The Taskforce on Nature-related Financial Disclosures (TNFD) has released the fourth and final version of its framework designed to measure and address nature-related risks at public companies.
The move comes as the TNFD gets ready to publish its final recommendations in September 2023.
In an open statement, the body says that since it started putting together the framework in October 2021, it has received endorsements from more than 1,000 organizations included in the TNFD forum and an additional 200 firms, which are now testing ‘aspects’ of the frameworks across different countries and sectors.
The fourth beta framework features some changes from the previous version (v3), though TNFD says any feedback received from market participants and other stakeholders until now shows a broad endorsement of the three core elements that comprise the framework. Those are:
- Key concepts and definitions
- A proposed risks and opportunity assessment approach
- Disclosure recommendations aligned with the TCFD.
While market participants may have ‘broadly endorsed’ the core elements, the consultation carried out over the past 18 months led to some changes in the final draft. One change is the reduction of the number of proposed recommended disclosures from 15 to 14.
More specifically, the latest beta framework does not include the disclosure of ‘Metrics and Targets D’ on nature and climate targets proposed in the previous draft. The taskforce says it has anyways retained the intention of including climate-nature target alignment, incorporating this as a ‘general requirement’ for integration with other sustainability issues.
The amendment ‘reflects the need to consider connections across sustainability issues in all TNFD disclosures rather than just in one stand-alone disclosure,’ says TNFD.
Three other changes and updates feature additional draft guidance on engagement with affected stakeholders, draft guidance for companies in four sectors and guidance for four biomes. The four sectors are agriculture and food, mining and metals, energy and financial institutions.
TNFD says additional sector and biome guidance will also be released on a rolling basis in the coming months.
‘The TNFD framework is anchored by the same four pillars of the TCFD approach and all 11 of the TCFD recommended disclosures have been incorporated into the TNFD final draft, providing market participants with a high level of alignment with the structure, language and approach taken by the TCFD,’ reads a statement from the taskforce. ‘This should encourage and enable market participants to move toward integrated climate-nature disclosures.’
A 60-day consultation process to June 1, 2023 will now take place and the TNFD confirms it will issue its final recommendations based on feedback and pilot testing in Q3 this year.
Elizabeth Mrema, co-chair of TNFD and executive director of the United Nations Environment Programme says: ‘I look forward to further market feedback and participation ahead of the September launch of our recommendations so that market participants can start identifying, assessing and disclosing their nature-related issues as soon as possible.’