With the explicit support of the G7 Finance Ministers and Central Bank Governors1 as well as many endorsements by major corporations and financial institutions, the UN-sponsored and market-led Task Force on Nature-related Financial Disclosures (TNFD) will officially launch on June 10, 2021.
The TNFD was first announced in July 2020 by the four founding partners of the initiative bringing together the TNFD—Global Canopy, the United Nations Development Program (UNDP), the United Nations Environment Program’s Finance Initiative (UNEP FI) and the World Wildlife Foundation.
Contemporaneously with the launch, the TNFD is releasing the related Nature in Scope report, which details the TNFD’s ambition to deliver a new framework for organizations to report and act upon evolving nature-related risks and opportunities, as well as a Proposed Technical Scope document, reflecting the efforts of an informal working group and an informal technical consulting group.
While the TNFD acknowledges (and hopes to build on) the success of the Task Force on Climate-related Financial Disclosures (TCFD), TNFD’s two recently appointed co-chairs also acknowledge the unique challenges that the TNFD faces by stating:
[T]he new nature-focused Taskforce faces unique challenges: when it comes to data, metrics and methodologies, there are critical differences between climate and nature.
Measuring and disclosing nature-related risks is an even more complex challenge than it is for climate-related risks. A key challenge is that, unlike for climate, it is not just what your activities are, but where they are, which matters, which means having more location-specific data from corporates will be part of the solution.
Improving corporate disclosures will also only be one of many levers to close the data gap on nature-related financial risks. In the climate space, better corporate disclosures were at the centre of the solution to the data challenge. Satellite data may also play a significant role in closing data gaps on nature-related risks.
1 Described in our June 7, 2021, Perspective “G7 Commits to Multi-Year Effort to Support Net-Zero Global Economy and to Move to Mandatory Climate Risk Reporting.“