A group of politicians, fund management and NGO representatives have discussed the possibility of making nature-related disclosures mandatory as soon as next year, calling the planet’s biodiversity loss a challenge that is “unbelievably urgent”.
At a roundtable titled Tacking Biodiversity Loss at the Houses of Parliament on 17 May, the committee of biodiversity finance experts, brought together by ShareAction and UK Sustainable Investment and Finance Association (UKSIF), called for policymakers to consider nature loss as urgent as climate change ahead of CBD-COP15.
See also: – Give biodiversity same attention and urgency as climate
As part of this, the group said the situation is escalating and the recommendations for the Taskforce for Nature-related Financial Disclosures (TNFD), which are due to be finalised and released in September 2023, should be made mandatory rather than adopted on a voluntary basis.
Caroline Lucas MP stated: “This is unbelievably urgent. Why shouldn’t we get straight to the point of mandating TNFD now?”, while James Alexander, CEO at UKSIF and ESG Clarity Committee member added: “We must be operating at the pace and scale of the challenges we face at high speed.”
Lord Benyon, parliamentary under-secretary of state at the department for environment, food and rural affairs, also commented: “The Taskforce for Climate-related Financial Disclosures (TCFD) was recently mandated for listed companies and asset managers. People said that couldn’t be done and it has, and it has been accepted.”
However, he added: “Whether we mandate or not at this stage is uncertain.”
Meanwhile, Emily McKenzie, technical director at the TNFD, said the pace of creating the nature disclosure framework was “huge” as they have been able to learn from TCFD.
TNFD published the first draft framework for companies in March, marking the beginning of an 18-month consultation process before it is finalised for the September 2023 deadline.
Recognising the link between climate change and nature loss, the TNFD framework is currently proposed to be in line with TCFD and adopts the same four pillars of disclosure recommendations that look at risk and opportunity assessment, recognising dependencies and impacts, overseeing strategies responding to these risks and also a statement should be provided on the scope of current disclosures and what further disclosures are planned in the future.
“There is a huge amount to learn from TCFD and it has become mandated in a number of companies and embedded in the ISSB [International Sustainability Standards Board, which is set to be finalised this year],” said McKenzie.
“There is a push for convergence. The TNFD will initially be market-led and voluntary, but there will be a decision on whether and when it is mandatory.”
