The Case for a Task Force on Nature-related Financial Disclosures
This report, written in partnership with Vivid Economics, outlines why tackling nature-related risks is an urgent priority for the finance sector, and how a Task Force on Nature-related Financial Disclosures can help.
Nature and the ecosystem services it provides are essential inputs to businesses across the economy. Policy and social norms are expected to increasingly penalise actions that harm nature. Yet at the same time, business activity and the financial services that support it continue to degrade nature at an unprecedented rate.
- The deterioration of nature, and society’s response to it, creates systemic and material risks for financial institutions – risks that are still largely not understood
- The finance sector is exposed to three types of nature-related risks; (i) physical risk, (ii) transition risk, and (iii) systemic risk
- Currently, financial institutions are unable to fully identify, measure and manage nature-related risk
- A Task Force on Nature-related Financial Disclosures (TNFD) will help close data gaps and be a critical component of tackling nature-related financial risks