Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

HSBC, BlackRock, Nestle to help design nature-driven risk framework

Published 30/09/2021, 06:03
Updated 30/09/2021, 06:22
© Reuters. FILE PHOTO: A group of impala graze near the elevated railway line that allows movement of animals below the Standard Gauge Railway (SGR) line linking Nairobi and Naivasha inside the Nairobi national park in Nairobi, Kenya October 16, 2019. REUTERS/Njeri

© Reuters. FILE PHOTO: A group of impala graze near the elevated railway line that allows movement of animals below the Standard Gauge Railway (SGR) line linking Nairobi and Naivasha inside the Nairobi national park in Nairobi, Kenya October 16, 2019. REUTERS/Njeri

By Simon Jessop

LONDON (Reuters) - HSBC, BlackRock (NYSE:BLK) and Swiss Re are among the companies seeking to create a risk management and disclosure framework aimed at moving capital away from activities that damage nature.

The Taskforce on Nature-related Financial Disclosures (TNFD) was launched in June to tackle nature loss, which it says poses significant risk to corporate and financial stability. It said on Thursday that senior executives from up to 35 companies would aim to create the new draft framework for launch in early 2022.

The TNFD will be voluntary and aims to follow in the footsteps of the Taskforce on Climate-Related Financial Disclosures (TCFD), championed by United Nations climate envoy Mark Carney and which is increasingly being made mandatory.

While TCFD requires companies to disclose risks connected to climate change, such as the impact of rising sea levels on a factory located near the coast, many of which are also connected to nature, the TNFD will go further in its scope.

Nature-related issues that could affect a company's share price include those such as deforestation, water shortages or the potential hit to food producers if declining bee numbers impact the pollination of plants which they rely upon.

Alongside the other Taskforce members, which also include Nestle, Citi and Holcim (SIX:HOLN), a further 200 institutions have expressed interest in joining the TNFD Forum, which will assist the work of the Taskforce.

"The business and financial world's race towards net zero emissions will only succeed if they race equally fast towards nature-positivity," TNFD Co-Chairs Elizabeth Mrema and David Craig said in a statement.

© Reuters. FILE PHOTO: A group of impala graze near the elevated railway line that allows movement of animals below the Standard Gauge Railway (SGR) line linking Nairobi and Naivasha inside the Nairobi national park in Nairobi, Kenya October 16, 2019. REUTERS/Njeri Mwangi/File Photo

Each Taskforce member would be part of one of five working groups focused on defining nature-related risks, assessing the available data, looking at current standards and metrics, developing the beta framework and pilot testing it.

"The financial rationale for managing nature-related risks is increasingly clear now, but the information for identifying and acting on the risks in practice is not easily available," Herry Cho, Head of Sustainability and Sustainable Finance, Singapore Exchange, said.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.