Nature could be the new climate for the world’s biggest financial institutions. This is according to some reports of the latest financial disclosure report, Nature in Green Finance: Bridging the gap in environmental reporting.
Although, most financial firms are reportedly failing to see how the natural world impacts their business, this could change as it becomes increasingly clear how nature impacts on profit, especially since the Taskforce for Nature-Related Financial Disclosures (TNFD) published a high-level scoping study exploring the case for a global nature-related public data facility.
The scoping study found that a global nature-related public data facility could scale the availability, quality and maintenance of nature data “with significant benefits for public, private and civil society stakeholders globally”, for which there is growing demand from government, business, finance and civil society actors.
Demand for nature-related data has accelerated since the successful agreement of the Kunming-Montreal Global Biodiversity Framework at the Convention on Biological Diversity (‘COP15’) in December 2022. This historic framework, agreed by 196 countries at the United Nations biodiversity conference, has been described as the 'Paris agreement for nature' in reference to the legally binding international treaty on climate change, adopted at COP21 in Paris in 2015.
The Global Biodiversity Framework set a target of US$200 billion per year of funding to be spent on nature repair by 2030, and committed signatory governments to ‘30×30’, i.e. designating 30 percent of Earth's land and ocean as protected areas by 2030.
Commenting on the scoping TNFD study, Tony Goldner, Executive Director of the TNFD, said that “Government, business, finance and civil society can’t take effective action on nature and climate challenges without high-quality, comparable and easily accessible data. A lot of progress has been made since the Paris Agreement to upgrade the quality and accessibility of climate-related data. We now need a step change in focus and funding to enhance a global baseline of nature-related data.”
For more describing the ongoing set of unique challenges facing businesses with regard to biodiversity click here.
Find more on biodiversity and accounting for nature on the Institute’s Sustainability Centre here.
About the Taskforce on Nature-related Financial Disclosures TNFD
The Taskforce on Nature-related Financial Disclosures (TNFD) is developing and delivering a market-led and science-based risk-management and disclosure framework that will enable companies and financial institutions to integrate nature into decision making and for organisations to report and act on evolving nature-related risks. The idea for the TNFD began in January 2019 at the World Economic Forum's Davos meeting in response to the growing need to factor nature into financial and business decisions. It was formally established in 2021. United Nations Environment Programme Finance Initiative (UNEP FI), United Nations Development Programme (UNDP), the World Wildlife Fund (WWF) and Global Canopy are founding partners. The TNFD consists of 40 individual members representing financial institutions, corporates and market service providers with over US$20trn in assets.
The TNFD takes its inspiration and approach from the Task Force on Climate-related Disclosures (TCFD). Both initiatives seek to use the power of risk management and disclosure of financial and non-financial information from companies to investors and lenders to shift capital flows to more sustainable outcomes. Find out more at the TNFD FAQs.
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