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TNFD Releases Final Recommendations

Does the action taken by the Taskforce on Nature Financial Disclosures (TNFD) mark a major step forward in transparency and business action on nature-related risks, with the potential to drive a systemic shift?

Emily McKenzie, Technical Director at the Taskforce on Nature-Related Financial Disclosures (TNFD), speaking at the Nature Positive Hub during NYC Climate Week 2023. Photo: Basil Childers / Better Worlds

It's up for debate. Rainforest Action Network released a preemptive response, the latest in a series, with a skeptical statement questioning corporate involvement on the Taskforce. Civil society organizations and networks – across the world  370 groups across 85+ countries on six continents) stated that the TNFD is made up of 40 corporations and the recommendations could facilitate greenwashing.

After two years of development, the TNFD framework gives guidelines for 14 recommended disclosures grouped into four pillars: governance, strategy, risk management, and metrics & targets. The group released it highly anticipated reporting framework this week as thousands gather in NYC for Climate Week and the United Nations General Assembly. The goal is to compel companies to fully assess and respond to nature-related risks. The disclosures are meant to push companies to evaluate impacts across their value chain, set science-based targets, and properly integrate nature into business strategies and financial planning.

The framework itself provides guidelines for disclosing those risks, impacts and dependencies related to nature.

RAN stated that “TNFD is an initiative headed by a taskforce of 40 senior executives from global corporations including several with highly problematic environmental records – such as BlackRock, Bank of America and HSBC. While the TNFD is led by business, it is endorsed by various actors on the international stage, including U.N. agencies and the G7. TNFD is developing a framework that outlines what information a company or financial institution should self-report regarding how its relationship with nature and biodiversity has, or will, impact its business.”

Key Takeaways Based on the Report “Getting started with adoption of the TNFD recommendations:

  • There is no one-size-fits-all approach to TNFD adoption - each organization will have its own path based on priorities, capacity, and business model.
  • Organizations should take key steps like building foundational knowledge on nature, making the internal business case, and leveraging existing initiatives as a starting point.
  • When disclosing, organizations should start with a limited scope, then communicate plans to progressively expand coverage over time as skills, data, and practices mature.
  • Practical considerations apply across the four disclosure pillars of governance, strategy, risk management, and metrics/targets - including identifying appropriate governance processes, metrics, targets, risk assessment methods, and data limitations.
  • Tools like scenario analysis, science-based targets, and stakeholder engagement can support implementation. Ongoing monitoring and evaluation of progress is advised.
  • Reporting organizations should draw on TNFD materials like the Recommendations, Additional Guidance, Tools Catalogue, In a Box starter kit, and Knowledge Hub.
  • The goal is to build capacity and ambition to assess, manage and disclose nature-related risks, impacts and dependencies, as nature moves into the mainstream alongside climate.
  • Early disclosures will support organizations in preparing for emerging nature-related regulations and meeting investor demand for action on nature-related risks.

On the other hand, in its Sept. 13 letter, RAN lists the things that TNFD would not recommend, which will be something to watch.

  • Companies disclose and list complaints they face about their biodiversity and human rights practices – or even complaints that their biodiversity reporting is misleading. TNFD may recommend companies report on if they have a grievance mechanism – but not what the actual grievances are.
  • Reporting that allows local communities to know if a company is operating in, sourcing from or financing activities in their local area. Instead, it will recommend ‘biome’ or ‘ecosystem’ level location reporting, which can span countries.
  • Companies report if they are lobbying against stronger laws that would see biodiversity harms become a genuine risk to businesses.
  • That all companies report their actual impacts on biodiversity – instead it will let companies decide whether they think trashing nature is ‘material’ or not. Among other issues, this will contribute to data that is chaotic, non-standardised and non-comparable. Even where companies do report on impacts, there’s no standardized methodology or data verification.
  • Forms of reporting that allow data to be scrutinized, public and independently verified. What we can expect is high-level aggregated figures which cannot be checked against on the ground realities.

Kimberly Marsh



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