The Taskforce on Nature-related Financial Disclosures (TNFD) has hit its latest milestone today, with global banks, investors and corporates joining governments and regulatory bodies to create an Informal Working Group (IWG) for the initiative.
Styled on the Financial Stability Board’s Taskforce on Climate-Related Financial Disclosures (TCFD) and “catalysed” by UNEP FI, UNDP, Global Canopy and WWF, the TNFD will be tasked with developing an international reporting standard for biodiversity and natural capital when it launches in 2021. The initial group – the ‘IWG’ – will decide the scope and workplan for the taskforce.
‘Biodiversity finance is the new frontier of green finance’ – Bérangère Abba, French Secretary of State, Ministry for Ecological Transition
The working group includes 34 financial institutions from across five continents, including Storebrand, NatWest, Citi, BNP Paribas, AXA, Rabobank, Credit Suisse, Banorte, Manulife Investment Management, Pimco, DBS Bank, Sumitomo Mitsui Trust Asset Management and Yes Bank.
Also sitting on the group are the UK, French, Swiss and Peruvian governments, as well as the OECD, WBSDC, the World Economic Forum and the World Bank. On the corporate side, BP, GlaxoSmithKline, EY and KPMG are among those represented.
The IWG launched today at The Business of Finance Day, announced by French Secretary of State, Ministry for Ecological Transition, Bérangère Abba.
“Biodiversity finance is the new frontier of green finance,” said Abba. “Nature requires as much ambition and collective effort as it has been done for climate so far, and the private sector can play a crucial part in redirecting financial flows.”
The TCFD made a series of recommendations to companies back in 2017 that, although largely voluntary at present, are hoped to become a de facto standard for how corporates think about and disclose climate risk. It currently has 1,440 institutions officially ‘supporting’ the framework.
Abba added: “We are convinced that the work of the TNFD will accelerate the understanding of these issues and will ultimately lead to both a reduction in financial flows and economic activities that are harmful to biodiversity and a massive redirection of flows towards activities that are favourable to biodiversity.”
The idea is for the IWG to meet monthly and be supported by a separate Technical Expert Group (TEG) in the run-up to the TNFD launch. The IWG will be able to ask the TEG to come up with advice or options on particular focus areas. The TEG membership – with a “core group” of around 10 – has yet to be announced, but is in the final stages of formation.
Nicky Chambers, Programme and Impact Director at Global Canopy, who co-convened the initiative, said the group has seen a “massive level of support”. “We’ve been bowled over by the appetite.”
“A lot of people have come to us, and we've also done some dedicated outreach to try and make sure that we've got good representation from the financial sector, including banks, investment and insurance; and from the business community, regulators, governments, existing frameworks and civil society. Geographic representation is also really important, so we did outreach on that.”
The Taskforce, whose launch is tentatively slated for the second quarter of 2021, may opt to have another, later TEG to aid in its two-year work programme.
Eric Usher, Head of UN Environment Programme Finance Initiative said: “An increasing number of financial institutions are stepping forward to address the twin crises of climate change and the loss of nature, and the strong appetite for a TNFD is further evidence of this momentum. Standardising nature-related disclosures will bring much needed efficiencies and transparency to financial markets.”