Last week, Responsible Investor reported that 106 financial institutions had been announced as “early adopters” of the Taskforce on Nature-related Financial Disclosures (TNFD) at the World Economic Forum in Davos.
The list included key players such as Norges Bank Investment Management (NBIM), Bank of America, Federated Hermes, Storebrand Asset Management, Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial Group.
However, some names that RI had expected to be part of the early adopter group were notably absent.
This includes firms involved in the development of the TNFD and some key investor members of engagement initiative Nature Action 100, which has an expectation that corporates targeted will assess and publicly disclose nature-related information.
Launched in September, the TNFD’s recommendations went through four public consultations, and as part of the process the initiative received input from 19 knowledge partners and a 1,200-strong forum of institutions and stakeholders. It also pilot-tested versions of its framework with more than 200 companies and financial institutions.
Most of institutions contacted by RI on why they had not signed up to be early adopters said it was not a case of whether they would implement the TNFD, but more about when and how they would do so.
A spokesperson for HSBC – which is represented on the initiative’s taskforce – told RI that it recognised the importance of nature-related disclosures and is supportive of an “internationally harmonised nature disclosure framework”.
“We are working to better understand the reporting requirements under TNFD and other relevant frameworks, to ensure we can access sufficiently high-quality data to support these,” they said.
“This means we are not yet ready to signal adoption of TNFD, but we continue to engage with the TNFD and its Financial Institutions Working Group to explore how they can help us and our clients to strengthen our nature-related reporting.”
A spokesperson for BNP Paribas Asset Management told RI that the TNFD is a group-level initiative and that “any such initiative will therefore be subject to a review at group-level prior to making any public comment, especially one relating to a topic as complex as nature-related disclosure”.
They added that because the EU’s Corporate Sustainability Reporting Directive (CSRD) “includes requirements on biodiversity that are very similar to those of the TNFD, and therefore how closely related both topics are, the group will be addressing them jointly”.
The bank will be conducting “a thorough review of its extra-financial reporting in order to be able to comply with the CSRD, starting in 2025 (ie for fiscal year 2024)”, the spokesperson said.
Dutch ASN Bank – which is a forum member and was the convening institution of the Partnership Biodiversity Accounting Financials (PBAF) – was also not part of the early adopter list.
Roel Nozeman, head of biodiversity at ASN Bank, told RI its “footprinting efforts and disclosures fit perfectly within the TNFD” and that it is also set to disclose using TNFD in 2025 or 2026.
He did not reply to a request for further comment on why the bank decided against being an early adopter.
Meanwhile, Lombard Odier Investment Managers’ Thomas Hohne-Sparborth, said the investor is in the middle of a review of the TNFD’s implications for the business and the reporting requirements involved across all of its business lines. It expects to make a formal decision on the TNFD commitment in the next months.
The head of sustainability research noted that the manager, which is a member of the TNFD forum and Nature Action 100 participant, has primarily focused on building capacity around nature. This includes the appointment of a chief nature officer and the onboarding of an investment team dedicated to exploring opportunities around nature-based solutions.
“We have chosen to prioritise the onboarding and integration of these teams and individuals, to ensure we have the right skillsets in place to undertake a full and thorough screening of nature risks and opportunities, and how to integrate these elements across the firm,” he said.
“As these individuals take up their roles within our organisation, in parallel we are organising ourselves to be able to address the requirements by TNFD.”
Other investors said they are planning to incorporate TNFD into its climate reporting.
For example, L&G said it “will be aiming to begin to incorporate more formal disclosures into our next L&G Climate Report, to be published in March”.
The spokesperson added that L&G is “fully supportive of TNFD’s ambitions and it is our current intention to incorporate the underlying requirements over time”.
Another UK investor also told RI aspects of TNFD can be expected to be referenced in its forthcoming TCFD reporting.
For the smaller financial institutions, resources were unsurprisingly a factor as to why they did not sign up to be an early adopter.
For instance, Green Century Capital Management – which is a participant of Nature Action 100 – told RI that it fully supports the TNFD. However, “as the only US mutual funded owned by non-profits, we watch our resources of money and time so our profits can help fund the greatest number of environmental and public health campaigns”.
“Not joining TNFD as an early adopter does not negate our strong support of the organisation, its important role, or our decade-long commitment to nature-based shareholder advocacy.”