Sustainable Finance for a Nature-Positive Future: The Taskforce on Nature-Related Financial Disclosure (TNFD)

 

A newly launched Taskforce on Nature-related Financial Disclosures (TNFD) will provide a framework for organisations to report and act on evolving nature-related risks, in order to support a shift in global financial flows away from nature-negative outcomes and toward nature-positive outcomes.

 

In advance of the 2021 G7 leaders summit starting tomorrow, G7 finance ministers sent a clear signal of a global movement towards a green, resilient and nature-positive economy, by committing to build back better and greener from the pandemic, including through a move towards mandatory climate-related financial disclosures and support for nature-related financial disclosures. We explain what ‘nature-related financial disclosure’ actually means, why BirdLife is endorsing the new taskforce, and our role in ultimately helping to deliver the information and systems we need to deliver a nature-positive economic transformation.

The COVID19 pandemic has brought economic and social turmoil and tragedy, bringing a new dimension to risk and responsibility regarding nature. As highlighted in the Dasgupta review on the economics of biodiversity, ‘our demands far exceed Nature's capacity to supply “goods and services” we all rely on’. The world must therefore halt the loss of biodiversity and put nature on a path to recovery by 2030 – recent evidence from the Paulson Institute Financing Nature Report (2021) suggests that to reverse this decline by 2030, spending of between US$ 722-967 billion is required globally each year over the next ten years. Therefore, we must transform how we value nature, to prevent the continuous degradation of our environment and unlock its full potential in underpinning a healthy and sustainable planet, rebalancing our relationship with nature.

 

The world’s birds and wider biodiversity are at greater risk of extinction than ever before, and with them our health and survival. BirdLife’s 2020 Birds and Biodiversity Targets report identified that 74% of all Important Bird and Biodiversity Areas (Key Biodiversity Areas for birds) face human-induced threats, affecting nature and the services it provides.

 

The issue of biodiversity loss is also rapidly rising on the agenda of policymakers and financial institutions, due in part to the growing recognition of economic dependencies on healthily functioning ecosystem services, as reported previously in a landmark report on the biodiversity imperative for business from BirdLife Partner NABU. Estimates have indicated that over half of the world’s economic output (US$44 trillion of economic value generation), is highly or moderately or dependent on nature, according to estimates by the World Economic Forum. The delivery of nature-positive financial flows will play a fundamental role in achieving both the Convention on Biological Diversity (CBD’s) 2050 vision of “living in harmony with nature”, and the Sustainable Development Goals (SDGs) – in particular SDGs 14 and 15 on biodiversity.

However, the business case for nature is not yet being integrated into decision-making, with a lack of global regulation on the impacts of industries on biodiversity. Biodiversity-related risks associated with businesses and financial flows are often difficult to define, assess, measure and compare, with clear data and metric gaps, meaning that many sectors to date have not robustly assessed their impacts and dependencies on nature as part of their operations.  

New initiatives are now attempting to support the redirection of global financial flows away from nature-negative outcomes and towards nature-positive outcomes. Launched this month, a market-led global Taskforce for Nature-related Financial Disclosures (TNFD) aims to provide financial institutions and corporates with a complete picture of their environmental risks and opportunities. This multi-stakeholder task force will bring together financial institutions, corporations, governments, regulators, multilaterals, NGOs and consortiums through a common goal. The TNFD will ultimately aim to deliver a universal framework, by 2023, for organisations to report and act on nature-related risks, through an inclusive, comprehensive and consultative approach with stakeholders from all regions.

 

"BirdLife International as the world’s largest nature conservation partnership is proud to be supporting the TNFD’s efforts to develop a framework for nature-related risk appraisal, to deliver nature-positive financial flows and place nature on the path to recovery."

Patricia Zurita – CEO, BirdLife International

 

 

BirdLife’s work on sustainable finance

The BirdLife Partnership is actively supporting the sustainable finance agenda, working with people and business to conserve global biodiversity, habitats, and birds, in the sustainable use of nature’s resources.

A core element of the work of the TNFD will be the identification of data gaps and the refinement of required common tools, metrics, robust methodologies and standardised frameworks to facilitate a nature-positive transition. In BirdLife, we aim to inform and advance evidence-based policy for both the public and private sector into actionable practice at a site and wider landscape level, through a wealth of proprietary data and tools. Through our work co-managing the Integrated Biodiversity Assessment Tool (IBAT), as the avian authority for the IUCN Red List of Threatened Species and managing the world database of over 16,000 Key Biodiversity Areas (KBAs), we assess and monitor the threat and negative impact of industry on biodiversity.

 

"Biodiversity loss is a financial risk that can no longer be ignored, and investors have a key role to play in encouraging companies to disclose how their operations both impact and depend on nature. The TNFD is a powerful opportunity to shift global financial flows towards nature-positive outcomes, but financial institutions need appropriate biodiversity data in order to act. The globally authoritative biodiversity datasets available through the Integrated Biodiversity Assessment Tool are a great first step for companies and investors seeking to understand both their risk and impact on nature at the asset, project or portfolio level, and can help companies meet their disclosure requirements."

Ed Ellis – IBAT Business Manager

 

The new STAR (Species Threat Abatement and Restoration) metric, will support the aims of the TNFD and allow companies, governments and civil society to accurately measure their progress in stemming global species loss.

To demonstrate the applicability of a green and just economic model for post-covid recovery, BirdLife International has developed a set of pilot projects, working with governments in Germany, Nigeria, the EU and Singapore. These initiatives will ensure that recovery grants and loans going to key countries drive nature conservation, restoration, a nature-friendly transition to renewable energy and the proliferation of green jobs, which will reignite economies in a way that sets the path for a new nature-positive future. BirdLife is also working through its membership of the European Commission’s Platform on Sustainable Finance, which from next year will define what can be labelled as a sustainable investment in the EU.

In addition, we engage with and seek to inform financial institutions and corporations on measures and activities that will ensure that biodiversity and ecosystem considerations are incorporated into lending and investment decisions and implemented on the ground. For example, we work with stakeholders such as the renewable energy sector, including through our coordination of the CMS Energy Task Force, by developing tools to facilitate nature-friendly energy planning.

Biodiversity loss presents a critical risk to our health, survival and that of our planet. There must be a comprehensive, worldwide effort to value, conserve and restore nature via the redirection and alignment of financial flows away from nature-negative outcomes and toward nature-positive outcomes. The BirdLife Partnership, through our global network of partners and with birds as our messengers, is at the forefront of driving and supporting this process.

 

BirdLife welcomes continued engagement with the TNFD going forward. A summary of the proposed scope, governance, work plan, communication and resourcing plan for the TNFD can be found here, and you can read Patricia’s full endorsement statement here.

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