Federal Environment Ministry to provide 29 million euros for project on nature-related risk management and disclosure in developing countries and emerging economies
Federal Environment Minister Steffi Lemke announced a new project under her ministry’s International Climate Initiative on today’s finance day at the UN Biodiversity Conference (CBD COP) in Montréal, Canada. The goal of this project is to better identify the impacts and dependencies, risks and opportunities of decisions by private companies and the financial sector regarding ecosystems and biological diversity. The plan is for private companies and financial institutions to measure and disclose harmful impacts or dependency on biodiversity, then take this into account in future decisions, leading to reduced impacts or dependency. The Taskforce on Nature-related Financial Disclosure (TNFD), which was launched this year, is drawing up corresponding criteria and standards.
Federal Environment Minister Steffi Lemke commented: "The financial sector and private companies have a crucial role to play in really achieving and implementing a new global biodiversity framework and international biodiversity targets. The TNFD is an important tool for ensuring that nature conservation and biological diversity become a key element of corporate decisions and investments in future. Many investors are not aware that environmental changes – for example, a loss in soil fertility or air quality – also impact on their investments. These risks have not yet been fully identified. Nor have the opportunities that sustainable economic practices in harmony with nature offer. This is why we are supporting the work of the TNFD and its many partners, giving emerging economies and developing countries the opportunity to implement the TNFD recommendations."
The TNFD wants to equip companies and financial institutions with tools that enable them to take sustainable strategic decisions. Companies, investors and other stakeholders will be provided with improved information on reducing environmentally harmful investments and tackling the biodiversity crisis. The IKI project will step up these efforts. This will also contribute to shifting capital away from business models and practices with high nature-related risks towards more nature-friendly solutions and outcomes. The TNFD is an international, market-led and science-backed initiative, building on the approach developed by the Taskforce on Climate-related Financial Disclosures (TCFD). Headed by 40 Taskforce members, companies from the private and financial sector, and with support from over 800 institutions worldwide and a network of knowledge partners, the TNFD is creating a framework that enables companies and financial institutions to take account of nature-related impacts, dependencies, risks and opportunities in their decision-making. Access to high-quality information is crucial to shifting environmentally harmful investments towards greener business models.
The Taskforce also takes account of future activities of the International Sustainability Standards Board (ISSB), located in Frankfurt, and the available drafts of European reporting standards for non-financial corporate sustainability reporting on biodiversity. The TNFD will present its recommendations in September 2023. It will then focus on helping raise awareness and increasing knowledge and capacities in industrialised countries and emerging economies to support acceptance of its recommendations. In addition to contributions from the financial sector and companies, the draft TNFD framework contains contributions from indigenous peoples and local communities (IPLCs), international organisations, civil society organisations and other interest groups.