Ecosperity 2024 spotlight: Keynote by TNFD | Video transcript

I will be brief on this first introduction because Peter, you already gave a beautiful overview of this.

But we know, as Peter mentioned from the planetary boundaries framework, that we are now outside of the safe space for our planet, not only in terms of climate change, but also five other boundaries.

And you can think of that as we have lived on a stable planet for thousands of years - and now we are pushing our planet outside that safe space, through climate change yes, but also biodiversity loss, nutrient cycles, land use change and so on.

So you can think of these as globally systemic risks. And we have, many of us have rightly been focused on climate change, but it is not the only risk, and it is also connected to all of these other risks.

So my own personal preference is not only to frame these as two sides of the same coin, climate and nature, but to think of ourselves as one planet and being outside of the safe space for planetary risks.

And this is now reflected in the Global Risks report that the World Economic Forum produces. Through that survey, you can see that global leaders, including in business, are recognising this.

So if you go back to 2006 (quite a long time ago), biodiversity was seen as an outlier and it didn't make it on the risks report. But for the last few years it is there prominently and you'll see it's framed in the context of environment.

Yes, biodiversity loss, but we are also looking at this in terms of ecosystem collapse because biodiversity is a characteristic of nature which is essential for it to be stable, resilient, able to adapt to change and able to produce all the different services which economic activity fundamentally relies on. So we need to see this in a holistic sense.

Fundamentally cash flows, which all of those you own business and finance will understand very well, are fundamentally reliant on the flows of these services that nature generously and mostly freely provides us. And so the unprecedented, as Peter emphasised, historically unprecedented biodiversity loss that we are now driving is pushing us into a domain where physical and transition risks for nature are manifesting themselves.

That is why the expectations of investors are growing that this be taken seriously. They are also growing from governments, as Peter mentioned, target 15 of the Global Biodiversity Framework driving all of this.

So it is recognising that the resilience of all economic activity, the prosperity of our own and future generations, fundamentally relies on the resilience and health of nature. So this is the overall framing for why this matters.

The TNFD (Taskforce for Nature-related Financial Disclosures), one of the acronyms in the alphabet soup, borrowing from our cousin organisation TCFD (Task Force on Climate-Related Financial Disclosures), was inspired by this situation to, as exactly as Peter said, build from the success of TCFD and develop - you could call it a framework - but it's basically a set of recommendations for what should be disclosed around nature and also guidance.

Because this is not just about disclosure. It is not just about compliance, as Peter emphasised. It's about assessing and managing these risks which are fundamental to business success, fundamental to your strategy, to your governance, to your risk management and ultimately to your bottom line.

In doing this, our theory of change is that through the uptake of the TNFD's recommendations and guidance, we will significantly shift global finance away from the activities that are driving that nature loss and driving those risks to your organisations, and towards investments that will help nature thrive and help economic activity thrive in the long term.

We are a market-led initiative. I mentioned two of our task force members - we have 40 task force members from all over the world, all real economy sectors who have major impacts and dependencies on nature, as well as financial institutions and market service providers like Singapore Exchange and PwC.

Part of my role as the technical director has been to really lean on the leading science and standards organisations. I know for many of you, the scientific credibility of what we're doing is very important, as well as its practical application, but also the interoperability with everything else that's out there.

Esther and I were talking this morning about GRI (Global Reporting Initiative), ISSB (International Sustainability Standards Board ) - so I'll talk about that in a moment.

But we have really built on the best of what's already out there. So it's like a consolidation to create one harmonised framework rather than recreating the wheel.

Although we are a market-led initiative, we have government support, we're both supported in the endorsed by both the G7 and the G20.

I will not go through them. You can see the list of organisations that are our task force members here.

But I would just like to emphasise, it goes well beyond the task force itself. We have a forum, and any organisation who is supportive of our mission can join the TNFD forum, and I encourage you to do so and go to our website and join.

We currently have 1400 members of the forum, and that allows you to stay in touch with what the task force is doing through webinars, through newsletters, but also to contribute to our work by providing input on our guidance and our further developments.

I will speak about this more in detail, but one really important principle of TNFD is to be really easily applicable by the market, which is why we have such a market focused design mechanism.

