June newsletter: TNFD releases v0.2 of beta framework
TNFD releases v0.2 of beta framework
On June 28, TNFD released version 0.2 of its beta framework for nature-related risk and opportunity management and disclosure. This release provides additional guidance on metrics, for pilot testing and further market feedback.
The first version of the beta framework released in March has generated an overwhelmingly positive initial response from market participants with over 500 feedback contributions received from over 130 market participants and stakeholders across 37 countries and all five continents.
While the TNFD draft disclosure recommendations, core concepts and definitions and the LEAP (Locate, Evaluate, Assess, Prepare) process guidance released in March have not been significantly changed, this second iteration of the TNFD beta framework includes several enhancements and additional elements carefully developed by the Taskforce:
- A draft architecture for the Taskforce’s approach to metrics and targets;
- An illustrative set of Assessment Metrics for dependence and impact analysis as well as additional guidance on how to evaluate your dependencies and impacts developed in partnership with the Capitals Coalition and aligned with the Natural Capital Protocol;
- Further guidance on the identification of priority locations in the ‘Locate’ Phase of the LEAP approach;
- An overview of the TNFD’s proposed sector classification aligned with the approach taken by ISSB and TCFD;
- Enhancements to the LEAP approach for financial institutions (LEAP-FI) as providers of capital.
All updated and new content is marked within the framework site. Two more update releases of the beta framework are scheduled for November 2022 (previously October 2022) and February 2023, before the Taskforce’s final recommendations are published in September 2023.
TNFD Piloting Guide now available
Alongside the updated framework and complementary guidance documents, the TNFD and its piloting partners are releasing a TNFD Piloting Guide, providing additional practical guidance for market participants interested in pilot testing the beta framework from 1 July 2022 to 1 June 2023. The Piloting Guide can be accessed both in pdf format and via the interactive online platform.
The Taskforce welcomes participation in piloting testing from a wide range of market participants across jurisdictions and sectors. The Taskforce encourages collaborative pilot testing projects.
The guide has been developed in partnership with the TNFD’s piloting programme partners: FSD Africa, through the African Natural Capital Alliance (ANCA), Global Canopy, the International Council of Mining and Metals, the United Nations Environment Programme’s Finance Initiative (UNEP FI) and the World Business Council for Sustainable Development (WBCSD).
The Taskforce invites market participants and other stakeholders to continue to provide feedback on the beta framework via the feedback form on the online platform. The framework is open for feedback until 1 June 2023, with 23 September being the final deadline for feedback on v0.2 for the Taskforce to consider the feedback before the release of v0.3 in November.
Read, watch, listen: key new content on nature, finance & business
Nature and financial institutions in Africa: A first assessment of opportunities and risks (FSD Africa, Vivid Economics by McKinsey, McKinsey Sustainability) This report covers insights from the first application of the TNFD beta framework to stress test financial institutions and systems in Africa. It presents the results of applying TNFD’s LEAP approach to a private financial institution’s portfolio and to a national financial system, and shows that nature-related opportunities and risks are material in Africa, a region with high growth opportunities and globally important natural capital.
Nature Loss and Sovereign Credit Ratings (Finance for Biodiversity Initiative) The report finds that despite the many effects that environmental degradation can have on economies and therefore sovereign creditworthiness, credit rating agencies do not explicitly incorporate biodiversity and nature-related risks in their methodologies. This report models the effect of nature loss on credit ratings, default probabilities, and the cost of borrowing.
Harmful Marine Extractives: Deep-sea mining (UNEP-FI) The briefing paper addresses the reputational, regulatory, and operational risks associated with deep-sea mining and how the financial sector should respond.
For more new content, including from KPMG, WWF, WEF and many more, visit the TNFD Knowledge Bank, which features an extensive selection of curated research reports and market insights.
Join TNFD at events
- Swiss Sustainable Finance Annual Conference (29 June) TNFD’s Executive Director Tony Goldner will be speaking at the ‘Biodiversity and Finance’ discussion (14:10 CEST). SSF’s Annual Conference 2022 will also include keynote speeches on the role of finance in addressing the loss of biodiversity, the interaction between the real economy and finance and the Swiss regulatory approach to sustainable finance as well as interviews with experts from key finance initiatives addressing environmental challenges and followed by a panel discussion on data challenges.
- ESG Focus – Sustainable Investment Strategy Summit (7 July) As part of this summit, TNFD will be discussing the impact of biodiversity risk on an investor portfolio. Key experts and industry leaders will be present to discuss the latest ESG solutions, regulations and technology trends.
- Save the date: IUCN Leaders Forum 2022 ‘Building nature-positive economies and societies’ (13-15 October) TNFD and IUCN are partnering with the Korean Ministry of Environment and the Jeju Special Self-Governing Province to bring together leaders from government at national and local level, NGOs, Indigenous Peoples organisations and executives from finance and industry. TNFD’s members and any interested parties are invited to attend. If you wish to receive communications regarding this event, please contact [email protected]
For a complete list of upcoming events with TNFD spokespeople, see tnfd.global/events.
TNFD in the media – highlights
- ESG Clarity (28 June): Metrics and guidance boosted in TNFD framework second draft
- Finextra (16 June): How we will Measure and Manage Nature in Financial Services (David Craig podcast)
- African Business Community (13 June): Leading financial institutions in Africa, UNECA and FSD Africa to form the African Natural Capital Alliance
- Business Insider (2 June): Por qué los grandes inversores presionan a las empresas para que les faciliten datos como la ubicación de sus almacenes y fábricas