1 00:00:16,710 --> 00:00:19,590 Hi, I'm Helen Avery with the Green Finance Institute and 2 00:00:19,590 --> 00:00:21,270 you're listening to Financing Nature. 3 00:00:21,710 --> 00:00:24,470 In this episode, I'm going to be joined by Emily McKenzie, 4 00:00:24,470 --> 00:00:27,550 Technical Director at the Task Force on Nature Related 5 00:00:27,550 --> 00:00:30,600 Financial Disclosures. I think in particular what's 6 00:00:30,600 --> 00:00:34,440 happening is the LEAP assessment is providing insights that 7 00:00:34,440 --> 00:00:38,280 inform business strategy which smart companies are doing before 8 00:00:38,280 --> 00:00:41,480 they even get to disclosure. So I'll give an example of a 9 00:00:41,480 --> 00:00:44,720 pharmaceutical company that undertook a very detailed strong 10 00:00:44,720 --> 00:00:47,440 LEAP assessment actually found that it's nature related risks 11 00:00:47,440 --> 00:00:49,680 and opportunities were greater than what they had found for 12 00:00:49,680 --> 00:00:52,200 climate alone and were actually interacting. 13 00:00:52,520 --> 00:00:56,120 So, you know, for example, climate change and over 14 00:00:56,120 --> 00:00:59,400 extraction of particular plant species that they relied on was 15 00:00:59,480 --> 00:01:02,080 it's compromising supply of pharmaceutical products and 16 00:01:02,080 --> 00:01:04,640 supply chains. So that led them to take, you 17 00:01:04,640 --> 00:01:07,480 know, some time to update their strategy to improve that 18 00:01:07,480 --> 00:01:09,520 resilience. And then they were able to tell 19 00:01:09,760 --> 00:01:12,000 not a perfect story, but a good story on their disclosures about 20 00:01:12,000 --> 00:01:14,520 what their targets were and how they were going to improve every 21 00:01:14,520 --> 00:01:17,680 time. But I do feel confident of 22 00:01:18,000 --> 00:01:20,480 growing a number of examples where business strategy, the 23 00:01:20,480 --> 00:01:23,960 resilience of business strategy is visibly improving. 24 00:01:24,160 --> 00:01:26,520 And I think it shows the importance of that assessment as 25 00:01:26,520 --> 00:01:34,040 well as the disclosure. Hello Anna, warm welcome to you. 26 00:01:34,040 --> 00:01:38,360 I hope you are having a lovely day or evening, whatever time 27 00:01:38,400 --> 00:01:41,880 you're at and wherever you are. I am going to be joined today by 28 00:01:41,880 --> 00:01:45,600 Emily McKenzie of the TNFD. And we're going to be catching 29 00:01:45,600 --> 00:01:50,600 up on where the TNFD is now and talking about how the assessment 30 00:01:50,600 --> 00:01:53,720 of impacts and dependencies on nature that the framework 31 00:01:53,720 --> 00:01:58,080 through that LEAP assessment provides can lead to action the 32 00:01:58,080 --> 00:02:01,840 other side by the private sector unlocking that investment into 33 00:02:01,840 --> 00:02:05,240 nature restoration or nature positive and or I should say 34 00:02:05,240 --> 00:02:08,880 nature positive outcomes. So really sort of calling into 35 00:02:08,880 --> 00:02:13,320 question like how do we move from disclosures into investment 36 00:02:13,320 --> 00:02:23,040 the other side? Well, good afternoon, Lee. 37 00:02:23,040 --> 00:02:24,640 Thank you so much for joining us today. 38 00:02:24,920 --> 00:02:26,920 Hi Helen, it's great to be here. Thanks for having me. 39 00:02:27,280 --> 00:02:31,360 And this is a second time you've been on vanity nature, which I 40 00:02:31,360 --> 00:02:33,080 think is a first. Actually. 41 00:02:33,080 --> 00:02:34,920 I'm not sure anyone else has come on twice. 42 00:02:35,080 --> 00:02:37,560 So thank you for rejoining us. Fantastic. 43 00:02:37,560 --> 00:02:39,760 I feel very privileged. We feel very privileged. 44 00:02:40,720 --> 00:02:44,360 So the heart of this particular season is really looking at how 45 00:02:44,360 --> 00:02:47,080 we're going to move private sector investment into nature 46 00:02:47,080 --> 00:02:49,160 restoration and nature based solutions. 47 00:02:49,520 --> 00:02:52,440 You know, obviously we'll have a conversation today, I'm hoping 48 00:02:52,440 --> 00:02:57,560 about, you know, how do you move from disclosures into investment 49 00:02:57,560 --> 00:02:59,640 and you know, how can disclosures help with 50 00:02:59,640 --> 00:03:00,920 investment? So we'll be talking all about 51 00:03:00,920 --> 00:03:02,840 the, the TNFD and what you've been seeing. 52 00:03:03,160 --> 00:03:05,920 But I just wondered before we get going, as it's been a while 53 00:03:05,920 --> 00:03:09,000 since you came on, if it'd be good to have a bit of an. 54 00:03:09,000 --> 00:03:12,280 Update on TNFDI, know that you've done so much work over 55 00:03:12,280 --> 00:03:14,480 the last. I think it's probably a good 2 56 00:03:14,480 --> 00:03:16,160 1/2 years, maybe even since we spoke. 57 00:03:16,160 --> 00:03:18,280 I can't remember now. But it'd be great to sort of 58 00:03:18,280 --> 00:03:21,280 understand, you know, how many companies are now are working 59 00:03:21,280 --> 00:03:24,200 through TNFD and, and what's the kind of guidance that you've 60 00:03:24,200 --> 00:03:26,240 been putting out there and, and where are you in the whole 61 00:03:26,240 --> 00:03:29,160 process of disclosures? Thanks Helen. 62 00:03:29,200 --> 00:03:33,920 It's yeah, it's been 4 years I think roughly since TNFD first 63 00:03:33,920 --> 00:03:36,280 began. Our Co chair David Craig said he 64 00:03:36,320 --> 00:03:39,400 reached his four year anniversary and obviously a big 65 00:03:39,400 --> 00:03:44,000 milestone for us was September 2023 when we publish the 66 00:03:44,000 --> 00:03:46,600 disclosure recommendations and the first package of guidance. 67 00:03:46,600 --> 00:03:50,120 And so kind of think of our work as being the first phase, 68 00:03:50,400 --> 00:03:53,080 building to get into that milestone in the second phase 69 00:03:53,080 --> 00:03:56,720 since and in that second phase, we're really driving awareness 70 00:03:56,720 --> 00:03:59,840 and adoption of the disclosure recommendations and then 71 00:03:59,840 --> 00:04:02,960 building capacity to do the underlying assessments and, and 72 00:04:02,960 --> 00:04:05,960 use our guidance as well as trying to address things that 73 00:04:05,960 --> 00:04:09,440 are proving to be tricky or or blockers or gaps like data. 74 00:04:09,880 --> 00:04:12,520 But we're feeling really pleased if we just look at this really 75 00:04:12,520 --> 00:04:15,600 main focus on adoption of the disclosure recommendations. 76 00:04:15,600 --> 00:04:20,079 We as of October last year, so that was a year after we 77 00:04:20,079 --> 00:04:24,360 published them, we were at over 500 adopters, which means 78 00:04:24,360 --> 00:04:27,120 organisations committed disclose against these recommendations 79 00:04:27,120 --> 00:04:33,840 which cover 54 countries or or areas 62 of the 77 sectors under 80 00:04:33,840 --> 00:04:35,640 the SARS B classification system. 81 00:04:36,000 --> 00:04:39,360 And in terms of publicly listed companies that covers 6 1/2 82 00:04:39,360 --> 00:04:42,040 trillion U.S. dollars in market organisation. 83 00:04:42,040 --> 00:04:44,800 Yeah and we have a good number of financial institutions that 84 00:04:45,480 --> 00:04:49,640 almost 100 and and 30 which includes 1/4 of the world's 85 00:04:49,640 --> 00:04:52,760 systemically important banks. So really pleased on the 86 00:04:52,760 --> 00:04:55,680 adoption. We also know that many more, 87 00:04:55,880 --> 00:04:57,840 probably thousands are using our guidance. 