🤝 A Powerful Partnership
In a move that has the financial world buzzing, the IFRS Foundation and the Taskforce on Nature-related Financial Disclosures (TNFD) have signed a Memorandum of Understanding (MoU). This agreement signifies their commitment to integrating TNFD's recommendations into the ongoing work of the International Sustainability Standards Board (ISSB). The goal? To provide capital markets with high-quality, nature-related financial information.
The ISSB has been involved with TNFD since its inception in late 2021, contributing to the development of TNFD's recommendations. These recommendations, published in September 2023, have already started to shape the landscape of sustainability reporting.
🧠 The Minds Behind the Move
The MoU was signed in Frankfurt, marking a milestone in the collaboration between these two influential organizations. Erkki Liikanen, Chair of the IFRS Foundation Trustees, expressed his enthusiasm:
"We are delighted to be formalizing our partnership with TNFD to ensure that the ISSB gives due consideration to the work TNFD have put into creating recommendations for nature-related financial disclosures."
Sue Lloyd, ISSB Vice-Chair, echoed this sentiment, emphasizing the importance of reducing fragmentation in sustainability disclosure.
🌱 Why It Matters
This partnership is not just about paperwork; it's about paving the way for a more sustainable future. David Craig, Co-Chair of the TNFD, highlighted the broader implications:
"One of the objectives of the TNFD is to help achieve Target 15 of the Kunming-Montreal Global Biodiversity Framework. Better disclosures about nature issues will support the achievement of that goal."
Razan Al-Mubarak, Co-Chair of the TNFD, also emphasized the crucial role of nature in our economies and future, stating that stronger standards mean stronger businesses—and a healthier, more resilient planet.
🔍 Looking Forward
Under the MoU, the ISSB and TNFD will share research, knowledge, and technical expertise. This collaboration will inform the ISSB’s Biodiversity, Ecosystems, and Ecosystem Services (BEES) initiative and enhance the nature-related aspects of its SASB standards. The ISSB will also engage in joint market engagement and capacity-building initiatives with TNFD and other partners.
The ISSB's primary focus is to meet the information needs of investors, ensuring that sustainability-related risks and opportunities are clearly communicated. As the ISSB continues its research on nature-related disclosures, any resulting standards will undergo public consultation, ensuring a transparent and inclusive process.
Meanwhile, the TNFD will persist in its global market engagement and capacity-building efforts, aiming to improve access to high-quality nature-related data. This includes developing additional guidance for preparers and addressing data-related challenges.
