The Taskforce on Nature-related Financial Disclosures (TNFD) will announce the latest group of adopters during London Climate Action Week, which runs from 24th to 28th June.
This marks a significant step forward in the integration of nature-related financial disclosures into global business practices, and will start to bring reporting on this issue in line with those carbon disclosure and climate risk.
This TNFD’s initiative is part of the wider Global Biodiversity Framework, which mandates businesses to disclose their risks, dependencies, and impacts on biodiversity. This framework is crucial for aligning national strategies with global biodiversity goals.
Ahead of this announcement Morningstar Sustainalytics has provided insights from its engagement with 50 companies it engages with from across the agricultural value chain. Overall it found around one fifth of these firms intend to report in line with the TNFD by 2025 or earlier.
It also said that companies in Europe and Asia-Pacific are leading the way when it comes to TNFD-aligned disclosures.
Morningstar adds that the main reasons given by companies who have yet to commit to these new rules include issues with data quality and availability, prioritising mandatory reporting first, and assessing the TNFD’s relationship to other nature-related frameworks and standards such as the European Sustainability Reporting Standards (ESRS).
Morningstar Sustainalytics, stewardship engagement manager Gayaneh Shahbazian says: “With just six years left to achieve global biodiversity targets, initiating action now and refining processes along the way is crucial. Collating and disclosing nature-related data will offer organisations a clearer understanding of the challenges and enable transformative actions. In turn, this will empower financial institutions to make informed investment decisions that will shift financial flows away from activities that harm nature and toward those that can contribute to halting and reversing nature loss.”
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