The Taskforce on Nature-related Financial Disclosures (TNFD) and Glasgow Financial Alliance for Net Zero (GFANZ) have each published draft guidance on nature transition planning for companies and financial institutions. The TNFD’s discussion paper builds on existing market practice and experience with net zero transition planning, outlining guidance for both companies and financial institutions. It is open for feedback until 1 February 2025, with finalised guidance published due later in the year. “Every business has impacts and dependencies on nature,” said Emily McKenzie, TNFD’s Technical Director. “They also face growing physical, transition and systemic risks as the resilience of nature underpinning our economies and societies continues to erode. It is now critical for organisations to consider the concrete actions they are going to take to address those issues – for [their own] benefit and to contribute to the achievement of nature-positive outcomes as called for by the Global Biodiversity Framework.” Meanwhile, the GFANZ guidance – open to feedback until 27 January 2025, with a final report expected by end of Q1 next year – focuses on incorporating nature into the net zero transition plans of financial institutions only. It builds on GFANZ’s existing guidance on climate transition plans, in a bid to “fast-track” awareness of nature as a critical tool to effectively contribute to combatting climate change. The guidance focuses on three main actions: the reduction of nature-related greenhouse gas (GHG) emissions; the protection and increase of nature-related GHG sinks; and embedding nature-related considerations into approach and planning. “We feel that the [TNFD and GFANZ] reports are complementary and will be excellent strategic resources for investors and the private sector,” said Hans Mehn, Partner at Generation Investment Management. “Investors have many reasons for taking action on nature to manage risks and opportunities in their portfolios, including: net zero commitments, adoption of TNFD recommendations, emerging legislation and requirements under disclosure standards [like the International Sustainability Standards Board].”