88 00:04:58,120 --> 00:05:00,000 We don't yet have good numbers on that. 89 00:05:00,000 --> 00:05:03,040 So we're actually moving towards doing our first status update 90 00:05:03,040 --> 00:05:06,680 report like TCFD did. That will be in September this 91 00:05:06,680 --> 00:05:10,000 year where we should start to see who's using our guidance on 92 00:05:10,040 --> 00:05:12,280 the leave approach for assessment through a survey and 93 00:05:12,280 --> 00:05:13,800 and so on. Oh, fantastic. 94 00:05:13,800 --> 00:05:16,200 Yeah, because as you say, we know in the UK that many more 95 00:05:16,200 --> 00:05:19,720 are using it than are currently sort of committed to disclosing. 96 00:05:20,080 --> 00:05:23,640 And so getting on to this sort of point of, you know, how do 97 00:05:23,840 --> 00:05:25,760 you and hopefully we'll come back at the end, sort of hear 98 00:05:25,760 --> 00:05:28,360 about what's next for TNFD and what's coming up for you over 99 00:05:28,360 --> 00:05:32,040 the next year and sort of that translation into ISSB. 100 00:05:32,720 --> 00:05:35,920 But on this point of how do we move from disclosure to 101 00:05:35,920 --> 00:05:39,160 investment, I just wondered, you know, how are you thinking about 102 00:05:39,160 --> 00:05:42,600 this transition and you know, is the first step that you're 103 00:05:42,600 --> 00:05:45,960 seeing with businesses understanding those impacts and 104 00:05:45,960 --> 00:05:49,400 dependencies? Yes, because dependencies and 105 00:05:49,400 --> 00:05:53,240 impacts on nature are the source of of risks and opportunities. 106 00:05:53,240 --> 00:05:56,200 So that's the first basis for an assessment. 107 00:05:56,680 --> 00:05:59,600 And we actually recently, just last week at London Claim Action 108 00:05:59,600 --> 00:06:02,480 Week, published 7 case studies with GRI that might be of 109 00:06:02,480 --> 00:06:06,000 interest to your listeners that show how companies are 110 00:06:06,280 --> 00:06:08,640 identifying their risks and opportunities based on these 111 00:06:08,640 --> 00:06:11,760 dependencies and impacts. So it could be their own impacts 112 00:06:11,760 --> 00:06:13,640 on nature, the impacts of others on nature. 113 00:06:13,640 --> 00:06:16,960 There might be external factors like climate change or or other 114 00:06:16,960 --> 00:06:19,240 things that are affecting the services they depend on. 115 00:06:19,680 --> 00:06:22,600 So that's the first basis, even if you're just looking from 116 00:06:22,600 --> 00:06:25,000 financial materiality perspective. 117 00:06:25,000 --> 00:06:27,200 And so that starting point's the assessment, But of course, it's 118 00:06:27,200 --> 00:06:30,240 not the end point. And we have recently been 119 00:06:30,240 --> 00:06:33,440 working on guidance on nature transition planning, which is 120 00:06:33,440 --> 00:06:36,400 really action oriented. How do you transition your 121 00:06:36,400 --> 00:06:39,760 strategy to contribute or respond to the transition 122 00:06:39,760 --> 00:06:41,320 implied by the global biodiversity framework? 123 00:06:41,320 --> 00:06:44,000 So that really has been nice to have that focus. 124 00:06:44,000 --> 00:06:47,840 But of course, that guidance also takes an assessment of an 125 00:06:47,840 --> 00:06:50,560 organisation, dependencies and impacts on nature as that 126 00:06:50,560 --> 00:06:53,200 starting point. So if. 127 00:06:53,200 --> 00:06:57,200 Transition plans are effectively the bridge between assessment 128 00:06:57,200 --> 00:07:00,160 and action. Can you share more about the 129 00:07:00,160 --> 00:07:02,760 development of transition plans that you've been working on 130 00:07:03,040 --> 00:07:04,480 well? There are two things that have 131 00:07:04,480 --> 00:07:06,880 been happening, one's external and one internal that have 132 00:07:06,880 --> 00:07:09,120 driven this work. External is that we're already 133 00:07:09,120 --> 00:07:11,560 seeing investors asking their investee companies how they're 134 00:07:11,560 --> 00:07:13,960 proposing to manage their dependencies and impacts and 135 00:07:13,960 --> 00:07:16,160 risks opportunities because there'll be seeing those LEAP 136 00:07:16,160 --> 00:07:18,520 assessments or asking for them starting to see reports. 137 00:07:18,520 --> 00:07:21,400 So it's a move to that. So what what are you doing about 138 00:07:21,400 --> 00:07:23,840 it? And regulators and other 139 00:07:23,840 --> 00:07:25,680 stakeholders also asking questions. 140 00:07:25,680 --> 00:07:28,760 So that's driven demand in transition planning beyond just 141 00:07:28,760 --> 00:07:32,720 what TNFD has done. But then TNFD, we had a specific 142 00:07:32,720 --> 00:07:37,000 recommended disclosure strategy B that specifies that an 143 00:07:37,000 --> 00:07:39,880 organisation should disclose any transition plans in place. 144 00:07:39,880 --> 00:07:41,240 So that gave us a hook to say, right. 145 00:07:41,360 --> 00:07:43,120 So in our recommended disclosures, we really should 146 00:07:43,120 --> 00:07:48,120 provide some guidance. So last October at the CUP 16 in 147 00:07:48,120 --> 00:07:50,240 Cali, we published draught guidance. 148 00:07:50,480 --> 00:07:52,760 It's, but it's very detailed and practical. 149 00:07:52,760 --> 00:07:54,720 I mean, it's, it's in the form of a discussion paper, but it's 150 00:07:54,720 --> 00:07:57,760 almost like a full draught on nature transition planning. 151 00:07:57,800 --> 00:08:00,040 It's relevant for both corporates and financial 152 00:08:00,040 --> 00:08:02,560 institutions. And it covers 2 dimensions. 153 00:08:02,880 --> 00:08:04,800 First is, you know, how do you do the planning? 154 00:08:04,800 --> 00:08:08,120 What should that plan include? And then how should you present 155 00:08:08,120 --> 00:08:11,240 and disclose it? So more disclosure focused and 156 00:08:11,240 --> 00:08:13,920 we were really benefited just like in our original work 157 00:08:13,960 --> 00:08:17,000 building from the work of TCFD for the transition planning of 158 00:08:17,000 --> 00:08:20,520 the work we built from the work of G fans and the transition 159 00:08:20,520 --> 00:08:23,040 plan task force. G fans done more of the internal 160 00:08:23,040 --> 00:08:25,880 planning. The TPT as they're known have 161 00:08:25,880 --> 00:08:29,440 done more on the disclosure. So it's quite principles based. 162 00:08:29,440 --> 00:08:32,799 It's focused on how to structure a plan and the changes to the 163 00:08:32,799 --> 00:08:34,520 business that they need to think through. 164 00:08:35,039 --> 00:08:38,440 We went for out for public consultation, we published it in 165 00:08:38,440 --> 00:08:41,159 October and we got some really useful feedback. 166 00:08:41,679 --> 00:08:44,159 And part of that feedback was to make sure it really works in 167 00:08:44,159 --> 00:08:46,200 practise and it's decision useful. 168 00:08:46,200 --> 00:08:49,240 So as TNFD always likes to, we've got moved into some 169 00:08:49,240 --> 00:08:52,120 piloting. We now have 15 mix of 15 170 00:08:52,120 --> 00:08:53,920 corporates and financial institutions that are testing 171 00:08:53,920 --> 00:08:57,440 that guidance. With our team working through 172 00:08:57,440 --> 00:09:00,160 all of the different components. It's really generating very 173 00:09:00,160 --> 00:09:03,480 useful insights, confirming some of the things we had, but 174 00:09:03,480 --> 00:09:05,600 actually fundamentally changing some of the guidance. 