The Taskforce for Nature-related Financial Disclosures (TNFD) that will launch in summer 2021 will provide a much-needed framework of pragmatic guidance to the finance sector and companies to assist them in understanding how best to measure, disclose and ultimately reduce nature-related risk. Financial institutions are encouraged to be engaged as members or as part of the larger stakeholder group.

However, the TNFD framework will take time to become fully operational. To facilitate progress now, financial institutions are encouraged to use existing tools to integrate risk assessment into decision-making now by: 

Click here to return to the Pathway for Action homepage, or to move on to Recommendation 2: Identify and focus on key sectors and geographies.

For a pdf of the full report click here.


Using the Natural Capital Protocol
Given the importance of water across Indian economy, YES BANK commissioned a report in 2017 to calculate the true value of water for an archetypal beverage company in Tamil Nadu using the Natural Capital Protocol. With data assumptions based on secondary research, the key results suggested that the extent of business, societal costs and benefits could potentially risk 98% of the beverage company’s revenue.

YES BANK concluded that there is a need to revisit the core elements of current business models to not only include financial risks, but the growing scarcity of natural capital and factor in the actual cost of natural resources in order to build sustainable and resilient businesses. The report was published to provide guidance for the business community.

YES BANK has also applied the Natural Capital Protocol’s Finance Sector Supplement on its green bonds to study their alignment to natural capital concerns and measure the impact and dependencies of the projects funded by these bonds.

Using the PBAF Standard
ASN Bank has been measuring and reporting on its impact on biodiversity since 2014. PBAF helps ASN Bank with answering important questions on how it can measure both positive and negative impact on biodiversity.

The bank’s experience with PCAF (the climate initiative that was also initiated by ASN Bank) has taught the bank about the importance of having a globally accepted standard for impact assessment and disclosure for financial institutions.

Moreover, the discussions with colleagues from other financial institutions in the process of developing the PBAF standard helps ASN Bank in gaining a better understanding of the challenges and solutions surrounding impact assessment and the ways in which the results can inform investment policies and decisions.

Using Science based Targets for Nature
The Church Commissioners for England recognised that there was no holistic framework for the assessment of impacts and dependencies on nature, and no widely recognised mechanism for companies to set targets to address them.

As a result, the Commissioners became the first investor to support the development of the Science based Targets for Nature framework. Widespread adoption will provide a consistent gold standard that will ensure companies take sufficient action, and that investors can easily recognise as the sign of a rigorous and ambitious target.

The framework encourages immediate action to assess exposure and prioritise action, whilst future progress tracking will enable peer comparison and assist capital allocation decisions.