TNFD launches risk management and disclosure framework prototype
The beta version will aid the framework’s development before its official release.
TNFD, the Taskforce on Nature-related Financial Disclosures, has launched a beta version of its nature-related risk-management and disclosure framework, in what it called “an important step” by the market to enable organisations to report and act on evolving nature-related risks.
The prototype begins an 18-month consultation and development process to accelerate development and “steadily” improve the framework’s “relevance, usability, and effectiveness”. TNFD plans to release its recommendations in the third quarter of 2023.
Dependencies and impacts on nature pose risks to businesses, investors, and lenders and open new business opportunities to contribute to nature-positive outcomes, according to the TNFD.
David Craig, co-chair of TNFD, said: “Building an improved understanding of nature and nature-related risks and opportunities is a critical enabler of better corporate strategy, capital allocation decisions, better governance, and better risk management and disclosure practices.”
The TNFD beta framework comprises foundational guidance, including critical science-based concepts and definitions, disclosure recommendations, and practical advice on nature-related risk and opportunity analysis to support enterprise risk and portfolio management processes.
Craig added:”With climate change and nature-related impacts and risks increasing, companies must incorporate natural assets into their strategic planning and risk management if they are going to succeed.”
TNFD co-chairs Craig and Elizabeth Mrema will oversee the Taskforce. Using a collaborative approach, the Taskforce encourages market players and stakeholders to get involved by testing and providing feedback on framework prototypes through this interactive online platform.
Mrema said: “The TNFD process is a unique collaboration between market participants and the world’s leading authorities in the science of nature and standard-setting. We have laid strong foundations, driven by the market and grounded in the science.”
The framework was designed by the TNFD Taskforce, comprising 34 individuals from financial institutions, businesses, and market service providers with assets under management of US$18.3 trillion and operations in more than 180 countries.
Last Updated: 18 March 2022