Empowering investors: TNFD in action – ESG Clarity

    Empowering investors: TNFD in action – ESG Clarity

    New disclosure recommendations will help investors to manage risks associated with nature and biodiversity

    Last month’s launch of the Taskforce on Nature-related Financial Disclosures (TNFD) represents a significant milestone for risk management and opportunity that perhaps couldn’t have been envisaged just three years ago.

    This ground-breaking initiative, akin to the Task Force on Climate-related Financial Disclosures (TCFD), is likely to transform the way investors assess and manage risks associated with nature and biodiversity in the wake of a raft of materiality and disclosure regulation.

    See also: – In conversation with the TCFD: ‘It seemed the right time to wind down’

    The TNFD, comprising a comprehensive framework for disclosures, offers detailed guidance on what, where and how to disclose essential information about an organisation’s dependencies and impacts on nature. But what are its key features, how can investors integrate it into their decision-making as fiduciaries and where is the data?

    LEAP into action

    The TNFD’s core objective is to facilitate the integration of nature-related risks and opportunities into financial decision-making. To achieve this, it provides detailed information on the scope of required disclosures.

    These disclosures encompass an organisation’s actual locations – a key differentiator of nature-related considerations, given the location specificity of biodiversity, alongside dependencies on nature, its impacts on nature and the related material financial risks and opportunities in line with the approach recommended in other frameworks such as the International Sustainability Standards Board.

    Read the full comment in ESG Clarity’s October 2023 digital magazine.

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