And that is why we had 240 pilot tests. These were amazingly generous organisations who were willing to “guinea pig” what we were developing as we were developing it, but helped us to realise what would be practical to apply.

Building from that, we were really pleased in January this year at Davos to announce 320 organisations who are already committing to adopt the TNFD recommendations by financial year 2024 or 2025.

We also have a number of regional consultation groups - we have one here in ASEAN - and we also work with data providers, because one of the common themes that comes up is, is the data available to do this. So we have been working with innovative data providers to challenge them about what is possible now and what is further needed to make this accessible and possible.

I will not be able to go through all the details within 15 minutes, but I will just give you a high-level overview.

What TNFD has developed is a sort of - even before you enter the details, it is a way of understanding nature. Many in the room will have a common language and a common way of understanding climate which is built from the greenhouse gas protocol, built from TCFD.

What TNFD has done is to draw together leading thinking to help you understand nature and how it matters to business. So one very initial example is to understand nature through 4 realms, which is basically showing that nature has fundamentally different components, land, ocean, freshwater and the atmosphere - which is where climate comes in, but also air quality, with people sitting at the centre.

It is an initial way of just understanding what can be an impenetrable topic.

Then at the centre of what we have produced is a set of disclosure recommendations.

As Peter said, we did do a cut and paste, although a huge amount of thinking goes into the detail of how you do that. We took the 11 TCFD recommendations, which many of you may have already reported on, and thought about how they translate to nature, what tweaks do we need to make and what do we need to add.

Before I go into a bit more detail of the guidance, it can be helpful to show where TNFD fits in that broader architecture.

And before I go through the architecture itself, it is helpful to just emphasise what TNFD is.

We are a voluntary initiative, market-led, that has a set of recommendations for the market from the market for what should be done and helpful practical guidance and tools. We are not developing a standard and we are not developing regulations - neither would be appropriate for us.

If you keep that in mind, what this diagram shows on the left is the Climate Reporting Architecture, building from the Paris Agreement through to TCFD and SBTi, through to the standard setters, the IFRS (International Financial Reporting Standards), ISSB and GRI.

Then regulators across different jurisdictions who will be developing the regulations. And at the bottom, fundamentally I am sure many in the room, the actual preparers and users of those reports.

So what we now see developing is that same structure for nature.

As Peter mentioned, the Global Biodiversity Framework sets that same harmonised set of global goals and targets. Yes, there are more than there were for the Paris Agreement, but there's a manageable number, agreed by 200 governments around the world.

TNFD has created that international framework like TCFD did. And learning from TCFD, we now see the uptake through three paths.

So first through standard setters - for example, we have worked closely with GRI and the ISSB from the very outset, learning from what they've done, drawing from what they've done, and now they are drawing from us.

So GRI’s updated biodiversity standards draw on TNFD’s recommendations. And ISSB, when they get to nature and they are currently considering that recommendation from their staff, will draw on TNFD's recommendations.

And then of course, there are regulators - and in one particular jurisdiction in Europe, they have moved extremely quickly - the European Sustainability Reporting Standards already draw on the TNFD recommendations, and we have worked closely with them in the last two and a half years to make sure that happened.

So very briefly, I will not emphasise this as Peter already emphasised it - fundamentally just for understanding of this issue, the way the TNFD is framed is to think about how organisations depend on nature for its services and have impacts on the quality and quantity of nature, and those can be both positive and negative.

That then creates risks for organisations, but also opportunities to benefit nature and benefit organisations, and this is the fundamental framing which runs throughout the whole TNFD framework.

We emphasise that impacts can be not only negative, but positive. We look at the five drivers of nature change and we use this framing throughout. This comes from IPBES (Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services), which is the global science body, the equivalent of the IPCC (Intergovernmental Panel on Climate Change).

Underpinning what we have - I do not want to overwhelm you with the details - but we heard from the market that nature is a new topic for many. It's a complicated topic.

So we have not only created the equivalent of TCFD, those disclosure recommendations at the top of this pyramid - we have also created a wealth of guidance and we're continuing to develop that to make it as easy as possible.

