KBRA Releases ESG Research – Taskforce on Nature-Related Financial Disclosures Primer

27 Mar 2024   |   New York


KBRA releases research that provides an overview of the Taskforce on Nature-Related Financial Disclosures (TNFD), with recommended disclosures spanning across physical, transition, and systemic climate factors, in alignment with global biodiversity goals. Additionally, this report delves into the TNFD’s strategic importance for investors, the current status of the disclosures in the marketplace, and challenges to adoption.

In the evolving landscape of financial disclosures, the TNFD represents a groundbreaking initiative, offering a comprehensive framework for financial institutions to assess and articulate their impact and dependencies on nature. The framework not only captures the inherent risks and opportunities associated with nature for organizations, but also endeavors to facilitate a pivotal transition from nature-negative to nature-positive operations. The TNFD, structured on four integral pillars—governance, strategy, risk and impact management, and metrics and targets—enables a standardized approach to evaluating and managing nature-related risks and opportunities. Emphasizing the need for proactive engagement, the TNFD encourages financial services companies to prepare for nature-related risks ahead of mandatory disclosure requirements, thereby mitigating potential business instability. Though there are challenges in its early stages, the TNFD framework has the potential to redefine the financial sector’s relationship with nature and to foster long-term environmental and economic sustainability.

Click here to view the report.

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KBRA is a full-service credit rating agency registered in the U.S., the EU, and the UK, and is designated to provide structured finance ratings in Canada. KBRA’s ratings can be used by investors for regulatory capital purposes in multiple jurisdictions.

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