Businesses adopt Taskforce on Nature-related Financial Disclosures’ recommendations

17 Jan Businesses adopt Taskforce on Nature-related Financial Disclosures’ recommendations

Over 300 businesses have indicated plans to adopt the recommendations of the Taskforce on Nature-related Financial Disclosures (TNFD) in a significant step to strengthen corporate disclosures on nature-related risks and impacts.

At the recent World Economic Forum meeting, the TNFD confirmed that over 320 organisations spanning multiple industries and countries have aligned with the disclosure framework. The TNFD recommendations will mitigate the impact on nature by supporting detailed reporting on the environmental footprint of businesses and structurally adopting nature-focused considerations within their plans. As a consequence, these measures provide investors with better access to more reliable and accurate data.

Collectively, the businesses represent 46 nations and $4 trillion in market capitalisation. Over 100 financial institutions have signed an agreement, representing $14 trillion in Assets Under Management (AUM), as well as banks, insurance firms and other market leaders.
Companies committed to adopting the recommendations include the likes of the Bank of America, BBC, Ikea, OVO, PwC, Sony and Veolia. The organisations have stated that they will begin adopting TNFD recommendations and publish disclosures in their annual corporate reports for 2023, 2024 and 2025.

Elizabeth Mrema, the co-chair of TNFD and deputy executive director of the UN Environment Programme, explains that a year has passed since the world came together to agree on the Global Biodiversity Framework to end and reverse nature loss, including a definitive target on corporate reporting. Mrema explains that the TNFD recommendations released last year included the necessary tools to achieve these, and the market is showing clear signs of taking action.

After a few years of design and development, the TNF announced its 14 recommendations and a supporting guide at Climate Week last year. The set of measures incorporates guidelines for disclosing nature-related impacts, the risks and the dependencies throughout the entire value chain. Taking a similar approach to the framework delivered by the Taskforce on Climate-Related Financial Disclosures (TCFD), these measures include measuring risk in some potential scenarios.

By aligning with the TNFD disclosure requirements, businesses will generate information in a structured manner for all associated stakeholders. Before the recent announcement, several organisations, including Natura&Co, have been testing TNFD adoption via their beta versions. Not only will businesses be encouraged to measure impacts, but the framework should also support them to deliver science-based targets and embed nature-related plans within their strategies.

The framework also includes other relevant standards, such as the International Sustainability Standards Board (ISSB) and the Global Reporting Initiative (GRI), which were knowledge partners to the TNFD.