175 00:09:05,640 --> 00:09:09,880 And we will publish it in November this year at COP 30 as 176 00:09:10,160 --> 00:09:12,120 final guidance. And I'm, I'm really to the 177 00:09:12,120 --> 00:09:14,840 conclude, I'm really excited by how much interest there is in 178 00:09:14,840 --> 00:09:17,320 this. We ran ATNFD webinar on our 179 00:09:17,320 --> 00:09:20,040 transition planning work and we had 2000 registered. 180 00:09:20,840 --> 00:09:24,440 So yeah, I think there's real excitement and interest to move 181 00:09:24,440 --> 00:09:27,080 to action and this helps get there. 182 00:09:27,800 --> 00:09:30,760 So that's really exciting and encouraging to hear really, 183 00:09:30,760 --> 00:09:32,840 isn't it? And have you seen that 184 00:09:32,840 --> 00:09:35,720 investment or action being taken? 185 00:09:35,720 --> 00:09:37,840 It'd be great to sort of hear if you've got some examples. 186 00:09:38,280 --> 00:09:40,640 Yeah. And it is early days, obviously. 187 00:09:40,640 --> 00:09:44,120 So I say that humbly that we're really pleased that the 188 00:09:44,120 --> 00:09:46,320 foundational assessments are being done. 189 00:09:46,680 --> 00:09:51,400 We're now aware of probably well over 125 TNFD reports. 190 00:09:51,840 --> 00:09:54,560 So as I said, we'll do the status report in September. 191 00:09:54,560 --> 00:09:58,520 We'll see what's Atlas, all of that is foundational, but our 192 00:09:58,520 --> 00:10:02,200 mission is to significantly shift financial flows. 193 00:10:02,360 --> 00:10:05,120 So your question is absolutely the right one to ask, but we 194 00:10:05,120 --> 00:10:09,200 don't know for sure what what's what's happening at the biggest 195 00:10:09,200 --> 00:10:12,680 scale of that. I have some anecdotal examples 196 00:10:12,680 --> 00:10:15,280 which I find encouraging. I can give you somewhere 197 00:10:15,280 --> 00:10:18,040 internal. So I think in particular what's 198 00:10:18,040 --> 00:10:22,480 happening is the LEAP assessment is providing insights that 199 00:10:22,480 --> 00:10:26,280 inform business strategy, which smart companies are doing before 200 00:10:26,280 --> 00:10:28,800 they even get to disclosure, because then when they do the 201 00:10:28,800 --> 00:10:31,960 disclosure, they have a, you know, a good or a better story. 202 00:10:33,080 --> 00:10:35,200 Yeah. So I'll give an example of a 203 00:10:35,200 --> 00:10:38,480 pharmaceutical company that undertook a very detailed strong 204 00:10:38,480 --> 00:10:41,560 LEAP assessment, actually found that it's nature related risks 205 00:10:41,560 --> 00:10:43,840 and opportunities were greater than what they had found for 206 00:10:43,840 --> 00:10:46,320 climate alone and were actually interacting. 207 00:10:46,640 --> 00:10:50,240 So you know, for example, climate change and over 208 00:10:50,240 --> 00:10:53,640 extraction of particular plant species that they relied on was 209 00:10:53,640 --> 00:10:56,240 compromising supply of pharmaceutical products and 210 00:10:56,240 --> 00:10:58,800 supply chains. So that led them to take, you 211 00:10:58,800 --> 00:11:01,640 know, some time to update their strategy to improve that 212 00:11:01,640 --> 00:11:03,680 resilience. And then they were able to tell 213 00:11:03,880 --> 00:11:05,960 not the perfect story, but a good story in their disclosures 214 00:11:05,960 --> 00:11:08,160 about what their targets were and how they were going to 215 00:11:08,160 --> 00:11:10,920 improve every time. And I think that's really 216 00:11:11,160 --> 00:11:14,800 powerful because that then enables the internal decision 217 00:11:14,800 --> 00:11:17,440 making. There's another example of a 218 00:11:18,120 --> 00:11:21,760 producer of health and hygiene products that have important 219 00:11:21,760 --> 00:11:26,040 supply chains for latex and palm oil where they were through, 220 00:11:26,040 --> 00:11:28,880 again, through their Leap assessment, able to identify how 221 00:11:28,880 --> 00:11:31,480 they could diversify their sources and switch to 222 00:11:31,480 --> 00:11:34,680 alternative materials. And I know you said the focus is 223 00:11:34,680 --> 00:11:37,360 on nature based solutions and restoration in this example, 224 00:11:38,440 --> 00:11:42,160 identifying the importance of smallholder farmers in the latex 225 00:11:42,160 --> 00:11:44,320 supply chain, taking a regenerative agriculture 226 00:11:44,320 --> 00:11:45,840 approach. And they're already using 227 00:11:45,880 --> 00:11:48,400 intercropping and you know, growing several props together 228 00:11:48,840 --> 00:11:51,880 to improve solar health and E system services both to the, you 229 00:11:51,880 --> 00:11:54,920 know, to the local communities as well as the companies and all 230 00:11:54,920 --> 00:11:56,880 of this. Then of course, the question is 231 00:11:56,880 --> 00:12:00,000 how is the disclosure of these improvements in business 232 00:12:00,000 --> 00:12:02,800 strategy unlocking the investment? 233 00:12:03,120 --> 00:12:04,560 And we need to keep an eye on that. 234 00:12:04,560 --> 00:12:09,560 We don't yet have a set strong stories, but I think GFI and and 235 00:12:09,560 --> 00:12:11,960 ourselves should be keeping an eagle eye on that because that's 236 00:12:11,960 --> 00:12:14,120 part of the theory of change, right, for why disclosure 237 00:12:14,120 --> 00:12:17,120 matters. But I do feel confident of 238 00:12:17,360 --> 00:12:19,760 growing a number of examples where business strategy, the 239 00:12:19,760 --> 00:12:23,240 resilience of business strategy is visibly improving. 240 00:12:23,440 --> 00:12:26,200 And I think it shows the importance of that assessment as 241 00:12:26,200 --> 00:12:28,040 well as the disclosure. Yeah, you're right. 242 00:12:28,040 --> 00:12:30,080 It's not just disclosure for disclosure's sake, is it? 243 00:12:30,080 --> 00:12:32,240 It's really about how do we get them to start? 244 00:12:32,680 --> 00:12:36,640 Well, I think the whole premise of the TNFT was around unlocking 245 00:12:37,480 --> 00:12:41,880 investment into nature positive outcomes and then decreasing 246 00:12:42,680 --> 00:12:44,240 negative impacts on nature wasn't. 247 00:12:44,240 --> 00:12:47,840 It exactly, exactly. And we're seeing the demand from 248 00:12:47,840 --> 00:12:50,440 financial institutions. So I guess we're seeing the the 249 00:12:50,440 --> 00:12:53,160 demand from corporates, those two examples I gave, but also 250 00:12:53,320 --> 00:12:57,360 the growing demand, especially from large asset owners who are 251 00:12:57,360 --> 00:13:00,040 invested across a range of sectors and geographies and 252 00:13:00,040 --> 00:13:03,200 asset classes and may not be able to diversify away from 253 00:13:03,200 --> 00:13:07,880 these nature related risks. So we're also tracking examples 254 00:13:07,880 --> 00:13:11,120 of public statements from asset owners and managers and 255 00:13:11,120 --> 00:13:15,440 insurers, the likes of Norcos Bank, Investment Management, 256 00:13:15,440 --> 00:13:18,600 BlackRock Legal and General, Aviva, AXA and so on, which 257 00:13:18,600 --> 00:13:21,560 might be in