Nature risks disclosure framework introduces streamlined metrics
While there has been a lot of focus on climate relate disclosures in recent years, the past year saw some significant import placed on biodiversity and nature in the wider sustainability realm.
The TNFD, or Taskforce on Nature-related Financial Disclosures, is an international initiative that aims to establish a framework for companies and financial institutions to disclose their nature-related risks, impacts, dependencies, and opportunities. Similar to the Taskforce for Climate-related Financial Disclosures (TCFD), TNFD focuses specifically on the risks and opportunities associated with nature and biodiversity, and how these factors can impact financial performance.
The TNFD has now released the fourth and final beta version (V0.4) of its framework, focusing on core global and sector-specific metrics. The TNFD aims to balance the complexities of nature-related science with the practical reporting needs of companies and financial institutions when assessing risks, impacts, and dependencies. The approach includes a tiered set of “leading indicators” that are relevant across sectors and reflect global policy priorities.In V0.4 of the framework it has streamlined the nature-related metrics it identified last year, using its leading indicators approach to provide comparability across and within sectors, while also allowing report preparers flexibility to reflect differences in nature-related issues across sectors and business models.
As sustainability reporting continues to enter the mainstream, we will be watching the development of a wider array of standards with interest. Fundamentally, useful data stems from structured, comparable, digital disclosures. With the ISSB standards providing a global baseline, we hope additional reporting mechanisms do not distract from alignment and convergence of standards, which can provide internationally comparable metrics.
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