This is often referred to as an ‘enterprise value’ approach. For example, a loss of bee populations may add to new costs to agribusiness for pollination. TNFD’s proposed framework will only require businesses to self-report on financial risks and opportunities for the business itself - in this case, those that may arise from its relationship with nature in the short, medium or long-term.
This is particularly relevant given TNFD’s relationship with ISSB. A lack of transparency can also allow a bank or company to privately advocate for TNFD to adopt positions that contradict its own stated commitments to act on nature loss and related human rights abuses.Ī recent example from a consultation by another reporting initiative - the International Sustainability Standards Board (ISSB) - shows the difference that transparency makes. Anecdotally, we know that the victims of corporate-led nature harms are grossly under-represented compared to corporations who may be perpetrating or profiting from such harms. Greater transparency would provide data on how deep these biases run. While TNFD can give the appearance of seeking views from diverse voices, a Forests & Finance analysis shows deep inequalities in who it pursues feedback from. Members also include Bank of America - one of the largest fossil fuel financiers, as well as BlackRock which has been described as the ‘world’s largest investor in deforestation’. There is BNP Paribas which earlier this year signed onto a massive loan to TotalEnergies whose East Africa Crude Oil Pipeline could negatively impact 2,000 square kilometers of protected wildlife habitat and has involved serious violations of local people’s human rights. TNFD taskforce members include HSBC and Rabobank which since the Paris Climate Agreement are each estimated to have made tens of millions of dollars in profit off the back of multi-billion dollar financing to an array of companies linked to deforestation and human rights abuses. This issue is likely to haunt TNFD long into the future and the lack of transparency doesn’t help. Global corporations writing the template of their own future regulations is an extremely concerning precedent. CSOs have expressed alarm that UN agencies are backing such a process, particularly given TNFD’s aim to influence future regulation, including through talks on a new global biodiversity agreement. As TNFD’s decisions are controlled by a taskforce made up solely of 34 senior staff from global corporations it is particularly susceptible to criticism that decisions are led by self-interest rather than evidence. The role of transparency in decision-making processes is extremely well established. While various serious concerns about TNFD have been raised - including that it is far removed from the measures that environmental defenders and the victims of corporate-led harms are calling for - this article focuses on the lack of transparency, why it matters and basic steps that TNFD should adopt to start to lift its veil of secrecy.
THE DAY BEFORE DISCLOSURE HOW TO
While TNFD claims to be ‘science-based’ – in that it refers to datasets on how to measure nature and biodiversity – it is not ‘evidence-led’ in that it appears to have dedicated little research or rigor to identifying which types of requirements contribute to change from business, which don’t, and which decision-making structures result in sound outcomes. (To learn more about TNFD see the Forests & Finance webpage here.) As the global community becomes increasingly aware of the trillions of dollars in financing that are driving the nature crisis, TNFD posits that better corporate reporting will help solve the problem. TNFD is a voluntary initiative but aims to become the de facto standard for business reporting on nature. What is said in these submissions - the concerns they raise, the evidence they point out, the recommendations and options they suggest to TNFD or even the spurious arguments made by those seeking to protect their own self-interest - will never be made public. This is part of an 18-month process that will result in a framework on how businesses, including banks and other financiers, should publicly self-report on nature-related risks. This 23 September will be the last day that the Taskforce on Nature-related Financial Disclosures (TNFD) will accept feedback on the second of four planned drafts of its proposed framework. Blog by Shona Hawkes at Rainforest Action Network.
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