Regulatory Briefing: TNFD publishes metrics guideline

The biodiversity-focused Taskforce on Nature-related Financial Disclosures has moved forward its pilot framework by publishing a high-level structure of the metrics and target-setting approach that it plans to adopt. Financial institutions will now be invited to trial the scheme.

This second iteration provides an overview of the TNFD’s approach to guidance for market participants. It includes sector classification aligned with the approach taken by the International Sustainability Standards Board, the Sustainability Accounting Standards Board and the Task Force on Climate-related Financial Disclosures. 

Additionally, there is guidance on how to undertake dependency and impact evaluation plus a guide for market participants interested in starting to trial the pilot framework for eleven months from July 1. 

The draft structure, which comes with an illustrative set of assessment metrics, is TNFD’s response to demands from market participants including financial institutions, which called for more specific guidance on metrics and targets after the TNFD’s first draft in March, said the organisation.

Examples of metrics are: species abundance; species threat abatement restoration; volume of soil pollutants released; and Scope 1, 2 and 3 greenhouse gas emissions.

Next steps. The TNFD plans to further update the framework with sector guidance and guidance on the use of scenarios in November 2022 and February 2023. Final recommendations are due in September 2023.

The TNFD counts on 34 members with combined assets of $19tn under management. It was created last year to do for biodiversity and nature-focused issues broadly what the TCFD has done for climate change, reflecting the new urgency with which the depletion of nature is now viewed.