The Taskforce on Nature-related Financial Disclosures (TNFD) announced a commitment by 320 companies and financial institutions to start nature-related corporate reporting, based on the recently released TNFD recommendations, with some to begin disclosures with their annual corporate reporting for 2023.
The commitments, announced at the World Economic Forum’s (WEF) Annual Meeting in Davos, Switzerland, marks a significant move towards the establishment of standardized reporting on nature-related governance, strategy, risk management and targets, with companies signing on representing $4 trillion in market capitalization, and also including more than 100 financial institutions across banks and insurers as well as asset owners and managers representing $14 trillion.
Each of the companies have pledged to begin providing TNFD-aligned disclosures as part of their annual corporate reporting for either the 2023, 2024 or 2025 fisal years.
Asset managers joining the commitment included Norges Bank Investment Management (NBIM), the investment manager for Norway’s $1.4 trillion oil fund.
Carine Smith Ihenacho, Chief Governance & Compliance Officer of NBIM, said:
“Addressing nature-related financial risks has been a longstanding priority on our ownership agenda at Norges Bank Investment Management. As active contributors to the Taskforce on Nature-related Financial Disclosures (TNFD), we are committed to leveraging this tool to deepen our understanding of our portfolio’s nature-related impacts and dependencies, further reinforcing our responsible investment efforts in this important area.”
The commitments follow the publication in September by the TNFD of its final recommendations for nature-related risk management and disclosure, following a a two-year process, beginning with the formation of the TNFD in June 2021, building on the success of the Task Force on Climate-related Financial Disclosures (TCFD).
The TNFD’s recommendations are anticipated to be used to help shape the development of future sustainability disclosure standards. The International Sustainability Standards Board (ISSB) of the IFRS Foundation, for example, which recently launched its landmark sustainability and climate reporting standards, has already announced that the TNFD recommendations will inform its future standard setting, and environmental disclosure platform CDP stated that it plans to align its global disclosure platform with the TNFD framework.
Calling the commitments a “milestone moment for Nature finance and for corporate reporting,” David Craig, Co-Chair of the TNFD and former founder and CEO of Refinitiv, said:
“As climate-related sustainability reporting goes mainstream through the new International Sustainability Standards Board (ISSB) standards and regulation in a growing number of countries, this is a clear signal that investors, lenders, insurers and companies are recognizing that their business models and portfolios are highly dependent on both nature and climate and need to be treated as both strategic risks and investment opportunities.”