From a survey of 850 companies, financial institutions and service providers,TNFD found that 86 per cent of Asia Pacific respondents are using or planning to use the TNFD framework to inform their nature-related reporting.This is followed by 69 per cent from Europe and 68 per cent from Latin America.
Asia Pacific’s growing support for nature-related disclosures and the taskforce’s work is because companies are “preparing for new voluntary standards and mandatory requirements”, said TNFD, following the Kunming-Montreal Global Biodiversity Framework (GBF) agreement at COP15. The framework’s targets to halt and reverse biodiversity loss by 2030, including protecting 30 per cent of land and sea areas affects the region, which is one of the most biodiverse and ecologically threatened areas in the world. It is home to 17 of the 36 global biodiversity hotspots and 7 of the 17 megadiverse countries like China, Indonesia, the Philippines, Malaysia, and Australia.
China, which co-hosted COP15, had the highest percentage of global companies reporting against a nature metric, according to Bloomberg data cited by TNFD. Out of more than 16,800 companies analysed, 9.2 per cent of Chinese firms reported on nature, followed by 6.2 per cent of firms in the United States and 5 per cent in Japan.
The growing global focus on nature-related assessments is driven by increasing policy and regulatory attention, according to the study. Even before COP15’s GBF, the Network for Greening the Financial System (NGFS), a group of over 125 central banks that share best practices and contribute to the development of environment and climate, had already been advocating for nature-reporting, noted the research.
Out of 850 companies, financial institutions and and service providers surveyed that use or plan to use nature-related disclosure to inform their reporting, 86 per cent are from Asia Pacific. Image: TNFD
Another driver for the surge in nature-reporting is investor concern, where lenders “increasingly see nature beyond climate as a source of financial risk and new commercial opportunities emerging from understanding nature,” a TNFD spokesperson told Eco-Business.
More than 50 per cent of investors the TNFD surveyed said they are “very concerned” about the impact of nature loss on financial markets.
It cited findings of London-based charity Share Action that 30 per cent of asset managers have published an assessment of the direct impacts and dependencies from their investments on biodiversity out of an analysis of 76 of the world’s largest asset managers. Additionally, PRI Spring Initiative and Finance for Biodiversity Foundation, organisations advocating for global leaders to protect biodiversity through their finance investments, have begun rolling out specific executive education and training programmes on nature-related assessment and risk management for asset owners and asset managers.
Broader nature-related disclosures
The TNFD report also noted how a much larger number of companies may also be making nature-related disclosures that are not currently associated with taskforce.
Citing data from global nonprofit Carbon Disclosure Project (CDP), the research showed that legacy reporting of past data on water, waste and forestry issues through the CDP platform means that a large number of companies already underway with nature-related reporting.
CDP, an independent environmental disclosure system, cited the United States as having the most companies that meet at least one TNFD disclosure recommendation, followed by Japan and China.
“It underscores the opportunity to encourage these companies and financial institutions to build on what they are already doing and embrace the integrated approach to nature-related assessment and reporting advocated by the taskforce,” read the study.
