The Taskforce on Nature-related Financial Disclosures (TNFD) has released the first beta version of its nature-related risk-management and disclosure framework.
Described as the first integrated approach to incorporating nature-related risk and opportunity analysis into the heart of corporate and financial decision-making, the prototype framework marks the beginning of an 18-month process of consultation and development together with a broad range of market players and stakeholders.
David Craig, Co-Chair of TNFD commented on the announcement: “Building an improved understanding of nature and nature-related risks and opportunities is a critical enabler of better corporate strategy, better capital allocation decisions, better governance, and better risk management and disclosure practices.
“With climate change and nature-related impacts and risks increasing, it is essential companies incorporate natural assets into their strategic planning and risk management if they are going to succeed.”
By following an open innovation approach, TNFD hopes to accelerate the framework’s development and steadily improve its relevance, usability, and effectiveness before releasing its recommendations in the 3rd quarter of 2023.
Mr Craig continued: “The approach we are taking of developing this guidance with market participants through an iterative, open innovation process over the next 18 months will help to ensure our final recommendations are both science-based and practical to implement.
“We invite all market participants and stakeholders to review this first prototype of the framework and share their feedback.”
This first beta version of the TNFD framework comprises three components:
- Foundational guidance, including key science-based concepts and definitions, to help a wide range of market participants understand nature, and nature-related risks and opportunities;
- Disclosure recommendations aligned with the approach and language of the climate-related guidance developed by TCFD; and
- Practical guidance on nature-related risk and opportunity analysis for companies and financial institutions to consider incorporating into their enterprise risk and portfolio management processes.
More information about the Nature-related Risk Management Framework is available on the TNFD website.