25 Sep TNFD: The finance sector unified global response to nature loss
A total of 39 financial institutions and private firms, 17 think tanks and 6 governments have formed an Informal Working Group (IWG) to establish a Task Force on Nature-related Financial Disclosures (TNFD).
The new TNFD is inspired by the lessons learned in the Task Force on Climate-related Disclosure (TFCD), and led by a coalition integrated by Global Canopy, the United Nations Development Program (UNDP), the Finance Initiative of the UN Environment Program (UNEP FI) and WWF. It has been created with the aim of create resilience in the global economy by redirecting flows of finance at scale towards nature-positive activities to allow nature and people flourish.
The initiative is supported by financial institutions such as AXA, BNP Paribas, DBS Bank, Rabobank, First Rand, Yes Bank, Storebrand, as well as the governments of the United Kingdom, France, the Netherlands and Switzerland. Ecoacsa is among the additional stakehokders that have come together to create the Informal Working Group (IWG) with the objective of scoping the mandate and governance of the TNFD.
Why a TNFD?
Nature cannot wait, while we devote efforts to solve the climate crisis. Despite their material influence on society and economies, nature-related risks and impacts are rarely measured or disclosed, and are largely excluded from corporate and financial decision-making, regulation and supervision.
The eventual outcome of the TFND is to make these risks and impacts visible and to increase the resilience of the global economy by reducing flows of finance that are negative for nature and people. At the same time, it seeks to increase funding that are positive, in alignement with the Paris Agreement, the Post2020 Biodiversity Goals and the Sustainable Development Goals.
In order to avoid risks and find new opportunities, members of the IWG will work over the next two years to solve the reporting needs, metrics and data of financial institutions, so that they can better understand their risks, dependencies and impacts on nature.
Throughout this period, it will be necessary for us to examine both the financial dependencies, impacts, transition and physical risks, not just on climate, but on nature´s assets and the ecosystem services provided to the business sector they invest in or lend to, which lost at scale could destabilise the economy.
Launch of the TNFD is planned for early 2021 and will be tasked with devivering a framework to guide nature-related financial disclosure by the end of 2022. Until then, the IWG is already scoping the mandate and governance to ensure that the initiative contributes to avoiding the systemic risk and instability for markets and the financial system at global scale that are already affecting countries, companies and financial institutions around the world experiencing the consequences of the dramatic loss of nature and biodiversity.
An informal Technical Expert Group will server at the direction of IWG to support the process and ensure a collaborative approach with other relevant initiatives. The TNFD partners are engaging with the Banks and Supervisors Network for Greening the Financial System (NGFS); the OECD and Multi Stakeholder Group on Business, Finance and Biodiversity, as well as the Natural Capital Coalition, Business for Nature and other organizations.