Financial institutions endorse UN-backed initiative to create a Task Force on Nature-related Financial Disclosures

AXA, BNP Paribas, DBS Bank, Rabobank, Standard Chartered, Storebrand, Yes Bank and World Bank among ten financial institutions to declare support, along with UK Government, for efforts to create a new reporting mechanism

• Global Canopy, UNDP, UNEP FI and WWF unveil plans to bring together a Task Force for Nature-Related Financial Disclosures (TNFD).
• Already 10 financial institutions*, the World Business Council For Sustainable Development and the UK and Swiss governments have backed the initiative**. The secretariat of the Task Force on Climate-related Financial Disclosures (TCFD) are also supportive.
• The TNFD is expected to launch in Q1 of 2021 to complement the TCFD with a focus on the risks posed by environmental degradation and biodiversity loss.

London, 21 July 2020: The UK and Swiss governments and ten financial institutions are throwing their weight behind efforts to create a Task Force for Nature-related Financial Disclosures (TNFD) by joining an Informal Working Group that will lead to the creation of a TNFD in 2021. Establishing a reporting framework for finance sector impacts and dependencies on nature, to complement the Task Force on Climate-related Financial Disclosures, is seen as critical for halting biodiversity and ecosystem loss.

The initiative is being coordinated by Global Canopy, the United Nations Development Programme (UNDP), the United Nations Environment Programme Finance Initiative (UNEP FI), and the World Wide Fund for Nature (WWF), who are today setting out a plan to bring together a Task Force by Q1 of next year, starting with the formation of a working group in Q3 of this year. This is set out on a new ‘Bringing Together a TNFD’ website.

So far, ten financial institutions, from around the world, have signed up to join the working group (see Notes to Editors). UK environment minister Zac Goldsmith will today endorse the initiative, which is funded by the UK government and driven by the Department for Environment, Food and Rural Affairs (Defra), at a Finance for Nature virtual summit taking place today (Tuesday 21st).

International Environment Minister Lord Goldsmith said:

“The rapid loss of nature to our economy poses large, unprecedented risks for the finance sector. That is why I am extremely pleased that efforts to bring together a Task Force on Nature-related Financial Disclosures, which the UK Government fully supports, are gathering pace. 

“The new Task Force will complement the reporting recommendations that already exist for climate-related risks, to give investors, lenders and insurers a complete picture of their environmental risks.”

Gwen Yu, Head of Engagement Transformation at BNP Paribas, said:

“Biodiversity loss is an increasing emergency for both humans and our planet. To effectively tackle this emergency we must take significant steps now to make the materiality of nature-related risks not just more visible but also quantifiable for business and finance”.

Emine Isciel, Head of Climate and Environment at Norwegian financial service provider, Storebrand Asset Management, said:

“It is vital that we have a process like TNFD to resolve the reporting, metrics, and data needs of financial institutions that will enable them to better understand their risks, dependencies and impacts on nature.”

It is estimated that ecosystem services provide an estimated USD 125-140 trillion annually in global benefits, over 1.5 times global GDP. The deterioration of nature, and society’s response to this therefore creates large and material risks for financial institutions. It is vital that financial institutions assess, manage and mitigate nature related risk within their portfolios.

Andrew Mitchell, Founder & Senior Advisor to Global Canopy, stated:

“If we don’t change the movement of money, we will finance ourselves into extinction. That is why we need a TNFD. I am delighted that leaders within the financial sector are buying into this, by joining the Informal Working Group.”

Midori Paxton, Head of Ecosystems and Biodiversity at UNDP, said:

“In the face of COVID-19, the threat to nature has been amplified for many. We need to safeguard nature to overcome risk to human society and our economy. To do this, we have to redirect financing away from destroying nature to nature positive. The roles of both private and public financial institutions are pivotal in order to realise this, and nature-related financial disclosure is one critical piece of work that will catalyse shifting of financial flows at scale.”

Eric Usher, Head of the UN Environment Programme Finance Initiative, added:

“This collaborative, international effort, will bring crucial natural capital risks such as biodiversity loss to the heart of financial disclosures. The TNFD will allow investors, lenders and insurers to have consistent information and transparency at their fingertips, allowing them to make informed decisions, bring efficiency to financial markets, and direct their investments towards nature-positive areas of the economy”.

Margaret Kuhlow, WWF’s Global Finance Practice Lead and interim Global Conservation Director, added:

“The twin climate change and nature loss crises are affecting our economies and societies significantly, and the dual health and economic crises of COVID-19 have further highlighted our broken relationship with nature. We are pleased to see this group of financial institutions join the search for solutions by identifying nature-related risks and dependencies that materially affect their portfolios. This crucial information will enable financial institutions to better incorporate nature in their decision-making, and help to shift finance away from destructive activities and toward those business activities that support the nature we rely on for our own health as well as the health of our economies.”

Image: Glass buildings, Brussels | Guillaume Meurice | Pexels