FC4S joins leading banks and companies along with UK, French, Swiss and Peruvian governments in effort to set up a Task Force on Nature-related Financial Disclosures

London, 25 September 2020: Efforts to establish a Task Force on Nature-related Financial Disclosures (TNFD) have today passed an important milestone with the announcement of an Informal Working Group (IWG) comprising some of the world’s biggest banks, investors and companies, as well as governments and regulatory bodies.

The 62 members that make up the IWG are part of the initial planning phase of the TNFD, tasked with establishing a detailed work plan for the Task Force for when it launches in 2021.

A TNFD will build awareness and capacity to enable the financial sector to address the market and systemic failures contributing to the destruction of nature. Data gaps currently prevent financial institutions from assessing their nature-related risks, the IWG will be discussing how to bridge this gap, enabling global finance to shift from nature negative to nature positive.

At the Business of Finance Day at the Nature for Life Hub, Bérangère Abba, French Secretary of State, Ministry for Ecological Transition, announced the IWG and its commitments to the creation of a Task Force and an international reporting standard that is critical for halting biodiversity and ecosystem loss.

Bérangère Abba said: “Biodiversity finance is the new frontier of green finance. Nature requires as much ambition and collective effort as it has been done for climate so far, and the private sector can play a crucial part in redirecting financial flows. We are convinced that the work of the Task-force on Nature-related Financial Disclosures, or “TNFD”, will accelerate the understanding of these issues and will ultimately lead to both a reduction in financial flows and economic activities that are harmful to biodiversity and a massive redirection of flows towards activities that are favourable to biodiversity.”

Madeleine Ronquest, Head Environmental, Social and Climate Risk at FirstRand Group Enterprise Risk Management (South Africa), said: “The launch of the Informal Working Group (IWG) for the TNFD is a significant step towards the goal of moving the global financial system from nature negative to nature positive. I look forward to working with the IWG members to shape and implement the Task Force that will help to make this transition possible.”

“Loss of nature is increasingly impacting business performance. Consumers, stakeholders and governments expect business to take actions which halt the loss of nature. WBCSD supports the launch of the TNFD which will help companies consistently and credibly assess, address and report their impacts and dependencies on nature”, added Diane Holdorf, Managing Director & Senior Management Team, World Business Council for Sustainable Development.

The IWG will meet on a monthly basis and will be supported by a Technical Expert Group (TEG), which is currently in the final stages of formation. The TEG will serve at the direction of the IWG and support the working group in articulating the scope and objectives for the TNFD; the group will be made up of individuals with representative expertise and overview of relevant sources for biodiversity data and tools for assessing nature-related investment risk.

 

Partner and Think Tank Quotes

Stephen Nolan, Managing Director of the International Network of Financial Centres for Sustainability says: “As we have learned nature-positive transitions could generate trillions of dollars in business value and as well potentially hundreds of millions of jobs. That could fundamentally reshape the world and the environment we live in for the better. FC4S is proud to be one of the think tanks assisting the Informal Working Group (IWG) to establish the Task Force on Nature-related Financial Disclosures; as we hope to use sustainable finance to catalyse nature-positive outcomes, in alignment with the UNFCCC Paris Agreement, the CBD Post-2020 Global Biodiversity Targets and the UN Sustainable Development Goals.”

Andrew Mitchell, a Founder and Senior Advisor to Global Canopy commented: “The creation of a TNFD is hugely important as it will lead to new ways of identifying, valuing and reporting on nature-related risks, as well as identifying new economic opportunities to protect and restore the natural world on which we depend, which is more pressing than ever. To have the commitment of these heavyweight companies joining the IWG is a great start in this initiative.”

Midori Paxton, Head of Ecosystems and Biodiversity, UNDP says, “Changing flows of money from nature negative to nature positive is a fundamental ingredient in shifting global systems towards protecting and nurturing nature. Nature underpins world’s businesses. We desperately need nature – for air, water, food and for our health, inspiration, jobs, livelihoods and for achieving the Sustainable Development Goals. Financial institutions and businesses have a critical key to protect nature. If we protect nature, it will pay us back with significant financial and material dividends.”

Eric Usher, Head of UN Environment Programme Finance Initiative said: “An increasing number of financial institutions are stepping forward to address the twin crises of climate change and the loss of nature, and the strong appetite for a TNFD is further evidence of this momentum. Standardising nature-related disclosures will bring much needed efficiencies and transparency to financial markets.”

Margaret Kuhlow, Finance Practice Lead and Interim Conservation Director, WWF International said: “Habitat loss and degradation including deforestation that is largely driven by the way we produce and consume food are rapidly undermining the natural systems on which our economies and our own health rely. Nature loss is a source of systemic risk and instability for markets and the financial system but is largely ignored in corporate and financial decision-making, regulation, and supervision. Our economic behavior has assumed the services that healthy natural systems provide, and on which our economies have been built, are infinite. They aren’t. We are pleased to welcome this collaboration with financial institutions, governments, and other experts to establish the TNFD as a vehicle to shift finance away from destructive activities and toward a nature-positive economy.”

