TNFD kicks off development of data lake for nature

Investors are set to gain access to much more information about companies’ nature-related risks and opportunities with the creation of a new data lake.

The Taskforce on Nature-related Financial Disclosures (TNFD) has confirmed plans to pilot a Nature Data Public Facility (NDPF) next year, to help overcome current challenges for financial institutions looking to source credible information.

“Market participants have particular needs and concerns about the current state of nature data,” said TNFD, pointing to problems with its accessibility, quality, comparability and reliability.

Investors are under growing pressure to set portfolio-level targets for nature, and to include nature in climate transition strategies.

Large institutions are also covered by the EU’s Corporate Sustainability Reporting Directive, which requires them to report any material exposure to risks, opportunities and impacts associated with biodiversity, water, waste and ecosystems.

The NDPF will be modelled on the Net Zero Data Public Utility, an existing repository that aggregates climate information from various sources, including Bloomberg and CDP, and provides it freely to stakeholders.

Among its list of key stakeholders will be “insurance companies and globally significant universal asset owners with portfolios comprised of thousands of discreet equity holdings each with a geographically dispersed set of operating footprints across geographies and biomes”.

The long-term governance of the NDPF is still to be decided, but it is expected to focus on housing information about the state of nature, rather than the impact companies are having on ecosystems via their business operations.

TNFD said it had already received significant interest from data providers and data users – including financial institutions – in participating in the pilot, which will inform a final development plan for the NDPF, along with a roadmap for how to improve information along the value chain.

To help standardise how nature-related information is reported by companies, the Nature Positive Initiative will also pilot a set of dedicated metrics next year. The non-profit initiative convenes 27 members, including the TNFD.

The taskforce will work with WWF and others to integrate nature-related geospatial data into the NDPF.

Last week, the TNFD revealed that more than 500 firms have now committed to report in line with its recommendations by 2026, with particularly strong uptake among asset managers.

It also published a report on how to develop transition plans for nature.

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