The UK government must take immediate action to support and steer companies in adopting the Taskforce on Nature-related Financial Disclosures (TNFD) recommendations, a membership organisation comprised of some major corporates and NGOs in the country has said.
“The alarming rate of biodiversity loss in the UK and globally necessitates an accelerated TNFD adoption process,” the Aldersgate Group said in a briefing titled “Redirecting finance to nature: the case for mandatory TNFD-aligned disclosures”, released on Friday.
The Group’s members include major companies and financial institutions such as Lloyds Banking Group, KPMG, and Tesco, as well as environmental organisations WWF and the Wildlife Trusts.
The organisation urged the government to expedite the adoption of TNFD-aligned disclosures by:
- Setting out an iterative roadmap to mandatory TNFD disclosures
- Introducing supportive measures to build capacity and skills
- Championing TNFD framework uptake and data sharing internationally
“Very few, if any, companies are likely to be fully compliant with the TNFD framework immediately. Therefore, the government should outline an iterative timeline, setting out several core disclosure requirements they expect companies to report against in the first year of disclosure, followed by a number of extended disclosure requirements for subsequent years,” the briefing said.
While there is strong business consensus that mandating TNFD is set to push companies to gear up for nature-related disclosures, corporates need to be supported in their efforts, the group warned.
Notably, the organisation called on the government to help companies bridge the skills gap on nature that affects most UK businesses.
According to a report published by not-for-profit CDP last year, only 24% of financial institutions have at least one board member competent in nature-related issues.
“The government should work closely with professional bodies, such as the Sustainable Finance Education Charter, to integrate TNFD reporting within relevant professional courses,” the Aldergate Group said.
“As building capacity and capability takes time, the government and regulators should look to provide guidance as early as possible to support companies that are piloting or producing TNFD-aligned disclosures on a voluntary basis.”
The organisation also stressed the need for an uplift in the availability of biodiversity data.
According to a survey carried out by Credit Suisse in 2021, the lack of available data is regarded as a major obstacle for 70% of institutional investors eyeing investments in biodiversity.
“The UK should continue to champion the framework in international fora, as well as work with governments, businesses, and data providers to increase the availability of biodiversity data,” the briefing said.
In December, the UK announced £2 million to support the capacity building of the TNFD initiative.
The debate around nature-related disclosures is gaining momentum, as 320 corporates and organisations worldwide have recently committed to aligning to TNFD recommendations within two years, the task force announced at the annual World Economic Forum meeting in Davos last week.
US-based Manulife Investment Management released its first TNFD-aligned nature disclosure on Friday.
By Sergio Colombo – sergio@carbon-pulse.com
** Click here to sign up to our twice-weekly biodiversity newsletter **
