Sustainability

Issue 1223 / 21 September 2023

Taskforce on Nature-related Financial Disclosures

Nature-related financial disclosures - TNFD publishes recommendations - 19 September 2023

The Taskforce on Nature-related Financial Disclosures (TNFD) has published its final recommendations (the Recommendations) on its proposed risk management and disclosure framework for nature-related risk issues.

The TNFD stresses the need for organisations to consider nature a core and strategic management risk issue, alongside climate change, that must be addressed. In light of this, the TNFD provides 14 recommendations to help businesses, including financial institutions, identify and, if necessary, disclose nature-related risk issues.

The Recommendations have been developed to be consistent with the International Sustainability and Standards Board (ISSB) standards, the Global Reporting Initiative’s standards and the Task Force on Climate-related Financial Disclosures (TCFD). They are grouped into the same four pillars adopted by the TCFD (governance; strategy; risk and impact management; and metrics and targets). They also align with global policy goals and targets, including the Global Reporting Initiative’s Standards.

The TFND states that it will move into the next phase of its work to encourage and scale voluntary market adoption of the Recommendations by expanding market awareness, market engagement and supporting market capacity building efforts.

Recommendations of the Taskforce on Nature-related Financial Disclosures

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Executive Summary

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Glasgow Financial Alliance for Net Zero

Transition finance strategies - GFANZ publishes consultation - 19 September 2023

The Glasgow Financial Alliance for Net Zero (GFANZ) has published a consultation (the Consultation) on defining transition finance and consideration for decarbonisation contribution methodologies. The Consultation builds on GFANZ’s published work in 2022, including its November 2022 report on a recommended pan-sector framework for net zero transition planning.

GFANZ defines ‘transition finance’ as “investment, financing, insurance, and related products and services that are necessary to support an orderly real-economy transition to net zero”. However, it considers that transition finance requires common definitions and methodologies to ensure real-economy decarbonisation, and to help financial institutions independently identify their risk exposures and investment opportunities.

The Consultation seeks feedback on a principles-based approach to enable segmentation of a portfolio under each of GFANZ’s key financing strategies. The principles are designed to be voluntary, pan-sector and globally applicable. They build on previous GFANZ publications, existing practices, transition finance frameworks and potential decarbonisation contribution methodologies.

The Consultation closes on 2 November 2023. Feedback received will inform GFANZ’s final report, which will be published ahead of COP28 at the end of November 2023.

GFANZ Consultative Document: Defining Transition Finance and Consideration for Decarbonisation Contribution Methodologies

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