Today, 39 leading banks, investors and companies have joined the UK, French, Peruvian and Swiss governments in backing the creation of a task force in 2021
Why is a Task Force needed?
Momentum for a Task Force on Nature-related Financial Disclosures (TNFD) has been building over the last year, as financial institutions have become increasingly aware of the financial risks associated with nature loss and the opportunities associated with tackling them.
Nature-related financial risks are on the rise, as efforts to preserve forests, oceans, plants and animals are falling short: the latest Global Biodiversity Outlook, released by the UN a few weeks ago, announced that none of the 20 biodiversity targets the world set for itself a decade ago will be fully met by the 2020 deadline.
With data gaps singled out as a key barrier to finance sector management of nature-related risks, the case for a TNFD is now clear.
What does a TNFD aim to achieve?
Ultimately aiming to facilitate a shift in finance from nature-negative to nature-positive, the TNFD will develop an international reporting standard for nature-related risks. It will also build awareness and capacity across financial institutions and regulators.
What is the Informal Working Group and who are its members?
The Informal Working Group (IWG) comprises 62 members, including:
- 34 financial institutions from across five continents including Storebrand, First Rand, NatWest, Citi, BNP Paribas, AXA, Rabobank, Credit Suisse, Banorte, Manulife Investment Management, PIMCO, DBS Bank, Sumitomo Mitsui Trust Asset Management and YES BANK.
- 5 companies including BP, GlaxoSmithKline, Ernst and Young, KPMG and EcoAdvisors
- The UK, French, Swiss and Peruvian governments, as well as the OECD, World Business Council for Sustainable Development (WBCSD), World Economic Forum (WEF), the World Bank and many others. (See the full list.)
The IWG will be supported by a Technical Expert Group (TEG). Designed to support the working group, the TEG will be made up of individuals with a wide range of expertise, including financial risk analysis, particularly with respect to climate and environmental risks; large scale data management, standardisation and verification; biodiversity impacts and dependencies and natural capital frameworks; and international agreements and processes.
Finally, an Observer Group will allow for a broader group of organisations to closely follow the activities of the IWG and enable them to comment on the IWG deliberations.
The initiative to bring together a TNFD is being catalysed by Global Canopy, UN Development Programme (UNDP), UN Environment Programme Finance Initiative (UNEP FI) and WWF.
What are the next steps?
The 62 members that make up the IWG will establish a detailed two-year work plan for the Task Force, which is planned to launch in 2021. Nature-related risk is a huge topic to tackle, and the IWG will set out targeted objectives and a clear scope for the TNFD.
Following a kick-off meeting on 10 September, the IWG will now meet on a monthly basis until the launch of the Task Force itself, which is expected in H1 2021.
Once launched, the Task Force will go through three phases. First, create a draft reporting framework. Second, test and refine that framework. Third, consult with financial institutions, companies and regulators. The work of the TNFD will culminate with the launch and dissemination of a final reporting framework.
For more details on our efforts to bring together a TNFD, check out the ‘Bringing Together a TNFD’ website.
Image: Toby Yang, Unsplash