Building Bridges 2023 – Between Finance and Nature – Part 1: TNFD

In this article series, I want to highlight my key take aways from Building Bridges 2023 in Geneva, Switzerland. It was for me the first time I attended this annual gathering. With a special focus on “Nature”, the program allowed me to spend two days attending presentation, debates and workshops and meeting an incredible number of people working internationally at the intersection of sustainable finance and nature investing.

TNFD is here!

For me, Building Bridges began on the second day, with a high-level plenary of members of Taskforce on Nature-related Financial Disclosures (TNFD) on the dependence of their companies on nature, and the readiness of their companies to report on this. TNFD is a conglomerate of 40 senior executives from financial institutions, corporates, and market service providers with a market capitalisation of over US$2.3 trillion, over US$20.6 trillion in assets under management and offices in over 180 countries.

There is a wealth of TNFD implementation guidance

Emily McKenzie , the Technical Director for TNFD, explained the set of 14 recommended nature-related financial disclosures, akin to the guidance received in 2017 by TCFD, the Taskforce for Climate-related Financial Disclosures. She showcased the consistency between the two frameworks, and how it is therefore easy to implement if you are already familiar with and applying TCFD. Furthermore, she mentioned the wealth of guidance on how to assess impact and dependencies on nature and identify the resulting risks and opportunities for your business.

The financial sector as catalyst for a nature-positive economy

Judson Berkey , Managing Director in the Chief Sustainability Office at 瑞银集团 , explained how the financial sector can play a catalytic role in halting the loss of nature by being a facilitator in the transformation of the economy towards more nature-positivity. He also shared details about the sector guidance for the financial sector, which includes first steps to start from, as well as a collection of all various examples of financial institutions already acting, and what can be learned from them.

Ecosystem collapse places 20% of companies globally at risk

Nora Ernst , Senior Sustainability Risk Manager at Swiss Re , gave the motivation of a large insurance company to take part in TNFD: Twenty percent of all companies (and their business models) globally are at risk from ecosystem collapse, and risk being the core business of Swiss Re. Furthermore, she explained how ecosystems are becoming an insurable asset, for example coral reefs or reforestation efforts.

TNFD allows identifying and acting on impacts and dependencies

Alison Bewick , Global Head of Group Risk Management at 雀巢 started off with explaining how nature is absolutely imperative for their business model. The raw agricultural materials depend on a healthy planet, and thus on a stable climate, healthy ecosystems, and abundancy of biodiversity. Similar to Swiss Re, for Nestlé it was also a journey, coming from TCFD, but going beyond disclosures towards understanding and thus steering strategic discussions around risks and opportunities for the company business model. For example, they understand, that more nutrient rich soil is more resilient to climate change and thus also provides more security to the livelihood of farmers. Nestlé sees climate and nature as one, and thus focusses on soil as key element in their integrated carbon and biodiversity strategy, for example through premium for farmers that move towards regenerative agriculture.

Nature needs to be on the C-Level Agenda

Renata Pollini , Head of Nature at 拉法基 , first spoke about more details of TNFD. She explained the LEAP approach:

·???????? Locate your interface with nature.

·???????? Evaluate your dependencies and impacts.

·???????? Assess your risks and opportunities.

·???????? Prepare to manage the risks and report.

Then she layed out the categorization of the fourteen recommended disclosures around governance, strategy, risk, and impact management as well as metrics and targets.

In a second step she detailed how Holcim, a cement producer, applies the double-materiality lens to their disclosures towards their stakeholders. In an example, she explained how Holcim is not dependent on biodiversity in their business model, yet is aware, that through extraction of raw materials they have a significant impact on biodiversity. Then she explained how nature risk reporting is currently not yet mandatory across all countries they work in, but that a strategy is underway to align nature risk reporting with other mandatory reporting such as compliance.

A first step to halting nature loss

Knowing that a large business-driven reporting framework is now out there, and is also being applied by large organizations gives me a slight relief and a positive perspective for the next years to come, if we want to turn around global biodiversity loss and regenerate the basis of our very existence: our ecosystems and the services they provide.

Over the next weeks I want to continue sharing the latest news from Building Bridges 2023. Stay tuned for more, and I am happy to receive your comments and questions below.

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