TNFD: A new framework for nature-related financial disclosures | Insight Investment

• While it is becoming common for investors and asset owners to act on reducing climate change risk in their portfolios, natural-capital risk has received less scrutiny. The Taskforce on Nature-related Financial Disclosures (TNFD) is a new market-led disclosure framework for measuring the impact of companies on nature, and their dependence on nature, building on the work of the Task Force on Climate-related Financial Disclosures (TCFD).
  
  
• The TNFD is a voluntary framework, but we expect it to shape future regulations and investment practices. We also expect its adoption and influence to accelerate over the next two years.
  
  
• Despite growing investor demand for biodiversity and nature-focused investments, the supply of credible use-of-proceeds bonds (also known as impact bonds) focused on these areas remains low.
  
  
• We expect such issuance to grow as the TNFD framework is adopted. Some issuers are in the early stages of setting nature-related targets, which could lead to new issuance.

The views expressed were current at the time of publication and may not reflect the latest market environment or other developments.