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Over 300 firms committed to TNFD since 2023 to restore nature
Over 300 companies, including some of the world’s biggest banks, have committed to the recommendations of the Taskforce on Nature-related Financial Disclosures (TNFD) since their launch in 2023 with an aim to shift global capital into activities that protect and restore nature, which is in peril around the world, according to the United Nations Environment Program (UNEP).
The recommendations were developed by the TNFD and supported by the United Nations, can, for example, show banks how much their lending contributes to deforestation or help chart the value of freshwater it siphons from a river.
TNFD recommendations and supported by the United Nations, can, for example, show banks how much their lending contributes to deforestation or help chart the value of freshwater it siphons from a river.
Observers say companies’ uptake is crucial for countering a nature crisis that is seeing an estimated 1 million species pushed towards extinction.
“Nature underpins human civilization. If it collapses, the consequences would be devastating,” says Elizabeth Maruma Mrema, Deputy Executive Director of the UNEP and a senior advisor to the TNFD.
“These recommendations are an important step, led by market players themselves, in creating a global economic system that safeguards nature.”
Every year, governments and private companies invest US$7 trillion in activities that harm nature, according to UNEP’s State of Finance for Nature report. The list of transgressions includes everything from clear-cutting forests to pumping out planet-warming greenhouse gasses. That is contributing to a rapid decline in biodiversity; one in eight species is now on the path to extinction. The World Economic Forum has identified biodiversity loss and ecosystem collapse as one of the five most-severe risks facing humanity over the next decade.
For companies, the biodiversity crisis is a ticking time bomb. Nearly all businesses ultimately rely on either natural resources or natural services, like the pollination of plants by animals, for their continued operation.
The TNFD outline how firms should report their environmental footprint to investors and the public. The hope is that increased scrutiny will push companies to stop damaging the natural world and, eventually, start restoring what has been lost. Some 40 percent of landscapes are classified as degraded and reviving those areas is a key theme of this year’s World Environment Day, an annual celebration of the Earth hosted by UNEP.
“Nature is complex and the TNFD provides clarity to our members on how to report on nature-related risks,” says Eric Usher, the director of UNEP FI, which helped found the TNFD and shape the recommendations.
“That is an important first step as we help banks and insurers to start aligning portfolios with the Kunming-Montreal Global Biodiversity Framework,” he adds, referring to a landmark global accord signed in 2022 by nearly 200 countries to protect and restore the natural world.
The TNFD’s recommendations have been supported by governments and the UN. But what makes them unique is that they have been spearheaded by businesses themselves, with hundreds of organizations weighing in.
“This market-led element is very important,” says Usher. “It has created broad buy-in, which is absolutely crucial if we are going to get a handle on information on nature-related dependencies, impacts, risks and opportunities.”
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