More than 100 financial institutions have committed today to start reporting in accordance with the Taskforce on Nature-related Financial Disclosures (TNFD).
Norges Bank Investment Management (NBIM), KLP, and Swedish pension funds AP2 and AP7 are among the asset owners to have signed up as ‘early adopters’ of the framework, which seeks to drive more transparency around nature-related risks and impacts.
Altogether, 320 entities have pledged to report in line with at least some of the TNFD’s expectations between now and the end of the 2025 financial year.
Around one third are financial institutions, including seven of the world’s 29 ‘global systemically important banks’ and asset owners and managers with a combined $14trn in assets under management.
“It doesn’t mean that they’re going to do all 14 of our recommended disclosures in the first year,” noted Tony Goldner, executive director of the TNFD, during a press briefing.
“That’s important, because it’s the trend that we saw with TCFD,” he continued, referring to the now widely-used recommendations of the Taskforce on Climate-related Financial Disclosures, on which the TNFD is based.
“The average number of disclosures in the first year of TCFD was something like 1.4 or 1.6 [out of 11], so – as we’ve seen with climate reporting – companies will get started and will increase their disclosures over time,” he added.
Goldner acknowledged challenges around data availability, but said that during pilot tests, entities were “surprised by how much data they already had available to them, or could readily get access to”.
“And half of our recommendations are qualitative in nature – they don’t require quantitative data,” he pointed out.
TNFD is working with the EU’s sustainability-related reporting body, European Financial Reporting Advisory Group (EFRAG), to map the relationship between different nature-related standards being developed, including the European Sustainability Reporting Standards.
Speaking to IPE, Johan Floren, head of ESG at AP7, said that “initially, we will focus on reporting what is possible”.
“It will probably take some time to get companies to report more location-specific data,” he added. “Then we will select engagement initiatives and get active.”
In 2022, Storebrand Asset Management partnered with one of its portfolio companies, Grieg Seafood, to develop a case study as part of the TNFD’s work on how to use its recommendations to support shareholder engagement. It focused on the risks that investors could face from salmon aquaculture.
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