Recommendations for nature-related risk management and disclosure

After two years of design and development through an open innovation process, the Taskforce on Nature-related Financial Disclosures (‘TNFD’) has published its final Recommendations for nature-related risk management and disclosure. These recommendations are a milestone in the relationship between nature, business and financial capital, positioning nature risk alongside financial, operational and climate risk and helping to shift capital flows to nature-positive outcomes.

The Recommendations aim to inform better decision making by companies and capital providers, and ultimately contribute to a shift in global financial flows toward nature-positive outcomes and the goals of the Kunming-Montreal Global Biodiversity Framework.

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Led by 40 Taskforce members representing over US$20 trillion in assets under management, the TNFD initiative has drawn on the support and active input of market and non-market stakeholders from almost 60 countries around the world. The Beijer Institute  is one of 19 knowledge partners along with close partner GEDB Academy programme. Beijer Institute director Carl Folke, GEDB executive director Beatrice Crona and Beijer Fellow Stephen Polasky (University of Minnesota) have been active in the process by contributing with input and advice to the recommendations.

“The TNFD provides inspirational direction for how to redirect global financial flows toward nature-positive outcomes and nature-related risks into opportunities. This is fundamental, exciting, and urgently needed”, commented Carl Folke.

The TNFD Recommendations are aligned with the requirement of Target 15 of the Kunming-Montreal Global Biodiversity Framework for corporate reporting which calls for assessment and disclosure of nature-related risks, impacts, and dependencies, enabling companies to now align their corporate reporting with global policy goals as they are now doing on climate related issues.

David Craig, Co-Chair of the TNFD and founder and former CEO of Refinitiv said: “Nature loss is accelerating, and businesses today are inadequately accounting for nature-related dependencies, impacts, risks and opportunities. Nature-risk is sitting in company cash flows and capital portfolios today. The costs of inaction are mounting quickly. Businesses and financial institutions now have the tools they need to take action.

The TNFD will now encourage and support voluntary market adoption of the Recommendations. It will track voluntary market adoption on an annual basis through an annual status update report beginning in 2024. TNFD will announce an inaugural list of companies that have indicated their intention to start adopting the Recommendations at the World Economic Forum at Davos in January 2024.

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