Outcomes should be “front-and-centre” of the Taskforce on Nature-related Financial Disclosure’s (TNFD) approach to metrics and target-setting as the framework evolves, according to feedback from Cardano and its Dutch sustainable investment subsidiary Actiam.

In early March TNFD released the first beta version of a nature-related risk management and disclosure framework for consultation. It said early feedback within 45 days was especially welcome from corporates, financial institutions and regulators.

Together, Actiam and Cardano responded to the TNFD’s online questionnaire about the ‘v0.1 beta release’ and followed up on this with a letter to the Taskforce summarising their feedback.

One of the points they made was that in their reading, the TNFD focusses more on companies’ “dependencies” on biodiversity and ecosystem services provided by nature than on companies’ impact on biodiversity and the drivers of biodiversity loss.

“While we see benefits in focussing on dependencies (for example, the opportunities of nature-based solutions), we would encourage alignment with existing initiatives, and therefore, further attention to impact,” wrote Arjan Ruijs, senior responsible investment officer at Actiam, and Will Martindale, group head of sustainability at Cardano.

Speaking to IPE, Martindale said the TNFD’s alignment with the Task Force on Climate-related Financial Disclosures (TCFD) framework was welcome and that “the one area we’d like to encourage TNFD to really prioritise is this idea of outcomes”.

“So while TCFD is predominantely focussed on financial risks associated with climate change, TNFD is looking to reflect this concept of double materiality,” he added.

Also welcoming the alignment with the TCFD, Ruijs said one of his main recommendations was that the TNFD should look carefully at the initiatives that are ongoing, for example in relation to biodiversity accounting and measurement, such as the Partnership for Biodiversity Accounting Financials.

“When reading the TNFD report I get a little bit the impression that it’s more a top-down approach,” he said. “I think it would be good to combine these things.”


A concern of Ruijs’ is the language of the TNFD’s proposed framework, which, though making reference to biodiversity, focusses on nature.

“But if you look at most initiatives they have biodiversity as the starting point,” Ruijs said. “For financial institutions biodiversity is easier to consider than nature.”

In their letter, Martindale and Ruijs said that while they were not suggesting a rename, “we note that ‘nature’ is a less well-defined concept within financial matures and as such may make it harder for companies to set targets”.

“By giving more emphasis to biodiversity and the drivers of biodiversity loss, we think the TNFD would provide companies (and their investors) additional clarity in target-setting.”

Terminology and definitions should be rooted in the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES), they said. IPBES can be thought of as the biodiversity counterparty to the Intergovernmental Panel on Climate Change (IPCC).

Martindale and Ruijs also gave specific feedback relating to measurement and target-setting tools, saying they suggested ENCORE and IPBES for biodiversity measurement, and recommended ‘Mean Species Abundance’ or ‘Potentially Disappeared Fraction’ as metrics for target-setting.

“In particular, for asset managers, we recommend a ‘foot-printing’ methodology that would allow us to measure our portfolio impact,” their letter stated. “That said, foot-printing should be used to prioritise stewardship and company behaviour-change.”

A further three iterations of the TNFD beta version are planned before release of the final version v1.0 of the framework in the third quarter of 2023.

Still time to register!

This Thursday, 28 April IPE is hosting its latest ESG Global Forum, a morning seminar focussed on biodiversity from the investor perspective. More information and the registration link can be found here: https://ipe.swoogo.com/esg-biodiversity

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