Environmentalist Andrew Mitchell’s idea of setting up the Global Taskforce on Nature-related Financial Disclosures (TNFD) has been endorsed by a number of major finance institutions, such as Barclays, Wells Fargo, BNP Paribas, AXA and UBS.
The taskforce launched last month and is planning to put together a framework to enable clients’ money to be directed in a manner which does not harm nature.
Its work started in September 2020 when an informal working group of 74 Members across 24 countries, including financial institutions, governments and regulators, was set up to put together a work plan.
The taskforce will consist of around 30 members, with an equal representation of financial institutions, corporates and data/service providers from developed and emerging markets.
Mr Mitchell, whose company Equilibrium Futures is advising Jersey Finance with its sustainability strategy, said that he hopes the initiative will become a ‘twin’ to the Global Taskforce on Climate-related Financial Disclosures, which has set up a framework to tackle climate change and gained global support.
He said: ‘If we do not change the movement of money, we will finance ourselves into extinction.
‘The TNFD framework presents a massive opportunity for the finance sector and corporate sector to work together to better understand their nature-related risks and opportunities.
‘The crash in biodiversity worldwide leaves our economy on the brink of a precipice, compounded by the invisibility of the value of nature in data used to make financial decisions by investors, lenders and insurers.
‘It is my hope that by 2023 the TNFD will offer a revolutionary framework to help redirect the world’s financial flows towards a nature-positive economy.’
The new initiative will aim to highlight the risk of investments that harm nature, on the basis that they are becomingly increasingly risky as governments make moves to protect the environment.
It claims that action for ‘nature-positive transitions’ could generate up to $10.1 trillion in annual business value worldwide and create 395 million jobs by 2030.
The TNFD will be chaired by financier David Craig, chief executive of Refinitiv, and Elizabeth Maruma Mrema, executive secretary of the United Nations Convention on Biological Diversity.
Ms Maruma Mrema said: ‘Science and economists are clear: nature is too big to fail. The health of the ecosystems on which we, and our economies, depend is deteriorating more rapidly than ever.
‘Over the next few years we will work with taskforce members, and other stakeholders, to design a framework that can be impactful and ultimately practical to companies and financial institutions.
‘We encourage a wide range of financial institutions and corporates to participate in the TNFD and to become early adopters of the TNFD framework when it launches in 2023.’
Mr Craig added: ‘Without urgent action, ongoing loss to biodiversity poses unprecedented risks for business, both now and in the future.
‘Better nature-related data that enables informed decision-making by financial institutions and companies is how we will solve the global ecological crisis.
‘Financial disclosures are essential to a market-based solution to nature loss. A properly functioning, informed market will price in risks appropriately and be empowered to channel investments to more sustainable opportunities.’
lFull interview with Andrew Mitchell in the Business on page 33.