Navigating environmental, social, and governance (ESG) requirements can be a challenge. Most of those challenges and solutions have been focused on the climate. But what about nature more broadly? The Taskforce on Nature-Related Financial Disclosures (TNFD) framework looks to provide guidelines and data so that companies can measure and ultimately reduce risk and impact on the world around us.
Q: What key data elements should the Taskforce on Nature-Related Financial Disclosures (TNFD) framework provide for ESG for nature?
Megan Pillsbury, Vice President of Business Development for The Climate Service, S&P Global Sustainable1
Similarly to how the Taskforce for Climate-Related Financial Disclosures, the TCFD, was established to start the discussion and create a framework for companies to start measuring climate risk, the Taskforce for Nature-Related Financial Disclosures, or TNFD, is currently being drafted.
The framework itself is still in development, with an expected publication date next year, and a consultation is underway. Luckily, the taskforce is trying to align as closely as possible to the TCFD approach, and they are looking both at the company's impact on nature, and also the dependencies on nature and risks related to those dependencies.
Nature is being defined as everything else that's not climate, basically, water health, air quality, and land quality. Biodiversity is another huge aspect. There's this concept of the blue economy: the benefits we get from a healthy ocean.
And when I looked at this a few months ago, the financial benefits that we get from nature are around double the size of our actual global GDP. Nature's value is massive to humans, even to business and the economy.
This framework is meant to try to quantify the value of that and how you identify the value of a particular forest. And if that forest is degraded, what's that cost to us? But more specifically, when it comes to individual companies and their footprints and dependencies on nature, it's the same thing. If fisheries can't fish anymore, fish can't be grown in the waters anymore, that food source disappears, which has important ramifications for food systems, let alone the company dependent on those waters.
So the TNFD aims to get companies looking at their own nature footprints and their dependencies on nature. And S&P Global is gathering additional data sources, information, and insights related to nature in addition to climate and other ESG areas.