TNFD Seeks to Strengthen Nature Data Value Chain
Work on ensuring access to high-quality data must be paired with supporting robust analysis, says TNFD’s Director of Data.
The usability of and access to high-quality data is impeding rapid progress by investors wanting to understand and address nature-related risks, impacts and dependencies in their portfolios. As such, the Taskforce on Nature-related Financial Disclosures (TNFD) is focused on honing the availability and robustness of decision-useful information over the course of 2025.
The organisation’s vision for the future development of the nature data market was outlined by Cathrine Armour, Director of Data Initiatives at the TNFD, in a keynote speech at ESG Investor’s second annual Nature Data for Institutional Investors event.
“It takes a lot of time to see what data is relevant, and [TNFD] would like to address making that data more readily accessible, interoperable and able to be applied, so the focus can be on analysis,” Armour said.
The taskforce also aims to tackle investor concerns regarding the quality and assurance of nature-related data.
“We have to solve for this if we want to see corporate public disclosures, target-setting and commitments to transition planning,” she said.
“However, access to data will not achieve nature intelligence in and of itself. As with any other areas of business intelligence, including financial and risk analysis, translating data into insights primarily requires clarity of metrics and measurement.”
A roadmap for nature data
In October, the TNFD published a roadmap which aims to enhance market access to high-quality nature-related data, while also supporting entities in their understanding of nature-related dependencies and impacts.
It outlined three key areas of focus: defining and clarifying a set of composite data principles, specifying enhancements and quality improvements to the nature data value chain, and exploring end-user requirements through a beta version of an open access Nature Data Public Facility (NDPF).
Initiatives in these areas will undergo pilot testing throughout the course of next year, ahead of final recommendations being put forward in late 2025.
“Our proposed approach to pilot testing […] will identify critical upstream coverage and quality gaps in need of investment [and] highlight how best to improve access and translate nature intelligence into business intelligence,” Armour said.
This work will support entities looking to improve their target-setting and nature transition planning, she added.
“Nature data has been available and developing for many years, and continues to grow in availability and quality – however, it’s really a matter of data, data everywhere and not a zero or one to analyse,” Armour said.
“Now is the moment to be thinking about how we strengthen the nature data value chain.”
The TNFD is a market-led and science-based initiative that provides tools for organisations to assess, report, and act on nature-related risks and opportunities.
Research suggests that around 60% of global GDP is either moderately or highly dependent on nature.
Core foundation
The roadmap also included the taskforce’s detailed plans for its NDPF, a nature equivalent of the emissions-focused Net Zero Data Public Utility, which is focused on ensuring standardised and comparable core climate data from companies globally is publicly accessible.
The NDPF will establish a core foundation of high-quality data on an array of nature topics, such as biodiversity and land degradation. As well as supporting investors in analysing their exposures to nature risks, dependencies and opportunities, it is also expected to help governments shape more robust nature-focused policies.
To inform the NDPF’s development, the TNFD has opened a consultation on the roadmap which will run until 17 January 2025.
This will build upon the TNFD’s recent draft guidance on nature transition planning for companies and financial institutions, published at COP16. The guidance has been designed to complement finance sector-focused nature transition planning guidance issued by the Glasgow Financial Alliance for Net Zero (GFANZ).
The TNFD published its final recommendations for nature-related risk management and disclosures in September 2023, in line with meeting Target 15 of the Global Biodiversity Framework’s (GBF), which specifically calls for corporate disclosures on nature-related issues.
The TNFD’s disclosure recommendations are being implemented by over 500 organisations across 54 jurisdictions and 62 sectors. In addition, 129 financial institutions are registered as TNFD adopters.
“We’re starting to see a financial system that can begin to put nature on a balance sheet, and companies that are actively transitioning to nature positive business models,” said Armour.
“We are learning the lessons and building the financing of products, but there’s still so much more to do. Better access to decision-useful nature data remains an integral part of the shift.”
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