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Taskforce on Nature-related Financial Disclosure

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TNFD Publishes Additional Sector and Value Chain Guidance

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The Taskforce on Nature-related Financial Disclosures (TNFD) has released additional guidance covering eight real economy sectors, updated additional guidance for financial institutions, and guidance on value chains. These resources are designed to help companies implement the TNFD Recommendations more effectively. The TNFD Recommendations are structured around four core pillars: (i) Governance, (ii) Strategy, (iii), Risk and Impact Management, and (iv) Metrics & Targets. They are aligned with the International Sustainability Standards Board’s IFRS Sustainability Standards, which incorporate the Task Force on Climate-related Financial Disclosures recommendations (see our earlier bulletin here). Additionally, the TNFD Recommendations support the goals and targets of the Kunming-Montreal Global Biodiversity Framework (see our earlier bulletin here). TNFD also announced that it has experienced a surge in adoption, with a 30% increase in companies implementing its reporting recommendations since January. This growth is attributed to 96 additional firms committing to TNFD’s nature-related disclosure framework, bringing the total number of committed firms to 416. This bulletin provides a brief overview of the TNFD’s additional guidance and important information about ongoing stakeholder consultations. Additional sector guidance. The TNFD recognizes significant sectoral differences for corporations implementing the TNFD’s ‘LEAP’ (Locate, Evaluate, Assess and Prepare) approach. To address this variation, it has provided additional sector-specific guidance that is supplemental and intended to complement the TNFD’s Guidance on assessment of nature-related issues: the LEAP approach. The additional guidance offers detailed instructions on applying the TNFD core global disclosure metrics, core sector metrics, and the LEAP approach within the following sectors: Aquaculture; Biotechnology and Pharmaceuticals; Chemicals; Electric Utilities and Power Generators; Food and Agriculture; Forestry and Paper; Metals and Mining; and Oil and Gas. Additional guidance for financial institutions. The updated additional guidance for financial institutions (version 2.0) provides additional guidance for financial institutions to apply the TNFD Recommendations, and is applicable to…

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G7 Climate, Energy, and Environment Ministers Commit to Urgent Action on Climate Change

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The Group of Seven (G7) recently published the Climate, Energy and Environment Ministers’ Meeting Communiqué following the G7 Ministers’ Meeting on Climate, Energy and Environment held last week in Turin, Italy. This marked the first meeting of G7 climate, energy and environment ministers (the Ministers) since COP28 last November and included renewed commitments on strengthening energy security, greenhouse gas (GHG) emission reduction, limiting global temperature increases to 1.5°C, and the imperative of transitioning to cleaner energy sources for economic growth and climate resilience. We view the Ministers’ renewed dedication to energy transition as the meeting’s most significant outcome, although it is important to note that countries heavily reliant on coal maintain some degree of flexibility. This bulletin briefly highlights key commitments made by the Ministers. Carbon Markets. Key carbon market commitments include: work jointly towards delivering robust outcomes from the Work Programme on Article 6 at COP29 in Baku, Azerbaijan later this year; explore innovative options for carbon markets and carbon pricing to contribute to mobilizing public and private contributions to climate finance; and  enhance demand and robust certification standards for carbon dioxide removals.  Energy. Key energy commitments include: phase out existing unabated coal power generation in energy systems during the first half of 2030s or in a timeline consistent with keeping a limit of 1.5°C temperature rise within reach, in line with national net-zero pathways; setting a global target of reaching 1,500 GW of energy storage in the electricity sector by 2030, six times more than in 2022;  reduce demand for and use of fossil fuels, including by rapidly scaling-up clean technologies in power generation, transportation and other end users; and phase out inefficient fossil fuel subsidies, with all countries committing to a progress report in 2025, when Canada will have the Presidency of the G7 (read our earlier bulletin on Canada’s inefficient…

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TNFD Announces Taskforce Members

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The Taskforce on Nature-related Financial Disclosures (TNFD) recently announced the 33 “Members of the Taskforce”, including senior executives from financial institutions, corporates, and market service providers. The Taskforce is working on developing a TFND risk management and disclosure framework, to be released in 2023, for organizations to report and act on nature-related risks. The TNFD is built on seven principles/themes: (1) market usability; (2) science-based; (3) nature-related risks; (4) purpose-driven; (5) integrated and adaptive; (6) climate-nature nexus; and (7) globally inclusive. The TNFD is assisted by more than 100 institutions, including the following Canadian institutions: BMO Financial Group, CPP Investments, the Intact Centre on Climate Adaptation, Mining Association of Canada, the Nature Conservancy of Canada, and WSP Global Inc. For further information or to discuss the contents of this bulletin, please contact Lisa DeMarco at lisa@resilientllp.com.

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