organisations to discuss nature-related business and finance issues and the future adoption of the global TNFD framework.
The initial six Consultation Groups are:
- Australia and New Zealand, convened by the Responsible Investment Association Australasia (RIAA)
- India, convened by the Confederation of Indian Industry (CII)
- Japan, convened by TNFD Taskforce member MS&AD Insurance Group Holdings
- Netherlands, convened by TNFD Taskforce Member Rabobank and the Dutch Banking Association
- Switzerland, convened by TNFD Taskforce Member UBS on an interim basis
- United Kingdom, convened by the Green Finance Institute (GFI).
Participation in consultation groups is open to all institutional members of the TNFD Forum from that jurisdiction. Additional Consultation Groups are expected to be announced throughout 2022 and 2023 based on demand and interest from market participants.
Pilot Testing of the TNFD beta framework
FSD Africa through the African Natural Capital Alliance (ANCA), Global Canopy, UNEP-FI, and the World Business Council for Sustainable Development (WBCSD) have also been confirmed as the first of the TNFD’s piloting program partners. They will each run a portfolio of pilot tests with companies and financial institutions of the ‘beta’ framework over the next 12 months. With their support, the TNFD will pilot test all aspects of its beta framework with a diverse range of companies and financial institutions across geographies and sectors to inform the iterative development of the TNFD’s recommendations. These initial four pilot testing partners will leverage their existing networks of market participants to pilot specific elements of the framework.
Outside of these partner programs, interested individual business and financial institutions of all sizes are also able to pilot test the framework using the TNFD’s interactive online platform for the beta framework at: framework.tnfd.global. The TNFD is also exploring additional initiatives to encourage pilot testing in biodiversity hotspots in emerging markets and with Indigenous community enterprises and other stakeholders.
The window for pilot testing and feedback from market participants and other stakeholders is open until 31 May 2023.
Indigenous Peoples and Local Communities engagement
TNFD is partnering with the International Union for Conservation of Nature (IUCN) to engage with Indigenous Peoples and Local Communities (IPLCs). Leveraging IUCN’s global networks and relationships with IPLCs, over the next 12 months, this inclusive and participatory consultation process will ensure the voices and perspectives of IPLCs from around the globe are incorporated into the design and development phase of the TNFD Framework.
Indigenous Peoples and Local communities steward much of the world’s natural resources and play a vital role in safeguarding nature. Their communities are also highly dependent on nature for their livelihoods and Indigenous-led enterprises are often pioneers in sustainable business models.
David Craig and Elizabeth Mrema, Co-Chairs, TNFD, stated: “There is an urgent need and huge opportunity to mobilise the innovative power of finance and business to move quickly from developing one-dimensional solutions to three-dimensional solutions that address climate, nature, and social dimensions as a bundle. The TNFD is working closely with a range of other risk management and disclosure initiatives to contribute to the development of the global baseline of integrated sustainability reporting requirements that market participants are looking for.
A strong and inclusive consultation process on nature-related risk management and reporting is fundamental to our success. Crowding in insights from a wide range of market players and stakeholders across different sectors and geographies will help the Taskforce deliver a practical framework that has been co-created by both those who will use it as well as those that will feel the impact the most.”
The first (v0.1) beta version of the framework was released in March 2022. A further three releases of the beta framework that incorporate feedback from market participants and additional framework components are planned for June 2022 (v0.2), October 2022 (v0.3) and February 2023 (v0.4). This will culminate in the final release of the TNFD’s recommendations (v1.0) in September 2023.