The Taskforce on Nature-related Financial Disclosures (TNFD) has published a beta version of its framework, in what has been highlighted as an “important step by the market to tackle the risk of nature loss”.

The beta release is the first step of an 18-month process of consultation and development with a range of market players and stakeholders, with TNFD hoping to accelerate the framework’s development before releasing its final recommendations in Q3 2023.

Further iterations of the beta release are also planned for release in June 2022, October 2022, and February 2023 to support this work.

The beta framework consists of three components, including foundational guidance to help market participants understand nature-related risks and opportunities, and practical guidance on nature-related risk and opportunity analysis for companies to consider.

Additionally, it includes disclosure recommendations aligned with approach and language used by the Task Force on Climate-related Financial Disclosures (TCFD), also adopting the same four-pillars developed by TCFD.

The taskforce previously emphasised that there has been close collaboration with the TCFD on the framework, with the alignment a reflection of industry calls for a consistent approach across sustainability reporting and the link between climate change and nature loss.

The beta framework is designed for future alignment with the global baseline for sustainability standards under development by the International Sustainability Standards Board (ISSB) while providing flexibility for those organisations that need to report to different materiality thresholds and regulatory requirements.

The taskforce confirmed that it is in dialogue with a range of standards setting bodies and regulatory authorities and will follow developments related to national, regional, and global approaches to sustainability reporting standards as they are made.

A new location-specific disclosure has also been proposed by the beta framework, alongside guidance on how market participants can begin to incorporate location-based nature-related dependencies, impacts and risks, as a reflection of the fact that dependencies and impacts on nature are “inherently local”.

Commenting on the beta framework, TNFD co-chair, David Craig, said: “Building an improved understanding of nature and nature-related risks and opportunities is a critical enabler of better corporate strategy, better capital allocation decisions, better governance, and better risk management and disclosure practices.

“With climate change and nature-related impacts and risks increasing, it is essential companies incorporate natural assets into their strategic planning and risk management if they are going to succeed.

“The approach we are taking of developing this guidance with market participants through an iterative, open innovation process over the next 18 months will help to ensure our final recommendations are both science-based and practical to implement.

“We invite all market participants and stakeholders to review this first prototype of the framework and share their feedback.”

Adding to this, TNFD co-chair, Elizabeth Mrema, also highlighted the TNFD process as a "unique collaboration" between market participants and leading authorities in the science of nature and standard setting, arguing that "the foundations we have laid are strong, driven by the market and grounded in the science".

“My hope is that governments agree on an ambitious and effective post-2020 Global Biodiversity Framework, the negotiations of which are taking place this week in Geneva, that can then inform the metrics and targets work the taskforce will continue to develop in the coming months," she added.

“The process towards the Global Biodiversity Framework and the TNFD are two key initiatives, among others, that support a shift in global financial flows away from nature-negative outcomes and toward nature-positive outcomes.”

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