TNFD third draft framework adds disclosure requirements

Enhances nature dependencies and supply chain disclosures

The Taskforce on Nature-related Financial Disclosures (TNFD) has released the third draft of its framework for companies to report their nature-related risks and impact, including more disclosure requirements and guidance on setting science-based targets.

The Taskforce, which released the second draft of its framework in June this year, will be releasing its fourth draft in March 2023 before publishing its final recommendations in September 2023.

Amid a growing interest in nature-related risk from the investment industry, the TNFD said it has grown to include more than 700 institutions from across five continents since June. It added more than 130 organisations have started or announced plans to pilot test the beta framework.

Its latest draft expands its disclosure requirements by adding dependencies on nature alongside risks and opportunities, and supply chain-related disclosures.

“This framework will encourage increasing disclosure ambition over time, essential to aligning financial flows and business activities to the task of urgently halting and reversing nature loss; and ensuring that both business and finance become more resilient in the face of the increasing frequency and magnitude of nature-related risks that are clearly apparent today,” said David Craig, co-chair of the TNFD.

It also includes draft guidance on target-setting developed with the Science Based Targets Network and draft disclosure guidance for financial institutions.

“The TNFD framework is evolving in a direction that is well aligned not only with emerging regulatory and standard setting approaches but also with global policy goals currently being negotiated as the Global Biodiversity Framework (GBF),” said Elizabeth Mrema, TNFD co-chair and executive secretary of the Convention on Biological Diversity.

“I am confident that the TNFD Framework can be the practical connective tissue between global political commitment to act on nature loss represented by the GBF and the mobilisation of business and finance action through better risk management and capital deployment.”