Investors, TNFD mull plans to include nature in transition planning

The Taskforce on Nature-related Financial Disclosures (TNFD) and the Glasgow Financial Alliance for Net Zero (GFANZ) have launched consultations on how to include nature into climate transition planning.

The organisations’ goal is to help the corporate and financial world move from climate transition planning to more holistic transition planning taking into account natural impacts and biodiversity.

TNFD nature transition planning guidance

TNFD has published a discussion paper on ‘nature transition planning’ guidance, covering the definition of a nature transition plan, what it should include and how it should be presented to investors.

Following the best practice recommendations offered by the Transition Plan Taskforce (TPT), TNFD’s guidance is organised around five themes: foundations (overall approach, scope of the nature strategy), governance, engagement strategy, metrics and targets, and implementation strategy.

“Every business has impacts and dependencies on nature. They also face growing physical, transition and systemic risks as the resilience of nature underpinning our economies and societies continues to erode. It is now critical for organisations to consider the concrete actions they are going to take to address those issues,” said Emily McKenzie, Technical Director at TNFD. 

“The discussion paper released today builds on market practice and experience with net zero transition planning – particularly the approach and guidance provided by GFANZ and the TPT – and ultimately seeks to move towards integrated transition planning for the benefit of investors and other stakeholders,” she added.

GFANZ: Nature in net zero transition plans

At the same time, GFANZ – a coalition of financial institutions aiming to accelerate the transition to net zero, has launched a consultation paper on “voluntary, supplemental guidance” for how financial institutions can integrate nature considerations in support of net-zero transition planning.

The paper looks specifically at aspects of the nature transition that can support net zero targets: specifically, reducing nature-related GHG emissions in line with 1.5 degrees; protecting and increasing nature-related GHG sinks; and embedding nature-related considerations into approach and planning.

Mary Schapiro, Vice Chair of GFANZ, explained: “Nature risk is financial risk, and this consultation helps underscore the critical role nature plays in ensuring the journey to net zero is efficient and comprehensive.”

She also welcomed TNFD’s guidance, which “complements the work of GFANZ to incorporate nature into transition planning”. “Transparent data is critical for accurately and effectively taking action to protect biodiversity, and clear, consistent disclosure is the first step to accessing that data,” she added.

Feedback on the GFANZ consultation paper is open until January 27, 2025, while the TNFD guidance consultation will close on February 1, 2025 – with final recommendations expected later in 2025.