So please do not be overwhelmed, and if you have to read all of this, I would recommend starting with the ‘Getting started with TNFD guidance’. Then you can move to the LEAP approach, which has proved to be extremely useful for all those pilot testing organisations - that's a process for identifying and assessing your issues.

And then you can dive deeper into guidance we have by sector, by type of ecosystem, or in particular technical topics like engagement, target setting and scenario analysis.

But work your way through if you are new to this, our philosophy is very much get started and then you can increase your ambition over time.

These are the disclosure recommendations themselves. You probably will not be able to see the details and I do not have time to go through the details. But I just wanted to emphasise what Peter and I have already made clear that this is really building on TCFD. We've also made it consistent with the language of S1 and S2 to create that consistency with ISSB for when they are ready to develop that standard, as well as the Global Biodiversity Framework.

These are the three new disclosures that the task force felt, for nature, you really need to think about place specifics. So these new disclosures go to these questions about where things are happening, where in your value chain, where geographically are my issues happening and am I engaging with the people in those places who are also affected, in particular indigenous peoples and local communities.

This gives you just a little bit of a flavour like Peter did of the logos - it is not completely comprehensive, but of the many giants whose shoulders we stood on to do this.

It has been a really fun, creative exercise of consolidating the best of what already existed from standards like GRI, SASB, CDP, on metrics; also from the natural capital protocol which provides the assessment guidance we have built on; the science based targets network which has helped with target setting methods, and much more.

So this is an integration exercise, not something separate - It is really important to see that it is building on what is already out there.

I will not be able to go through the details, but I was just discussing with Peter before we began, that it can be often overlooked that TNFD has also produced a measurement architecture, because we do not have the equivalent of the Greenhouse Gas Protocol.

We have gone to great efforts, and this was the technically most difficult piece of work we did in the last two years, to outline the indicators and metrics that would be useful for you to assess, and for disclosure.

The reason this is shaped like a funnel is, to put in reality what Peter said - do not boil the ocean.

We knew organisations do not want thousands of metrics, but two and a half years ago we did an assessment of all the metrics out there. We came to 3000, and I said, right, stop counting - we now have to create a consolidated, harmonised way of unifying all of this.

So the LEAP approach provides various different indicators and metrics for assessment, and then you can borrow down to a smaller set for disclosure.

This diagram shows the bottom of that funnel where we have a small set of 14 core global metrics, which are then specified at the sector level in more detail, as well as additional metrics which are voluntary - if they are material issues for you, you can use them.

So we have helped to try to create this consistency, comparability and practicality.

I already mentioned this, but just to conclude, we are really excited by the early adoption of TNFD. As I mentioned in Davos, we announced these initial 320 organisations. Since then we've had 55 more - so we're now at 375 and growing all the time.

We hope at COP (there will be) 16 to give another celebration announcement.

I would just like to emphasise the really strong uptake in Asia and the Pacific, particularly in Japan, but also here in Singapore, in Taiwan and elsewhere.

There is strong uptake from financial institutions - we have 100 financial institutions in this firs cohort.

So I think we will talk about this on the panel, I know I've run out of time.

We have plenty to get you started in this ‘Getting started with TNFD guidance’ I already mentioned. We also recently launched TNFD in a box, which is a set of PowerPoint presentations you can use for capacity building internally, or for consultants to help build capacity.

We work with Foraco, which is an Australian-Tasmanian forestry company, to do a very initial set of combined TNFD and TCFD disclosures to learn from.

But you now have increasingly sophisticated examples like Esther An from CDL, and elsewhere, to learn from as you go.

Finally, our next phase of work. (maybe I'll skip to how it's coming together)

We are now focusing on the sector piece. We know that for many to make this practical, it needs to be specified for your sector. So we are finalising our sector guidance, including those sector metrics.

We are also starting to look at transition planning and how nature enters into transition planning, both for net zero, but also for nature goals; and increasing our engagement, our work to embed into standards and to build capacity, as well as looking at data.

I mentioned we have been working on data all this time, but mostly from an analytics tools perspective. We are now exploring the need for a global public data facility inspired by the NZDPU (Net-Zero Data Public Utility) - what could be the equivalent for a nature, a public data facility to make this accessible worldwide.

So with that, thank you very much and please do let us know if you have any questions.