HSBC, BlackRock, Nestle to help design nature-driven risk framework

September 30, 2021

By Simon Jessop

LONDON (Reuters) – HSBC, BlackRock and Swiss Re are among the companies seeking to create a risk management and disclosure framework aimed at moving capital away from activities that damage nature.

The Taskforce on Nature-related Financial Disclosures (TNFD) was launched in June to tackle nature loss, which it says poses significant risk to corporate and financial stability. It said on Thursday that senior executives from up to 35 companies would aim to create the new draft framework for launch in early 2022.

The TNFD will be voluntary and aims to follow in the footsteps of the Taskforce on Climate-Related Financial Disclosures (TCFD), championed by United Nations climate envoy Mark Carney and which is increasingly being made mandatory.

While TCFD requires companies to disclose risks connected to climate change, such as the impact of rising sea levels on a factory located near the coast, many of which are also connected to nature, the TNFD will go further in its scope.

Nature-related issues that could affect a company’s share price include those such as deforestation, water shortages or the potential hit to food producers if declining bee numbers impact the pollination of plants which they rely upon.

Alongside the other Taskforce members, which also include Nestle, Citi and Holcim, a further 200 institutions have expressed interest in joining the TNFD Forum, which will assist the work of the Taskforce.

“The business and financial world’s race towards net zero emissions will only succeed if they race equally fast towards nature-positivity,” TNFD Co-Chairs Elizabeth Mrema and David Craig said in a statement.

Each Taskforce member would be part of one of five working groups focused on defining nature-related risks, assessing the available data, looking at current standards and metrics, developing the beta framework and pilot testing it.

“The financial rationale for managing nature-related risks is increasingly clear now, but the information for identifying and acting on the risks in practice is not easily available,” Herry Cho, Head of Sustainability and Sustainable Finance, Singapore Exchange, said.

(Reporting by Simon Jessop; Editing by Alexander Smith)

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