Posted on August, 28 2020

We rely on nature for everything from our daily essentials - food, clean water, energy and materials – to culture and well-being. It’s intrinsic benefits are far reaching, and the World Economic Forum estimated its monetary value to be equivalent to $125 trillion.

But whilst demand for nature’s products and services has grown, in the past century, the biocapacity of the planet to meet this demand has decreased.

WWF’s Living Planet Report 2020 found that populations of wild species have declined on average by 68% since 1970. One million animal and plant species are now threatened with extinction, according to a study from IPBES (2019), more than ever before in human history. And the World Economic Forum states that 'humanity has already wiped out 83% of wild mammals and half of all plants and severely altered three-quarters of ice-free land and two-thirds of marine environments'.

This catastrophic loss of nature and biodiversity, and the knock on consequences for our natural world, are a source of systemic risk and instability for markets and the financial system, and they already affect countries, companies and financial institutions.

"The twin climate change and nature loss crises are affecting our economies and societies significantly, and the dual health and economic crises of COVID-19 have further highlighted our broken relationship with nature", says Margaret Kuhlow, WWF’s Global Finance Practice Lead and interim Global Conservation Director.

Despite their material influence on society and economies, these risks and impacts are rarely measured and disclosed, and largely excluded from corporate and financial decision-making, regulation and supervision.

In May 2019, WWF together with AXA submitted a report to the G7 Environment Ministers, laying out the financial risks from biodiversity loss and calling for the establishment of a taskforce on how to measure them. In subsequent reports, WWF has elaborated how to understand and assess nature-related risks to companies and financial institutions.

An initiative to establish a Taskforce on Nature-related Financial Disclosure (TNFD) was announced in July 2020 by a coalition of partners including Global Canopy, UNDP, UNEP Finance Initiative and WWF. It is supported by financial institutions like AXA, BNP Paribas, DBS Bank, Rabobank, First Rand, Yes Bank, Storebrand as well as the governments of UK, France, Netherlands and Switzerland. Other partners have since joined an Informal Working Group (IWG) with 60+ members, which has started to scope the mandate and governance of the formal TNFD.

Launch of TNFD is planned for early 2021 and will be tasked with delivering a framework to guide nature-related financial disclosure by the end of 2022. Until its formal launch, coordination of the initiative is shared between the IWG co-chairs and the four initiating partners. UNDP is managing the exchange with the IWG while WWF is leading on an application for funding to the Global Environment Facility (GEF), which together with co-financing from partners will take the initiative through the 2021-2022 phase.

Companies, financial institutions, governments and relevant experts are encouraged to support the call for the TNFD, and welcome to get in involved in the initiative.

"We are pleased to see this group of financial institutions join the search for solutions by identifying nature-related risks and dependencies that materially affect their portfolios. This crucial information will enable financial institutions to better incorporate nature in their decision-making, and help to shift finance away from destructive activities and toward those business activities that support the nature we rely on for our own health as well as the health of our economies."

Further Information

• Hugo Bluet, Head of Green Finance, WWF France hbluet@wwf.panda.org
• Magnus Emfel, Finance Engagement Manager, WWF International magnus.emfel@wwf.se