TNFD taps indigenous groups to aid development of nature-related risk framework

The Taskforce on Nature-related Financial Disclosures (TNFD) has today announced a series of initiatives to increase its engagement with indigenous peoples, local communities, and other stakeholders, as it continues to develop recommendations for how investors and businesses should manage nature-related risks and opportunities.

With more than half of global economic activity – some $44tr a year – estimated to be dependent on nature, and with the natural world being damaged or destroyed at an ever-faster rate, the TNFD said there was a serious threat to both long- term economic growth and the sustainability of the planet’s resources.

The TNFD framework – which is now in a prototype format – aims to emulate the success of the Taskforce on Climate-related Financial Disclosures (TCFD) by establishing consistent guidelines to help corporates and financial institutions assesses and disclose the nature-related risks and opportunities they are facing. The ultimate aim of the international initiative is to help shift financial flows away from nature-negative and towards nature-positive outcomes.

The new initiatives – which were launched today at the World Economic Forum in Davos, Switzerland – include a partnership with the International Union for Conservation of Nature (IUCN) to better engage with indigenous peoples and local communities (IPLCs) that “steward much of the world’s natural resources and play a vital role in safeguarding nature”.

Tapping into the organisation’s global networks and relationships over the next 12 months, TNFD said the consultation process would “ensure the voices and perspectives of IPLCs from around the globe are incorporated into the design and development phase of the TNFD Framework”.

Two further initiatives include four piloting program partnerships with FSD Africa, Global Canopy, UNEP FI, ​​and WBCSD, as well as the launch of six formal TNFD consultation groups in Australia and New Zealand, India, Japan, Netherlands, Switzerland and the UK. The new group in the UK will be convened by the Green Finance Institute.

In a joint statement, David Craig and Elizabeth Mrema, co-chairs of the TNFD, said: “There is an urgent need and huge opportunity to mobilise the innovative power of finance and business to move quickly from developing one-dimensional solutions to three- dimensional solutions that address climate, nature, and social dimensions as a bundle. The TNFD is working closely with a range of other risk management and disclosure initiatives to contribute to the development of the global baseline of integrated sustainability reporting requirements that market participants are looking for .

“A strong and inclusive consultation process on nature-related risk management and reporting is fundamental to our success.”

Efforts to develop the TNFD’s nature-risk framework are led by 34 individual taskforce members, representing financial institutions, businesses, and market service providers, and supported by more than 400 institutions around the world that together constitute the TNFD Forum. A first ‘beta’ framework was released in March 2022, with the group now stepping up efforts to consult on its proposals and pilot how they would work in practice.

FSD Africa – through the African Natural Capital Alliance (ANCA), Global Canopy, UNEP-FI, and the World Business Council for Sustainable Development (WBCSD) – has been confirmed as the first of the TNFD’s piloting program partners. They will each run a portfolio of pilot tests over the next 12 months with both financial institutions and companies. With their support, the TNFD said it would pilot test all aspects of its beta framework across geographies and sectors to continue its development.

Final recommendations from the Taskforce are due in September 2023.

.

Leave a Comment