ESG: TNFD consults on third draft of beta disclosure framework

On 4 November 2022, the Task Force on Nature-related Financial Disclosures (TNFD) released the third draft version of its disclosure framework for consultation.

Version 0.3 forms part of an 18-month consultation and development programme leading in time to a framework which enables organisations to report and act on evolving nature-related risks.

The aim of the TNFD’s programme is to support a “shift in global financial flows away from nature-negative outcomes and towards nature-positive outcomes.”

Read more about the TNFD, the framework and version 0.2 in our March and July 2022 reporting.

What does Version 0.3 cover?

The latest beta version incorporates further updates and enhancements, including;

• expansion of the draft disclosure recommendations to incorporate dependencies and impacts on nature alongside risks and opportunities to the organisation;
• proposed new supply chain traceability disclosure recommendations;
• disclosure recommendations on the quality of stakeholders (including rights holders) engagement, and the alignment of an organisation's climate and nature targets;
• an adaptive approach to the application of TNFD's disclosure recommendations to accommodate the varying materiality and reporting preferences;
• draft guidance on target setting developed with the Science Based Targets Network (SBTN); and
• draft disclosure guidance for financial institutions.

The suggested enhancements are intended to support early action by companies and financial institutions and to encourage increasing disclosure ambition over time.

What’s next?

With the aim to encourage market participants to contribute further to the TNFD's work in these areas, the TNFD also published two new discussion papers on scenarios and societal dimensions of nature-related risk management and disclosure.

In line with its March 2022 predication, the TNFD aims to release a further updated, version 0.4 in February 2023.

The final framework is expected in September 2023 following the 18-month consultation and development programme.