FC4S Takes Centre Stage at Major Chinese Financial Expo CIFTIS 2020

A framework that sets out the response of the global financial system to the Covid-19 pandemic and its impact on sustainable finance has been presented at the China International Fair for Trade in Services (CIFTIS), which started on September 4 in Beijing.

The UN hosted Financial Centres for Sustainability (FC4S) Network presented the findings of its Covid-19 report that outlines an initial framework for response strategies and the implications for global sustainable finance.

last year Beijing became the 26th member of the FC4S network which commits the world’s financial centres to working together in support of the Paris Agreement and the UN Sustainable Development Goals. Now at 30 members, FC4S members collectively represent 80% of the global equity market and $61.3 trillion in global equity market capitalisation.

The Beijing municipal government has outlined a blueprint to position Beijing as an international green finance centre and the CIFTIS 2020 offers an opportunity for FC4S to support the progress of critical Chinese initiatives that match this ambition.

These include Beijing to support FC4S setting up a local office, coordinating with FC4S Secretariat and network members in the Asia Pacific region; establishment of capacity building platform for global FC4S members; and facilitation of key policy dialogues at regional and international level.

Commenting, FC4S Managing Director Mr. Stephen Nolan said FC4S was looking forward to presenting its Covid-19 report with the support of Beijing:

“CIFTIS 2020 offers a wonderful platform to showcase the role of the world’s financial service sector in expanding economic opportunities through a more inclusive, sustainable financial system as well as underlining China’s own progress in this space. Presenting our Covid-19 report findings at such a key event, allows FC4S to highlight collective actions which all FC4S members, partners and potential partners can take, with Beijing taking a leadership role in support of the green finance agenda.

And as an important member of the FC4S network, Beijing is well-positioned to promote green finance and is already playing a significant role in this area. As we build back better, Beijing has the advantage of direct policy support, strong financial resources, and deep human capital to support the expansion of green and sustainable financial markets.”

Commenting, Bureau Chief of Beijing Local Financial Supervision and Administration said:

“As a proud member of the FC4S network, we are pleased that FC4S is presenting the findings of its important Covid-19 and sustainable finance paper in Beijing during the China International Fair for Trade in Services (CIFTIS). Beijing Finance Bureau is delighted to support FC4S promote how global financial centres can contribute to sustainable development, in particular in the context of the global pandemic.

Taking this opportunity of report launch, Beijing will further deepen the comprehensive cooperation with FC4S, and also leverage the capital’s resources and platforms to facilitate policy exchanges and dialogues at the city level of green financial centers, promote business exchanges in ESG development, green financial product innovation, green finance certification and standards, etc. All of these activities aim to promote the capacity for sustainable development of the global financial industry.

Beijing plays a key national and international role in supporting capital markets align themselves with the green finance agenda. And with Beijing home to more than 800 licensed corporate financial institution headquarters, Beijing is rapidly emerging at the centre of China’s green finance policy and the birthplace of several important global green finance initiatives. Indeed, the first domestic green corporate bonds, the first renewable green corporate bonds, and the first green asset-backed notes (ABN) were all issued by Beijing companies.”

Beijing is one of eight FC4S members in Asia, with Hong Kong, Seoul, Shanghai, Shenzhen, Tokyo, Abu Dhabi and Astana on board.

Read the full FC4S report that was presented in Beijing here.

FC4S annual member assessment programme launched

Tracking the progress of FC4S members as they accelerate local efforts to mainstream green and sustainable finance is a key objective of the FC4S global network. Given this, in 2018 FC4S and knowledge partners developed the FC4S assessment programme.

At a high-level, the objectives of the FC4S assessment programme are to provide respondents with a level of alignment, labelled from 0 to 5 on our Sustainable Finance Scale (SFS) which assesses the progress of the green and sustainable finance agenda within member centres, the degree of capital provision in support low-carbon transition, alignment to the Paris Agreement and the achievement of the UN SDGs.

In addition, this framework enables FC4S members to evaluate how their own institutional strategies and broader financial and capital markets are aligned with the objectives of a sustainable financial system.

Now in its third year and following members input at the FC4S Q4 2019 AGM in Geneva, the FC4S assessment programme has recently been updated with the support of PwC, knowledge partners the Institute for Climate Economics (I4CE) and the UNDP Finance Sector Hub, along with a small working group of members including London, Paris, Frankfurt, Dublin, Shenzhen and Guernsey.

As per previous years, aggregate results will be shared with members during at the 2020 FC4S AGM.

Afterwards, the FC4S Secretariat will work with its knowledge partners to develop a public report summarizing the findings of the report. To be published in Q4 2020, this report will draw upon information gathered through the survey process, as well as other sources of data, which combined will highlight the critical role of financial centres in accelerating the green and sustainable finance agenda, not least as we build back better from the COVID-19 pandemic.

Separately and for the first time, the FC4S Secretariat will also produce an individual report analyzing each centre’s progress as per the sustainable finance scale, a possible pathway to move up a level in 2021 and how best the FC4S Secretariat and partners can assist in achieving.

The development and recent update to the FC4S assessment programme is supported by EIT Climate-KIC, a key partner of FC4S.