Joint Submission to the TNFD

CA ANZ and ASFI responded to the TNFD consultation on their fourth and final beta framework

The Taskforce on Nature-related Financial Disclosures (TNFD) published the fourth and final beta framework on 28 March 2023, ahead of their final recommendations expected in September 2023.

TNFD’s ambition is for organisations to shift from producing nature-negative outcomes toward nature-positive ones. This is significantly wider than the more established Task Force on Climate-related Financial Disclosures (TCFD), which is the base on which the TNFD was built. The TNFD will cover nature-related risks and impacts and includes metrics, target setting guidance, sector and biome (including rainforest) guidance.

The TNFD is a market-led initiative, funded by government partners and backed by G7 and G20 political leaders. The International Sustainability Standards Board (ISSB) has indicated it will consider the TNFD’s work as it relates to “information needs of investors” with ‘biodiversity, ecosystems and ecosystem services’ outlined as one of the four options within the current consultation on the future workplan.

Accountants will likely have a role in disclosure development and assurance of nature-related risks and opportunities, along with helping their organisations to understand the impacts.

Chartered Accountants Australia and New Zealand’s (CA ANZ) response to the consultation was joint with the Australian Sustainable Finance Institute (ASFI). In our response, we noted support for the objectives of the TNFD, but highlighted the complexity of the LEAP process. We called for more guidance and clarity around materiality considerations and raised concerns about the potential use of the TNFD framework by organisations to make claims of nature positive.

We also identified a critical role for independent external assurance to lend credibility to any information reported by organisations, which will require clear reporting criteria. We also called for extensive piloting of the selected metrics, particularly to assess their relevance and usefulness to investors.

This article was first published by CA ANZ at the following URL: https://www.charteredaccountantsanz.com/news-and-analysis/advocacy/policy-submissions/joint-submission-to-the-tnfd