TNFD releases third iteration of beta framework
London, 4 November 2022: The TNFD releases v0.3 of its beta framework for nature-related risk management and disclosures.
V0.3 of the TNFD beta framework released with significant updates and enhancements:
- Expansion of the draft disclosure recommendations to incorporate dependencies and impacts on nature alongside risks and opportunities to the organisation;
- Proposed new disclosure recommendations related to supply chain traceability; the quality of stakeholders, including rights-holders, engagement; and the alignment of an organisation’s climate and nature targets;
- An adaptive approach to the application of TNFD’s disclosure recommendations to accommodate the varying materiality and reporting preferences and needs of report preparers; and to support early action by companies and financial institutions and encourage increasing disclosure ambition over time;
- Additional guidance on risk and opportunity assessment and the metrics proposed to support that analysis;
- Enhanced practical usability of its proposed risk and opportunity assessment approach (LEAP);
- Draft guidance on target-setting developed with the Science Based Targets Network (SBTN) and draft disclosure guidance for financial institutions; and
- Two new discussion papers – on scenarios; and societal dimensions of nature-related risk management and disclosure – to encourage market participants to contribute further to these areas of ongoing work by the Taskforce.
As it moves towards publication of its final recommendations in September 2023, this v0.3 update to the beta framework has benefited from extensive input and feedback from businesses, financial institutions, governments, regulatory and standards setting bodies, civil society organisations and Indigenous Peoples and Local Communities from around the world.
Since the v0.2 release in June the TNFD Forum supporting the Taskforce has grown to over 700 institutions from across five continents. Over 130 organisations have started or announced plans to pilot test the beta framework and over 100 data providers are now participating in the TNFD’s Data Catalyst initiative.
David Craig, Co-Chair of the Taskforce said:
“Together with the previously released draft disclosures on risks and opportunities aligned with the approach and language of TCFD, v0.3 of the TNFD beta framework now provides a full spectrum of recommended disclosures across dependencies, impacts, risks and opportunities to support the reporting preferences and compliance requirements of report preparers everywhere.
Our objective is to provide the TNFD framework as a powerful tool that helps move business and finance to take action on nature-related dependencies, impacts, risks and opportunities, sooner rather than later. 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.”
As part of this update to the beta framework, the Taskforce has issued two discussion papers —one on scenarios and one on societal considerations relevant to nature-relate risk management and disclosure — to solicit further feedback from market participants and other stakeholders as these aspects of the framework continue to be considered.
Jessica McDougall, Blackrock’s TNFD Taskforce Member and Lead of its Scenarios Working Group said:
“The Taskforce has developed a proposed approach to scenarios that is designed to build on an understanding of critical climate and nature-related uncertainties, while encouraging organizations to think through material risks and opportunities that are related to the use of natural capital in their business model. This framing is intentionally flexible and allows for an iterative approach, as additional guidance on nature-related scenarios is developed across the marketplace. We look forward to feedback on the Discussion Paper being released today.”
For the final draft version of the framework (v0.4) due for release in March 2023, the Taskforce is also preparing guidance on disclosure metrics; the measurement of impacts, dependencies and risks across supply chains; and the development of additional guidance for priority sectors —including agriculture and aquaculture, mining, energy, infrastructure and other sectors.
To support those additional activities the TNFD will shortly be announcing the expansion of the Taskforce from 34 to 40 members, bringing on board companies across a range of sectors to broaden and deepen its sector coverage and capabilities.
Following a final consultation process after the v0.4 release in March, the TNFD’s final recommendations (v1.0) will be published in September 2023.
Elizabeth Mrema, TNFD Co-Chair and Executive Secretary, the Convention on Biological Diversity (CBD) said:
“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). 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.”