Establishing a meaningful metric for biodiversity has long been an elusive task. Perhaps a new approach could provide such a metric for strategic decision making. The Taskforce on Nature-related Financial Disclosures (TNFD) has released a second draft version of its framework[1]. The first beta framework, released back in March, generated hundreds of pieces of feedback from stakeholders across the world, and this iteration will provide further responses, aiding the development of the final TNFD recommendations which are due in September 2023. The recommendations in their final form will help financial institutions and companies report and act on nature-related risks and opportunities, and support financial flows away from nature-negative outcomes and towards nature-positive ones.
This new version offers additional practical guidance and an architecture for metrics and targets to assist pilot testers who wish to try out the potential application of the framework. It also distinguishes between assessment metrics and disclosure metrics to reflect that the latter are only a sub-set of what is analysed within organisations.
One key area of feedback since the first version’s release is that nature and nature-related risk assessment is new and complex to many, and so, in response, this second draft offers additional guidance on the LEAP approach (Locate the organisation’s interface with nature, Evaluate dependencies and impacts, Assess risks and opportunities, Prepare to respond).
Future changes are also outlined. Sector-specific guidance to metrics will become available in future iterations (current versions focus on cross-sector metrics), to align with the approach taken by the Taskforce on Climate-related Financial Disclosures (TCFD)[2]. The new beta also states that future releases will include risk, opportunity, and response metrics as components of assessment metrics, in addition to disclosure metrics.
So how does this relate to the built environment? Ecosystem services provided by nature underpin our societies and economies, and their loss poses many risks to all market participants, including developers and social landlords. Specifically, green spaces contribute to:
- Flood attenuation
- Summer cooling
- Air quality improvement
- Carbon sequestration
- Recreational value
- Placemaking
- Biodiverse habitat
Understanding how nature-related risks affect financial performance, and how corporate behaviour impacts the natural world, is central to ensuring the sustainability of organisations and the environment.
Here at SHIFT Environment, we firmly believe that you can only make useful assessments using robust metrics, but according to the TNFD, companies rarely assess, manage, or report on their exposure to nature-related issues sufficiently[3]. With updated beta versions due in November 2022 and February 2023 offering more feedback from stakeholders, the final TNFD recommendations should help organisations assess and respond to the evolving risks and opportunities posed by nature.
If you would like a complete environmental assessment of all your buildings, please get in touch with us at [email protected]
[2] This is now UK law: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1056085/mandatory-climate-related-financial-disclosures-publicly-quoted-private-cos-llps.pdf
[3] ESG Clarity May 2022 UK (ceros.com)
Photo credit: Iva Rajović