November 11, 2021

The world’s largest sovereign wealth fund has joined the Taskforce on Nature-related Financial Disclosures (TNFD), an industry-led initiative that aims to provide a framework for organisations to report and act on nature-related financial risks.

Norges Bank Investment Management (NBIM) runs Norway’s Government Pension Fund – Global, an investment portfolio worth almost $1.4 trillion.

The sovereign wealth fund recently published expectations of companies on how they should take biodiversity and sustainable use of ecosystems into account in their business activities, noting that principles and standards in the field were still at an early stage of development.

Carine Smith Ihenacho, chief governance and compliance officer at NBIM, said: “As an investor, we recognise that biodiversity loss and deterioration of natural ecosystems can impact our long-term returns.

“While the financial relevance of nature loss is increasingly clear, the underlying information needed to identify and manage nature-related risks is often not available or decision-useful. Companies need a robust framework to understand and report their dependency and impact on nature, and to handle the associated challenges and opportunities.”

Currently, 34 executives and senior specialists from global financial institutions, corporates and service providers have been appointed as TNFD members.

More than 100 institutions have signed up to provide support by joining the TNFD forum, a consultative group of institutional supporters offering their expertise when required.

In 2022, TNFD members will form five working groups to drive the preparation of a “beta framework”.

The finalised risk management and disclosure framework is scheduled to be released in late 2023.

In September, the Climate Disclosure Standards Board launched a consultation on guidance for biodiversity-related disclosures.

The organisation recently conducted research that found a “definitive gap” in the integration of biodiversity matters into mainstream reports. It found that fewer than half of large European companies referring to the topic in annual reports.

Earlier this year Minerva published a free briefing on biodiversity issues as part of its Regulatory Briefings series. Click here to access.

Last Updated: 26 November 2021