Featured Product

    TNFD Issues Nature-Related Risk Management and Disclosure Framework

    March 15, 2022

    The Taskforce on Nature-related Financial Disclosures (TNFD) published an initial beta version of the framework on nature-related risks, opportunity management, and disclosures. The Taskforce also released a discussion paper on assessment of nature-related data and analytics availability; the paper sets out a landscape mapping of data platforms and sources, along with two case examples of how data and analytics can be used in the TNFD nature-related risk and opportunity assessment process.

    The TNFD framework seeks to provide recommendations and guidance on nature-related risks and opportunities relevant to a wide range of market participants, including investors, analysts, corporate executives and boards, regulators, stock exchanges, and accounting firms. The Taskforce has developed a framework, through an open innovation approach, that will ensure its final recommendations are both science-based and practical to implement by market participants globally. The beta version of the framework represents the beginning of the consultation and pilot testing with market participants and will be open for feedback from market participants. The feedback and testing approach of the Taskforce will inform subsequent releases of beta versions through 2022 and 2023 and the finalized recommendations schedule to be published later.

    TNFD intends to align its recommended disclosures closely to those of the Task Force on Climate-related Financial Disclosures (TCFD), to facilitate and encourage a move toward integrated disclosures. The initial beta version of the TNFD framework includes three core components which are as follows:

    • An outline of fundamental concepts and definitions—TNFD recommends that market participants use these when assessing and disclosing their nature-related risks and opportunities. TNFD’s definition of nature-related risks includes longer-term risks presented by nature-related dependencies and nature impacts. Similarly, TNFD has defined nature-related opportunities as activities that create positive outcomes for organizations and nature by avoiding or reducing impact on nature or contributing to its restoration.
    • Draft disclosure recommendations for nature-related risks and opportunities—The draft recommendations follow TCFD’s four pillars of disclosure: governance, strategy, risk management, and metrics and targets. The draft recommendations include four general requirements that disclosures should be based on: assessment of nature-related dependencies and impacts; consideration of location; consideration of capabilities for nature-related risk and opportunity assessment and management; and a statement of the scope of disclosures and what will be covered in future disclosures.
    • Guidance for nature-related risk and opportunity assessment—TNFD has developed a first version of an integrated nature-related risk and opportunity assessment process, called LEAP (Locate, Evaluate, Assess, Prepare). The LEAP approach is voluntary guidance intended to support internal nature-related risk and opportunity assessments within corporates and financial institutions, which should in turn inform strategy, governance, capital allocation and risk management decisions, including disclosure decisions aligned with the TNFD’s draft disclosure recommendations.

    TNFD intends to release additional material on these topics in the subsequent releases: climate-nature nexus; scenario approach, guidance, and timeframe; approach to materiality; social dimensions; sector-specific guidance; and data, metrics, and targets for nature-related risk and opportunity management and disclosure. The open consultation period will continue until June 30, 2023. Organizations can provide feedback on this first beta version as well as subsequent beta versions planned for release in June 2022, October 2022, and February 2023. This will culminate in the final release of the TNFD recommendations (v1.0) planned for September 2023.

     

    Related Links

     

    Keywords: International, Banking, Climate Change Risk, ESG, Disclosures, Nature-Related Risk, TNFD Framework, Reporting, TCFD, TNFD, Headline

    Featured Experts
    Related Articles
    News

    US Agencies Issue Several Regulatory and Reporting Updates

    The Board of Governors of the Federal Reserve System (FED) adopted the final rule on Adjustable Interest Rate (LIBOR) Act.

    January 04, 2023 WebPage Regulatory News
    News

    ECB Issues Multiple Reports and Regulatory Updates for Banks

    The European Central Bank (ECB) published an updated list of supervised entities, a report on the supervision of less significant institutions (LSIs), a statement on macro-prudential policy.

    January 01, 2023 WebPage Regulatory News
    News

    HKMA Keeps List of D-SIBs Unchanged, Makes Other Announcements

    The Hong Kong Monetary Authority (HKMA) published a circular on the prudential treatment of crypto-asset exposures, an update on the status of transition to new interest rate benchmarks.

    December 30, 2022 WebPage Regulatory News
    News

    EU Issues FAQs on Taxonomy Regulation, Rules Under CRD, FICOD and SFDR

    The European Commission (EC) adopted the standards addressing supervisory reporting of risk concentrations and intra-group transactions, benchmarking of internal approaches, and authorization of credit institutions.

    December 29, 2022 WebPage Regulatory News
    News

    CBIRC Revises Measures on Corporate Governance Supervision

    The China Banking and Insurance Regulatory Commission (CBIRC) issued rules to manage the risk of off-balance sheet business of commercial banks and rules on corporate governance of financial institutions.

    December 29, 2022 WebPage Regulatory News
    News

    HKMA Publications Address Sustainability Issues in Financial Sector

    The Hong Kong Monetary Authority (HKMA) made announcements to address sustainability issues in the financial sector.

    December 23, 2022 WebPage Regulatory News
    News

    EBA Updates Address Basel and NPL Requirements for Banks

    The European Banking Authority (EBA) published regulatory standards on identification of a group of connected clients (GCC) as well as updated the lists of identified financial conglomerates.

    December 22, 2022 WebPage Regulatory News
    News

    ESMA Publishes 2022 ESEF XBRL Taxonomy and Conformance Suite

    The General Board of the European Systemic Risk Board (ESRB), at its December meeting, issued an updated risk assessment via the quarterly risk dashboard and held discussions on key policy priorities to address the systemic risks in the European Union.

    December 22, 2022 WebPage Regulatory News
    News

    FCA Sets up ESG Committee, Imposes Penalties, and Issues Other Updates

    The Financial Conduct Authority (FCA) is seeking comments, until December 21, 2022, on the draft guidance for firms to support existing mortgage borrowers.

    December 20, 2022 WebPage Regulatory News
    News

    FSB Reports Assess NBFI Sector and Progress on LIBOR Transition

    The Financial Stability Board (FSB) published a report that assesses progress on the transition from the Interbank Offered Rates, or IBORs, to overnight risk-free rates as well as a report that assesses global trends in the non-bank financial intermediation (NBFI) sector.

    December 20, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8697