Establishing the taskforce on nature-related financial disclosures

The release of the first UN Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES) report in April 2019 made clear that the world’s natural capital is in sharp decline—especially in inter-tropical areas—and that without rapid and systemic change, biodiversity loss, deforestation, and land degradation will severely disrupt ecosystems, social stability, and the world economy. The COVID19 pandemic, which has been linked to illegal wildlife trade, environmental degradation, and people living below the poverty line, is demonstrating the huge impact of un-recognized biodiversity-related risk, to both the economy and humanity. A key driver of that situation is the financing flowing to economic activities that harm natural capital with no market recognition of the costs to ecosystems and a decline in global environmental benefits.

This GEF project will support the establishment of a Taskforce on Nature-related Financial Disclosures (TNFD) to develop and disseminate a global framework for corporates and financial institutions to assess, manage and report on their dependencies and impacts on nature. The TNFD will address threats to the health and value of natural capital derived from the conduct of corporate activities that do not adequately consider the financial materiality and impacts of biodiversity loss. Initiatives such as TNFD will enable governments to better integrate knowledge of nature risk of those financial flows within their national policies and make the relevant strategic plans more effective in responding to emerging country priorities. A common, credible, and widely supported TNFD recommendations framework for reporting on nature-related risks and impacts can pave the way for companies and Financial Institutions (FIs) to better identify and address them in their supply chains and portfolios.