An industry-led group that’s pioneering corporate disclosure of nature-related financial risks is reporting a surge in companies and financial institutions embracing its reporting framework, but only a handful of them are Canadian.
The Taskforce on Nature-related Financial Disclosures (TNFD) said there are now over 500 organizations, representing a combined US$17.7 trillion in assets under management, that have committed to its voluntary framework for reporting risks and exposures stemming from environmental and biodiversity-related issues as part of their financial reporting for fiscal 2024 or 2025.
This represents a 57% increase from the start of the year, when the first set of companies that committed to the framework was revealed.
“The speed of voluntary market adoption over the past year since the release of the TNFD recommendations highlights the growing appreciation among companies and financial institutions across sectors and geographies that nature is a material risk issue for their business and a new source of opportunity and potential competitive advantage,” said David Craig, co-chair of the TNFD, in a release.
“We have seen significant uptake across sectors — in particular from asset managers, as they address climate and nature risk in their portfolios. Going forward, the growth in these assessments and public disclosures is helping direct financial flows towards more resilient business models and nature-positive outcomes,” he said.
So far, 129 financial institutions have committed to adopting the recommendations, including about a quarter of the global systemically important banks, the group said.
One of the prominent recent adopters is Manulife Investment Management Inc., which is the first — and only — major Canadian financial institution to embrace the task force’s recommendations.
Only 10 of the 500+ adopters are from Canada, with a handful of companies in the construction and natural resources sectors joining Manulife Investment Management and a couple of smaller financial firms (Montreal-based Cordiant Capital Inc. and Lester Asset Management) as signatories.
“With over 40 years of experience as an institutional manager of natural capital investments and as one of the pioneers in issuing a TNFD-aligned nature disclosure, becoming a TNFD adopter is a logical next step for us,” said Brian Kernohan, chief sustainability officer with Manulife Investment Management, in a release.