Norges Bank Investment Management (NBIM), Bank of America, Federated Hermes, Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial Group are among the 106 financial institutions announced as “early adopters” of the Taskforce on Nature-related Financial Disclosures (TNFD) at the World Economic Forum in Davos.
On Tuesday, the initiative revealed details of 320 organisations that have signalled their intention to begin adopting the TNFD recommendations and publishing TNFD-aligned disclosures as part of their annual corporate reporting.
Published in September last year, the recommendations aim to enable organisations to report and act on nature-related dependencies, impacts, risks and opportunities. At the time of the launch, several organisations – including GSK and Mirova – committed to implementing them.
During a press conference this week, TNFD executive director Tony Goldner said the commitment from organisations is about getting started.
“It doesn’t mean that they’re going to do all 14 of our recommended disclosures in the first year,” he said. “That’s the trend we saw with TCFD. The average number of TCFD disclosures in the first year of TCFD was something like 1.4 or 1.6. Companies will get started and they will increase their disclosures over time.”
Goldner noted the challenges around data, but said that during the pilot reporting phase organisations had shown that there is enough data to get started.
Looking at the geographical spread of the financial institutions, Europe is the leader with 55 adopters, while Asia is second with 36. Other regions lag behind, with six names from Latin America, four from Africa, three each from North America and Oceania, and one from the Middle East.
US financial institutions were particularly noticeable by their absence. Apart from Bank of America, the country’s second-largest lender, the only other US name on the list was Paine Schwartz Partners, a private equity firm specialising in sustainable food chain investing.
However, heavyweight US market service providers including Moody’s, MSCI and S&P Global have signed up.
On a country-specific level, Japan easily takes the top spot with 25 financial institution adopters, ahead of the UK with 18 and France with nine.
Adopters could choose to start disclosure in FY2024 or FY2025. Sixty-four financial institutions – including AP2, Federated Hermes, NBIM, JGP and Sumitomo Mitsui Financial Group – signed up to the earlier group. Almost 40 names, including AXA, Bank of America, Brunel Pension Partnership and Standard Chartered, opted for FY2025.
Alongside financial institutions, 178 corporates – including IKEA, Anglo American and Bunge – as well as 18 market service providers and 18 “other” organisations – categorised as “including NGO, public development, data, public sector etc” by the TNFD – were named as early adopters.
Again, Europe and APAC are the best-represented overall, accounting for 43 percent and 42 percent of institutions respectively. North America and Latin America each accounted for 6 percent, and Africa and the Middle East for 3 percent apiece.
Goldner said the TNFD was happy that adopters came from 46 countries.
“One could have imagined that this would have been highly concentrated in OECD countries, the US, Europe, places like Australia and Japan. But in fact, we’ve seen companies stepping forward in every continent and across all the major sectors,” he said.
“It’s a fantastic beginning, and it just shows that companies in any sector and any geography can get started with TNFD adoption and thinking seriously about their nature-related issues.”
A second tranche of adopters is set to be announced at COP16, which will be held in Colombia later this year.