the form of stewardship engagement or voting 258 00:13:21,560 --> 00:13:24,200 policies where they're calling for their embassies to start 259 00:13:24,200 --> 00:13:27,480 disclosing on this, sometimes encouraging stock exchanges to 260 00:13:27,480 --> 00:13:30,960 set recommendations within their disclosure expectations and 261 00:13:30,960 --> 00:13:33,920 listing rules. And then, yeah, you know, saying 262 00:13:33,920 --> 00:13:36,400 we encourage management of this or they'll be dissenting votes 263 00:13:36,760 --> 00:13:39,760 against management or the board. So and, and some of the times 264 00:13:39,760 --> 00:13:42,240 they're general, sometimes they're actually specifically 265 00:13:42,240 --> 00:13:46,640 mentioning TNFD, recognising you need, they want a standardised 266 00:13:46,640 --> 00:13:48,920 set of definitions and information for disclosure, 267 00:13:48,920 --> 00:13:52,640 especially on metrics to be able to compare within and across 268 00:13:52,640 --> 00:13:54,120 sectors. So we're seeing the demand from 269 00:13:54,120 --> 00:13:55,920 investors, we're seeing the demand from corporates. 270 00:13:55,920 --> 00:13:59,600 What we now need to see is the investment flows matching that, 271 00:13:59,600 --> 00:14:01,920 of course, to reward strong performance. 272 00:14:02,240 --> 00:14:04,080 Yeah. And as you say, that will take 273 00:14:04,080 --> 00:14:07,080 some time, won't it? If we look at TCFD, we're not 274 00:14:07,080 --> 00:14:09,600 seeing quite the investment flows that we'd like. 275 00:14:09,600 --> 00:14:13,120 And yet that was set up quite some time ago and TNFD feels 276 00:14:13,120 --> 00:14:17,800 like has leapfrogged some of the challenges TCFD has had, has 277 00:14:17,800 --> 00:14:20,960 moved so quickly, as you say. So you mentioned the LEAP 278 00:14:20,960 --> 00:14:23,880 approach before. And for those who don't know, 279 00:14:23,880 --> 00:14:27,040 that stands for locate, evaluate, assess and prepare. 280 00:14:27,760 --> 00:14:30,000 And that's really the. Framework for the TNFD 281 00:14:30,000 --> 00:14:33,080 disclosures, could you share how that process is helping 282 00:14:33,080 --> 00:14:37,680 investors so the finance sector in particular quantify nature 283 00:14:37,680 --> 00:14:41,560 related risks? The LEAP approach is set up to 284 00:14:41,560 --> 00:14:45,200 help investors identify and quantify risks. 285 00:14:45,680 --> 00:14:48,840 There's a particular part of the LEAP approach on risk assessment 286 00:14:48,840 --> 00:14:54,840 methods, the exciting Annex 4, which has three types of risk 287 00:14:54,840 --> 00:14:58,000 assessment methods, which we call heat mapping, asset tagging 288 00:14:58,000 --> 00:15:00,920 and scenario analysis. And it was really fun developing 289 00:15:00,920 --> 00:15:04,280 that guidance because we did it again, pilot testing with seven 290 00:15:04,280 --> 00:15:07,360 asset owners who used it in practise and gave real time 291 00:15:07,360 --> 00:15:11,040 feedback on it. Heat mapping is now, you know, 292 00:15:11,040 --> 00:15:13,440 many, many financial institutions are using it as a 293 00:15:13,440 --> 00:15:16,240 tool because it helps you look at your potential exposure. 294 00:15:16,640 --> 00:15:19,320 Then there are tools like Encore that help organisations do this 295 00:15:19,320 --> 00:15:22,160 by sector. So that's really widespread now 296 00:15:22,160 --> 00:15:24,440 the heat mapping. But in our sense it's the market 297 00:15:24,440 --> 00:15:26,280 and frustrated. OK, How do I go deeper? 298 00:15:26,640 --> 00:15:29,280 So that's how we get to be second and third methods where 299 00:15:29,280 --> 00:15:33,160 asset tagging you can use data specific to the the assets or 300 00:15:33,160 --> 00:15:36,640 the financial corporate assets to determine that exposure at a 301 00:15:36,640 --> 00:15:41,600 more granular level. So organisations are now seeing 302 00:15:41,600 --> 00:15:44,560 whether the heat is in their map and then drilling into 303 00:15:44,560 --> 00:15:47,800 individual portfolio companies where those impacts and offences 304 00:15:47,800 --> 00:15:50,440 are high might be by geography or a particular sector. 305 00:15:51,000 --> 00:15:53,640 And then finally, there's scenario analysis such as like 306 00:15:53,640 --> 00:15:56,920 the Creme de la Creme of these methods, builds on them but 307 00:15:56,920 --> 00:16:00,800 translates the exposure into actual financial implications. 308 00:16:00,800 --> 00:16:04,440 But that's obviously more demanding and it requires 309 00:16:04,560 --> 00:16:07,160 estimates of economic and financial costs and and 310 00:16:07,160 --> 00:16:10,280 modelling to convert into things like costs and revenues. 311 00:16:10,280 --> 00:16:13,120 And you have to look at that transmission of risk through to 312 00:16:13,120 --> 00:16:15,920 a particular effects through what we call transmission 313 00:16:15,920 --> 00:16:18,240 channels. So we are seeing some 314 00:16:18,320 --> 00:16:20,920 organisations starting to use scenario analysis. 315 00:16:20,920 --> 00:16:26,120 There's also some, I guess desire for credible external 316 00:16:26,160 --> 00:16:28,720 scenarios, especially for financial institutions because 317 00:16:28,720 --> 00:16:30,920 of the precedent set for climate with NGFS. 318 00:16:31,520 --> 00:16:35,240 So NGFS is continuing its work on scenario analysis, but it 319 00:16:35,240 --> 00:16:37,600 will take some years to come to the final product. 320 00:16:38,040 --> 00:16:40,640 Organisations can use our, we have a discussion paper on 321 00:16:41,480 --> 00:16:45,040 advanced analysis for scenarios, which FIS can can use in the 322 00:16:45,040 --> 00:16:47,800 meantime. So they're, you know, wait, 323 00:16:47,800 --> 00:16:51,520 they're already getting going. And that combination basically 324 00:16:51,520 --> 00:16:53,800 also what's, what do we got the risk assessment methods and the 325 00:16:53,800 --> 00:16:56,560 scenario analysis guidance and discussion paper can help. 326 00:16:57,000 --> 00:16:59,400 And I really just to finish, I really love your question about 327 00:16:59,400 --> 00:17:03,680 the cost of inaction. I actually haven't seen anyone 328 00:17:03,680 --> 00:17:07,960 framing it that way yet with the FI or corporate analysis. 329 00:17:08,480 --> 00:17:11,160 There was really interesting analysis we did for the Dasgupta 330 00:17:11,160 --> 00:17:14,359 review, which is more at the social level, which was looking 331 00:17:14,359 --> 00:17:16,560 at scenarios. I think it was Vivid Economics 332 00:17:16,560 --> 00:17:20,000 in the Natural History Museum did this analysis that found 333 00:17:20,000 --> 00:17:23,640 that immediate action on biodiversity loss above what was 334 00:17:23,640 --> 00:17:28,600 currently in place was needed to maintain biodiversity intactness 335 00:17:28,600 --> 00:17:31,720 even at today's levels. And if that action was delayed, 336 00:17:31,800 --> 00:17:35,840 I think it's about even just a decade, the cost required would 337 00:17:35,880 --> 00:17:39,240 double and the scale of the change required might be so 338 00:17:39,240 --> 00:17:41,440 large it would be infeasible to achieve. 