What’s Next After TCFD? An Overview of Nature-Related Financial Disclosures

Global Risk Institute

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More than half of the world’s GDP, equal to USD $44 trillion, is moderately or highly dependent on nature. This means that nature-related risks, including those associated with biodiversity loss, could have significant macroeconomic implications. Failure to account for, mitigate and adapt to these implications is a source of risk for individual financial institutions and for financial system stability. However, financial institutions do not currently have the information needed to understand (1) how nature impacts an organization’s immediate financial performance or (2) the longer-term financial risks that may arise from how the organization, positively or negatively, impacts nature.

Less than 1% of disclosing companies are reporting nature- related risks, compared to the 97% that report risks related to climate. To address this disparity, the Task Force for Nature Related Financial Disclosures (TNFD) is developing an integrated risk management and disclosure framework for organizations to report and act on evolving nature- related risks and opportunities.

Over 700 institutions representing 48 countries have joined the TNFD Forum, a global multi-disciplinary consultative group, to support the technical work of the Taskforce. Many large Canadian financial institutions have been forum members, including BMO Financial Group, Canadian Imperial Bank of Commerce (CIBC), CPP Investments, and Manulife Investment Management. Public sector stakeholders are also part of the forum, including the Government of Canada, the Government of Québec, and the City of Mississauga.