Top Firms HSBC, Nestle BlackRock to Develop Nature-Drive Risk Framework

Leading companies including BlackRock, HSBC and Nestle are working to create a unique risk management and disclosure framework which shifts capital towards environment-friendly business activities.

In June, The Taskforce on Nature-related Financial Disclosures TFD was launched to assess and minimize the loss of nature. Senior executives from over 30 corporations have pledged to create such as framework to help preserve the environment.

The TNFD framework is similar to the Taskforce on Climate-Related Financial Disclosures TCFD which is led by Mark Carney, UN Special Envoy on Climate Action and Finance. Although TNFD is not mandatory for corporations to follow, firms are still required to disclose important financial information and risk linked directly to climate change including rising sea levels and coastal factory locations.

Any climate or nature issue which may have an effect on company shares or its financial situation must be put forward. Water shortages, deforestation, and other such risks which could impact a company’s production levels must be addressed.

TNFD Co-Chairs Elizabeth Mrema and David Craig released a statement saying, “The business and financial world’s race towards net zero emissions will only succeed if they race equally fast towards nature-positivity.” Around 200 more institutions have announced to join the TNFD and provide assistance in various fields.

The Taskforce will comprise of five working groups which will be assigned tasks related to nature such as assessing data, developing beta framework, pilot testing the data and defining standards or metrics. Herry Cho from Singapore Exchange said, “The financial rationale for managing nature-related risks is increasingly clear now, but the information for identifying and acting on the risks in practice is not easily available.”

©Photo: ft