339 00:17:42,600 --> 00:17:46,040 So that showed that by, you know, acting now this was social 340 00:17:46,040 --> 00:17:49,200 cost, but the cumulative social cost would be, you know, half 341 00:17:49,200 --> 00:17:51,960 the cost if you if you waited. And so I imagine that, you know, 342 00:17:52,040 --> 00:17:55,560 that same frame in cost of inaction could be a really 343 00:17:55,560 --> 00:17:59,560 interesting frame for scenario analysis by corporates or FIS, 344 00:17:59,560 --> 00:18:01,880 But I haven't, I haven't yet heard of that being done. 345 00:18:02,400 --> 00:18:04,960 Yeah, it's so I just, I was fascinated with multiple 346 00:18:04,960 --> 00:18:06,280 questions of what you just shared. 347 00:18:06,600 --> 00:18:10,760 But one sort of initial reflection is the businesses 348 00:18:10,760 --> 00:18:12,880 that are coming together in these sort of collective action 349 00:18:12,880 --> 00:18:15,440 groups are coming together because they understand that 350 00:18:15,440 --> 00:18:18,000 their businesses are going to be impacted and they'll have done 351 00:18:18,320 --> 00:18:22,360 some analysis on what they think those impacts are going to be. 352 00:18:22,360 --> 00:18:25,720 And therefore it justifies an investment now in Sole health or 353 00:18:25,720 --> 00:18:28,920 you know, reducing water shortage risk in a region or 354 00:18:28,920 --> 00:18:31,240 even improving flood risk reduction. 355 00:18:31,680 --> 00:18:34,640 What we're also hearing is some sort of noises around that 356 00:18:34,640 --> 00:18:38,560 number is quite hard to get to. Like what is the cost to my 357 00:18:38,560 --> 00:18:43,160 business of inaction? And therefore, how can I justify 358 00:18:43,160 --> 00:18:45,960 the cost I'm going to now have of paying farmers or land 359 00:18:45,960 --> 00:18:49,040 managers to make those changes in addition to all the sort of 360 00:18:49,040 --> 00:18:52,560 complications around how can we sort of evidence that those 361 00:18:52,560 --> 00:18:57,000 interventions will deliver on, on what we want in terms of our 362 00:18:57,000 --> 00:19:00,280 own business outcomes? So it's such a a complex piece 363 00:19:00,280 --> 00:19:04,120 that I think really needs to be picked apart sort of in terms of 364 00:19:04,120 --> 00:19:06,160 sort of piloting different scenarios in different regions. 365 00:19:06,160 --> 00:19:08,120 And they'll all be so different. But I think it will be helpful 366 00:19:08,120 --> 00:19:09,880 that we start to sort of really get to that cost base. 367 00:19:10,120 --> 00:19:12,280 And then that's even before they start to think about what's the 368 00:19:12,280 --> 00:19:17,240 cost of capital and the cost of insurance premiums resulting 369 00:19:17,240 --> 00:19:20,640 from that increased risk. And based on the kind of 370 00:19:20,640 --> 00:19:23,240 feedback actually you asked about what will be future 371 00:19:23,240 --> 00:19:26,880 priorities for us for guidance because we've received this 372 00:19:26,880 --> 00:19:31,160 feedback that it is harder to get to the financial effects of 373 00:19:31,160 --> 00:19:33,120 nature risks, but yet essential to do so. 374 00:19:33,600 --> 00:19:36,640 And that scenario analysis and risk assessment is important but 375 00:19:36,640 --> 00:19:39,920 proving tricky. We're planning to update won't 376 00:19:39,920 --> 00:19:42,680 be new guidance, but update our risk assessment guidance. 377 00:19:42,680 --> 00:19:45,680 So again, later this year we'll we'll put up a discussion paper 378 00:19:45,680 --> 00:19:49,600 on that because it's really important and we think maybe 379 00:19:49,600 --> 00:19:53,480 some practical tips and insights that we've seen from those 380 00:19:53,480 --> 00:19:55,760 putting it into practise could be helpful for others. 381 00:19:56,120 --> 00:19:58,360 That would be great. So coming back to some of the 382 00:19:58,360 --> 00:20:00,120 things you said earlier, you talked about the heat mapping. 383 00:20:00,360 --> 00:20:03,800 So it sounds like things have moved along and this this old 384 00:20:03,800 --> 00:20:06,200 phrase that used to get rolled out a lot, which was, oh, you 385 00:20:06,200 --> 00:20:09,560 know, the data's the problem. Seems like maybe that's not 386 00:20:09,560 --> 00:20:11,680 quite so much the case today. I don't know what. 387 00:20:11,680 --> 00:20:12,600 What? What do you think? 388 00:20:13,120 --> 00:20:16,960 The data's not a prohibitive problem but details still a 389 00:20:16,960 --> 00:20:20,880 challenge to get my messaging right because there is data that 390 00:20:20,880 --> 00:20:23,320 is accessible and decision useful for sure. 391 00:20:23,320 --> 00:20:26,320 And we can, we can see from the number of TNFD reports coming 392 00:20:26,320 --> 00:20:29,680 out already, some organisations have already done 2 TNFD reports 393 00:20:29,680 --> 00:20:32,720 and multiple LEAP assessments. It's funny, I was in a training, 394 00:20:32,720 --> 00:20:35,320 our first training programme we did and somebody said, oh, this 395 00:20:35,320 --> 00:20:37,200 LEAP approach seems too tricky. And it was wonderful. 396 00:20:37,200 --> 00:20:40,720 Somebody who's being trained said, but I've already done 4 397 00:20:40,720 --> 00:20:43,360 LEAP assessments. It's not that tricky. 398 00:20:43,360 --> 00:20:45,040 It's just you know, this idea of it being it. 399 00:20:45,400 --> 00:20:48,640 So as my first message is definitely doing feel paralysed 400 00:20:48,640 --> 00:20:51,240 if you haven't got it started. There's plenty of relevant data 401 00:20:51,240 --> 00:20:58,720 out there and and analytics tools, but there is a but as the 402 00:20:58,880 --> 00:21:02,360 demand for this data is growing and the maturity of this with 403 00:21:02,480 --> 00:21:06,160 increasing interest from the standard setters and from 404 00:21:06,160 --> 00:21:09,040 regulators. This means that and the the 405 00:21:09,040 --> 00:21:11,800 requirements of audit and assurance around reporting, 406 00:21:12,400 --> 00:21:16,400 verifying targets and so on, the need for timely, comprehensive 407 00:21:16,480 --> 00:21:19,720 decision, useful, credible, accessible data is growing and 408 00:21:19,720 --> 00:21:22,840 there is a mismatch especially on data on the state of nature. 409 00:21:22,840 --> 00:21:26,440 So the health of nature, ecosystems and species we see as 410 00:21:26,440 --> 00:21:30,880 a particular first blocker, which is why TNFD now has a 411 00:21:30,920 --> 00:21:33,920 small set of data initiatives to try to help working with many, 412 00:21:33,920 --> 00:21:38,640 many partners to improve that. So we've been working on data 413 00:21:38,640 --> 00:21:41,480 since the very beginning, but right now this year we're doing 414 00:21:41,520 --> 00:21:45,840 pilot testing with market participants both that upstream, 415 00:21:45,840 --> 00:21:49,120 what we call upstream in the data value chain, upstream data 416 00:21:49,120 --> 00:21:53,040 providers that might be Earth observation data, makes sensing 417 00:21:53,040 --> 00:21:56,680 or ground truth data like environmental DNA all the way 418 00:21:56,680 --> 00:21:59,240 through to those organisations that are using that data. 419 00:21:59,240 --> 00:22:02,800 They might be again downstream in the data value chain. 420 00:22:02,800 --> 00:22:07,160 These are analytics tool developers or the final users 421 00:22:07,160 --> 00:22:09,280 like the financial institutions and corporates using the data. 422 00:22:09,280 --> 00:22:13,280 And so we're putting a mock up of a data facility together kind 423 00:22:13,280 --> 00:22:17,200 of a sandbox to see how it would work, putting real data from 424 00:22:17,200 --> 00:22:21,000 that up to those upstream groups into it and then testing how how 425 00:22:21,000 --> 00:22:22,840 does it work, how can we improve it with the set of data 426 00:22:22,840 --> 00:22:26,640 principles to make it credible, transparency around that 427 00:22:26,640 --> 00:22:29,400 trustworthiness of the data and all of that. 428 00:22:29,520 --> 00:22:33,240 We hope again by November to produce a blueprint for this 429 00:22:33,440 --> 00:22:36,760 Open Access data facility as well as a set of important 430 00:22:36,760 --> 00:22:40,200 changes that might be needed around not just a facility, but 431 00:22:40,200 --> 00:22:43,600 improvements for example, in funding upstream data. 432 00:22:44,280 --> 00:22:48,240 So it it will likely also provide an investment case which 433 00:22:48,400 --> 00:22:50,640 probably would be most appropriate for governments and 434 00:22:50,800 --> 00:22:54,080 and philanthropy to support this going forwards. 435 00:22:54,360 --> 00:22:57,440 So yeah, don't be held back by data, but we are working 436 00:22:57,440 --> 00:22:59,640 actively to improve it. Right. 437 00:22:59,920 --> 00:23:02,720 Well, and also, I suppose that sort of begs the question, I 438 00:23:02,800 --> 00:23:06,200 mean, to what extent should governments be or what extent 439 00:23:06,200 --> 00:23:09,680 are they very aware of this need for data and therefore 440 00:23:09,680 --> 00:23:12,720 supporting the provision of data? 441 00:23:12,720 --> 00:23:16,320 Presumably, one would hope they are capturing at least sort of 442 00:23:16,320 --> 00:23:20,680 the state of nature across their own regions and nations. 443 00:23:21,000 --> 00:23:23,640 Yeah, there's been real interest in our data work from 444 00:23:23,640 --> 00:23:27,600 governments, a few in particular to track the work but also to 445 00:23:27,600 --> 00:23:30,480 fund this work. So I think governments recognise 446 00:23:30,480 --> 00:23:33,360 this and they also feel that they can play a role to improve 447 00:23:33,360 --> 00:23:35,600 this. But increasingly, of course, the 448 00:23:35,600 --> 00:23:37,440 private sector is also collecting data. 449 00:23:37,440 --> 00:23:42,000 So I think this ability to share data both from the public sector 450 00:23:42,000 --> 00:23:45,720 through their work for ecosystem accounting and local field data 451 00:23:45,720 --> 00:23:48,760 and so on, which is, you know, often really useful for 452 00:23:48,760 --> 00:23:50,440 companies. But then the companies 453 00:23:50,440 --> 00:23:54,400 themselves might be collecting, for example, environmental DNA 454 00:23:54,400 --> 00:23:57,120 data on their own sites for a mining company. 455 00:23:57,480 --> 00:23:59,920 We know of some that are spending 10s of millions on 456 00:23:59,920 --> 00:24:03,720 that, where they may also be willing to share that which the 457 00:24:03,720 --> 00:24:06,800 public sector governments may benefit from that to understand 458 00:24:07,480 --> 00:24:10,160 how things are tracking towards the goals and targets in the 459 00:24:10,160 --> 00:24:12,320 global biodiversity framework. So I think there's lots of 460 00:24:12,320 --> 00:24:15,160 connection between public and private sector on data. 461 00:24:15,880 --> 00:24:19,040 And obviously there's like the data collection of like what is 462 00:24:19,040 --> 00:24:22,160 the level of health in the landscape in which you're 463 00:24:22,160 --> 00:24:25,520 operating, for example. And then there's like a level of 464 00:24:25,520 --> 00:24:28,880 data around that tracks with OK if you're going to make certain 465 00:24:28,880 --> 00:24:31,600 interventions on those landscapes. 466 00:24:32,200 --> 00:24:35,560 And are you seeing that granularity of detail at a local 467 00:24:35,560 --> 00:24:39,840 level that can show how actions can result in positive change? 468 00:24:40,320 --> 00:24:43,880 One of the things I was really excited about on my recent trip 469 00:24:43,880 --> 00:24:47,800 to Japan where I met with the government representatives, 470 00:24:47,800 --> 00:24:50,480 there wasn't so much on the question you just asked, but it 471 00:24:50,480 --> 00:24:54,320 was clear that they are taking steps to me from the global 472 00:24:54,320 --> 00:24:56,720 goals and targets under the Global Biodiversity Framework 473 00:24:56,720 --> 00:24:59,720 down to the national level, be the National Biodiversity 474 00:24:59,720 --> 00:25:02,960 Strategy and Action Plan. The NV Subs, but then defining 475 00:25:02,960 --> 00:25:07,680 it at the local level by prefecture and so there they 476 00:25:07,680 --> 00:25:10,280 have a process. Why by individual prefectures 477 00:25:10,280 --> 00:25:14,680 are saying, right, this is what we want to achieve locally in 478 00:25:14,680 --> 00:25:17,360 terms of the health of nature, the state of nature. 479 00:25:18,120 --> 00:25:22,880 And that then provides the clarity that business needs and 480 00:25:22,880 --> 00:25:27,160 their investors need to say this is what we can contribute. 481 00:25:27,320 --> 00:25:30,040 And it might be say a particular region where they have 482 00:25:30,040 --> 00:25:33,320 dependencies or water or different E system services. 483 00:25:33,320 --> 00:25:36,360 And so they would then like to contribute to specific targets 484 00:25:36,360 --> 00:25:38,640 credibly set by governments. I was very encouraged that 485 00:25:38,640 --> 00:25:43,160 that's starting to happen there because again, if there's going 486 00:25:43,160 --> 00:25:45,840 to be that investment, there needs to be that clarity on 487 00:25:46,080 --> 00:25:49,320 where to achieve what, not just from the business perspective, 488 00:25:49,320 --> 00:25:52,960 but for society more broadly. Well, that's super interesting 489 00:25:53,080 --> 00:25:56,720 because that's exactly the kind of level that we may then see 490 00:25:56,720 --> 00:25:59,320 businesses start to act. So I know I've talked about this 491 00:25:59,320 --> 00:26:02,320 before, but in England specifically, we've been looking 492 00:26:02,320 --> 00:26:07,720 into a regional but really local level potential for a Co 493 00:26:07,720 --> 00:26:09,960 investment. So looking at where nature 494 00:26:09,960 --> 00:26:14,240 degradation and climate change is, is impacting businesses and 495 00:26:14,240 --> 00:26:17,400 then is that where we can attract that investment from 496 00:26:17,400 --> 00:26:20,600 those businesses because of resilience purposes. 497 00:26:21,040 --> 00:26:25,120 But the question is so sort of how can we embed that into 498 00:26:25,200 --> 00:26:29,000 national government targets and. Just to come in, I think it's 499 00:26:29,000 --> 00:26:31,440 really complemented because that's the sort of location 500 00:26:31,440 --> 00:26:34,880 specific level where we need clarity on what the targets are 501 00:26:34,880 --> 00:26:37,280 cascading down from global to national to local. 502 00:26:37,800 --> 00:26:41,200 But then there's been this inspiration again from climate 503 00:26:41,200 --> 00:26:44,200 on sector transition pathways. That's where you might, you 504 00:26:44,200 --> 00:26:46,680 might have the local scale definition, but then what does 505 00:26:46,680 --> 00:26:48,320 that mean for a particular sector? 506 00:26:48,880 --> 00:26:52,280 So yeah, taking inspiration for how decarbonisation sector 507 00:26:52,280 --> 00:26:56,200 transition pathways supported climate transition planning, we 508 00:26:56,200 --> 00:27:00,840 also see that being needed for nature now to enable investors 509 00:27:00,880 --> 00:27:04,160 and others who are using transition plans to assess their 510 00:27:04,160 --> 00:27:07,040 credibility. It's not something TNFD is 511 00:27:07,040 --> 00:27:09,760 doing, but we're calling for action on because we think that 512 00:27:09,760 --> 00:27:12,760 could provide this useful reference to mobilise the flows 513 00:27:12,760 --> 00:27:16,160 of capital isn't even rightly saying it's very important. 514 00:27:16,800 --> 00:27:20,120 We know there's some early work by by WWF, business Nature, 515 00:27:20,120 --> 00:27:23,800 WBCSDEUF and so on. And, and I believe maybe GFI is 516 00:27:24,480 --> 00:27:26,240 doing some further work on this with partners. 517 00:27:26,240 --> 00:27:30,120 So we think that's really important part of the work that 518 00:27:30,120 --> 00:27:32,960 needs to be done to get from where we've got with TNFD 519 00:27:33,600 --> 00:27:36,640 beginning to have reporting, really useful in assessments, 520 00:27:36,640 --> 00:27:39,480 providing insight and then the transition plans coming out. 521 00:27:39,680 --> 00:27:42,760 We need clarity for investors to show right what does good, bad 522 00:27:42,760 --> 00:27:45,880 and the transition from bad to good look like by by sectors. 523 00:27:46,360 --> 00:27:47,760 Yeah. And just to pick up on that, So 524 00:27:48,000 --> 00:27:51,760 yes, we are doing some work with WWF specifically in the UK on 525 00:27:51,760 --> 00:27:54,080 what what's been called nature positive pathways. 526 00:27:54,080 --> 00:27:58,160 But yes, they are nature sectoral transition pathways 527 00:27:58,160 --> 00:28:00,960 essentially. And and that comes back to that 528 00:28:00,960 --> 00:28:03,480 point on the locality. You can do them by sector, but 529 00:28:03,480 --> 00:28:05,960 then, you know, if you're a sector working in just using the 530 00:28:05,960 --> 00:28:09,600 UK as an example in the North where you know, maybe less 531 00:28:09,600 --> 00:28:13,920 impacted by water shortages, although actually in the Humber 532 00:28:13,920 --> 00:28:15,360 they are being impacted by water shortages. 533 00:28:15,520 --> 00:28:17,840 Then maybe down in East Anglia where there's high drought. 534 00:28:18,120 --> 00:28:21,280 It's a different kind of action that needs to be taken. 535 00:28:21,280 --> 00:28:23,400 So it is, it's very nuanced. It'll be interesting to see how 536 00:28:23,400 --> 00:28:27,880 that piece of work plays out with my, my colleagues in WWF in 537 00:28:27,880 --> 00:28:30,040 the UK at least. And, and, and from what I said 538 00:28:30,040 --> 00:28:33,400 from WWF, it's something that's been talked about in multiple 539 00:28:33,400 --> 00:28:36,600 jurisdictions, these sectoral pathways. 540 00:28:37,120 --> 00:28:41,000 It's great. Well, I think or hope that if 541 00:28:41,000 --> 00:28:44,000 government is involved in that Co design of those transition 542 00:28:44,000 --> 00:28:46,480 pathways that we, you know, we just mentioned, then it can also 543 00:28:46,480 --> 00:28:50,920 help inform them or inform government on where the policy 544 00:28:50,920 --> 00:28:55,120 levers or fiscal levers are going to be needed to ensure 545 00:28:55,120 --> 00:28:59,320 that any pathways are, are just not, not just like on paper only 546 00:28:59,320 --> 00:29:02,280 because we spend a lot of time here talking about how we can 547 00:29:02,280 --> 00:29:06,760 really ensure there are concrete drivers and sometimes that needs 548 00:29:06,760 --> 00:29:09,720 to be through that regulatory side and that's needed to move 549 00:29:09,720 --> 00:29:11,640 business. Do you have any thoughts on 550 00:29:11,640 --> 00:29:12,560 that? I know it's a bit of a leading 551 00:29:12,560 --> 00:29:15,560 question to talk about regulation, but we'll be keen to 552 00:29:15,560 --> 00:29:17,160 hear. Of course, yes. 553 00:29:17,160 --> 00:29:19,720 But with my TNFD hat, we're a voluntary framework. 554 00:29:19,720 --> 00:29:22,320 We're not a standard setter, We're not the regulator and we 555 00:29:22,320 --> 00:29:24,920 can't advocate for that. But of course, seeing the 556 00:29:24,920 --> 00:29:29,960 pathway of TCFD and it's being folded into the ISSBST climate 557 00:29:29,960 --> 00:29:33,800 disclosure standard globally and being required and mandatory in 558 00:29:33,800 --> 00:29:36,200 several jurisdictions, we know that that is an important 559 00:29:36,200 --> 00:29:38,600 scaling strategy. It's just that that's not our 560 00:29:38,600 --> 00:29:41,120 role. Our role is to build the market, 561 00:29:41,120 --> 00:29:44,720 practise the market experience, which should encourage standard 562 00:29:44,720 --> 00:29:47,880 setters and regulators. Now the maturity is there, I 563 00:29:47,880 --> 00:29:50,240 think for them to start to consider this. 564 00:29:50,240 --> 00:29:54,560 And yeah, there's a quite a few interesting examples that are 565 00:29:54,560 --> 00:29:58,560 starting to blossom. So the team is telling me that 566 00:29:58,560 --> 00:30:01,400 in Chile, they've issued a pilot on a business action plan on 567 00:30:01,400 --> 00:30:04,200 biodiversity that includes recommendations to implement 568 00:30:04,200 --> 00:30:07,360 TNFD. In Malaysia, their central Bank 569 00:30:07,400 --> 00:30:11,480 and Bank Nagara Malaysia is developing guidance right now 570 00:30:11,480 --> 00:30:15,160 for the financial sector on assessing emerging nature 571 00:30:15,160 --> 00:30:18,880 related risks, which is aligned to the TNFD to help banks and 572 00:30:18,880 --> 00:30:24,240 other FIS understand this. And Japan, as always is ahead. 573 00:30:24,240 --> 00:30:26,840 They've got an H positive economy transition strategy and 574 00:30:26,840 --> 00:30:29,360 their government is been actively encouraging companies 575 00:30:29,360 --> 00:30:32,840 to adopt TNFD for some time and including a training programme. 576 00:30:33,440 --> 00:30:34,920 And then there are some interesting examples. 577 00:30:34,920 --> 00:30:38,960 In Africa, Botswana and Rwanda have issued disclosure guidance 578 00:30:38,960 --> 00:30:42,320 for their stock exchanges explicitly referred to TNFD. 579 00:30:42,960 --> 00:30:46,080 And then finally, in India, we're actually now working with 580 00:30:46,080 --> 00:30:49,520 the Confederation of Indian Industries on a document that 581 00:30:49,520 --> 00:30:52,160 shows how they're reporting standards in India. 582 00:30:52,160 --> 00:30:54,160 They're called Business Responsibility and 583 00:30:54,160 --> 00:30:58,400 Sustainability reporting. BRSR mandated by the Security 584 00:30:58,640 --> 00:31:02,120 and Exchange Board of India, and it's mandatory for the top 1000 585 00:31:02,120 --> 00:31:05,520 listed companies. It shows how BRSR already covers 586 00:31:05,520 --> 00:31:08,960 nature to some extent, but then the TNFT LEAP approach and the 587 00:31:08,960 --> 00:31:10,920 alignment with the recommendations can complement 588 00:31:10,920 --> 00:31:12,640 that. So actually you've got almost 589 00:31:12,640 --> 00:31:15,400 every continent taking really interesting action. 590 00:31:15,920 --> 00:31:18,320 And of course, you know, obviously we almost always talk 591 00:31:18,320 --> 00:31:21,320 about Europe in this case, but the European sustainability 592 00:31:21,320 --> 00:31:23,760 proportioning standards were being developed at the same time 593 00:31:23,760 --> 00:31:26,360 as the TNFD framework and we work closely with them, which is 594 00:31:26,360 --> 00:31:29,880 why there's that high level of alignment between all of the 14 595 00:31:29,880 --> 00:31:33,520 recommended disclosures in TNFD and what's now mandatory under 596 00:31:33,520 --> 00:31:35,640 CSID. Of course, you know, of the 597 00:31:35,640 --> 00:31:39,080 simplification still to, to be worked through in the coming 598 00:31:39,080 --> 00:31:41,080 months. So I think, you know, this is 599 00:31:41,080 --> 00:31:43,200 all happening in real time already. 600 00:31:43,320 --> 00:31:47,320 It it's not, it's not the same sequencing as happened with 601 00:31:47,320 --> 00:31:49,400 climate. A lot of it is blossoming very 602 00:31:49,400 --> 00:31:52,320 quickly. And do you sort of see what's 603 00:31:52,320 --> 00:31:54,320 driving certain countries to lead? 604 00:31:54,320 --> 00:31:56,840 You know, Japan is the one we always talk about more adopters. 605 00:31:56,880 --> 00:31:59,640 You know, I think it's, I think the UK is a second and Japan has 606 00:31:59,880 --> 00:32:02,560 sort of double or even triple the number of adopters that we 607 00:32:02,560 --> 00:32:04,760 have. Like what do you think is 608 00:32:04,760 --> 00:32:07,080 driving these individual countries? 609 00:32:07,080 --> 00:32:09,800 Is it just good leadership if I can say that? 610 00:32:10,720 --> 00:32:13,640 Well, I, I mean, I say this humbly because I don't, it's a 611 00:32:13,640 --> 00:32:16,520 hard question to answer, but I have just come back from this 612 00:32:17,040 --> 00:32:20,160 really inspiring trip to Japan where I observed a number of 613 00:32:20,160 --> 00:32:23,480 things that I think may have played into the strong uptake 614 00:32:23,480 --> 00:32:25,880 there. The desire for leadership both 615 00:32:25,880 --> 00:32:28,600 from the public and private sector, the role of government 616 00:32:28,600 --> 00:32:32,240 in supporting, for example, through capacity building of the 617 00:32:32,240 --> 00:32:36,320 private sector on the LEAP approach and TNFD reporting. 618 00:32:36,920 --> 00:32:40,800 I think there's also an amazing cultural connection to nature 619 00:32:41,200 --> 00:32:45,440 and a deep understanding of the benefits of managing nature loss 620 00:32:45,440 --> 00:32:47,600 and improving nature. I mean, they're really 621 00:32:47,600 --> 00:32:49,840 interested in the conservation and restoration side in 622 00:32:49,840 --> 00:32:52,480 particular. And then the experience of of 623 00:32:52,480 --> 00:32:55,840 climate where you know, people have learnt from TCFD and that 624 00:32:55,840 --> 00:32:59,160 may or may not have sown the seed for them to want to take a 625 00:32:59,160 --> 00:33:02,280 leadership role. I think in Japan it has so 626 00:33:02,680 --> 00:33:05,600 different things in different jurisdictions, but it's not just 627 00:33:05,600 --> 00:33:07,280 Japan. I'm particularly excited about 628 00:33:07,280 --> 00:33:11,760 Asia as a continent and the interest in nature in other 629 00:33:11,760 --> 00:33:13,320 areas. And it's growing very strongly 630 00:33:13,320 --> 00:33:17,680 in Japan, in Korea, across Southeast Asia and in India. 631 00:33:17,680 --> 00:33:22,080 So yeah, watch that space, I'd say for for Asia's leadership on 632 00:33:22,080 --> 00:33:27,000 this topic. Which is extremely positive and. 633 00:33:27,320 --> 00:33:29,080 Should we talk about the US at all? 634 00:33:31,400 --> 00:33:33,720 Yeah. I mean, in the US, we are still 635 00:33:33,720 --> 00:33:39,400 slow, as you might expect for adoption of the TNF DS 636 00:33:39,400 --> 00:33:42,200 disclosure recommendations because disclosure itself is 637 00:33:42,200 --> 00:33:44,560 tricky. I think we're at about 22 638 00:33:44,640 --> 00:33:47,880 adopters in the USI think I felt that right. 639 00:33:48,840 --> 00:33:53,640 But I can also see who is downloading our guidance by 640 00:33:53,640 --> 00:33:57,640 country and jurisdiction. And in the US, downloads for 641 00:33:57,640 --> 00:34:01,160 example, of our elite guidance and accompanying guidance on 642 00:34:01,160 --> 00:34:04,880 different topics remains high in the conversations we're having 643 00:34:04,880 --> 00:34:09,239 in the US suggest that many organisations are doing leave 644 00:34:09,239 --> 00:34:11,960 assessments, they're using our guidance, they're doing their 645 00:34:12,000 --> 00:34:16,199 internal due diligence because they recognise they've got risks 646 00:34:16,199 --> 00:34:18,120 and opportunities they want to manage and seize. 647 00:34:18,120 --> 00:34:22,159 It's just the disclosure that has become tricky for them and 648 00:34:22,159 --> 00:34:25,520 that has been tricky for some time, even pre the election. 649 00:34:26,040 --> 00:34:28,639 So that's where I think we're at. 650 00:34:29,000 --> 00:34:31,080 Well, that's really positive. To hear that things are moving 651 00:34:31,080 --> 00:34:35,560 in the US for sure, but as we start to wrap up here, it would 652 00:34:35,560 --> 00:34:39,800 be great to hear about current and future initiatives of the 653 00:34:39,800 --> 00:34:42,000 TNFD. So while I have you, this is a 654 00:34:42,000 --> 00:34:45,639 bit of a, a different discussion, I suppose, but I 655 00:34:45,639 --> 00:34:48,000 just wondered if you could share about the work of Nature 656 00:34:48,000 --> 00:34:50,840 positive Initiative and what you're doing there because you 657 00:34:50,840 --> 00:34:52,560 know, it's a term that's still being defined. 658 00:34:52,560 --> 00:34:56,040 I know, but we are using a lot and it will sort of help 659 00:34:56,120 --> 00:34:59,400 potentially with that move towards unlocking investment. 660 00:34:59,840 --> 00:35:04,000 The Nature Positive Initiative is a organisation that has it's, 661 00:35:04,000 --> 00:35:07,480 it has 27 member organisations that includes major conservation 662 00:35:07,480 --> 00:35:10,080 NGOs, science bodies and some of the business bodies like 663 00:35:10,080 --> 00:35:11,640 ourselves. So TNFD is a member of the 664 00:35:11,640 --> 00:35:14,120 Nature Positive Initiative and the Nature Positive Initiative 665 00:35:14,120 --> 00:35:16,240 is doing 2 really important things. 666 00:35:16,240 --> 00:35:18,800 The first was to provide a credible definition of what 667 00:35:18,800 --> 00:35:23,280 Nature Positive actually means because it was being bandied 668 00:35:23,280 --> 00:35:27,160 about, used in association with a product ahead of nature 669 00:35:27,160 --> 00:35:29,200 positive burgers and nature Positive wheat. 670 00:35:29,360 --> 00:35:31,360 And this gives me the heebie jeebies. 671 00:35:31,360 --> 00:35:35,800 So actually giving us a definition of what does nature 672 00:35:35,800 --> 00:35:38,360 positive mean. It's an outcome aligned with the 673 00:35:38,360 --> 00:35:43,880 Global Biodiversity Frameworks vision, so halting and reversing 674 00:35:43,880 --> 00:35:48,280 nature loss by 20-30, achieving against a 2020 baseline and 675 00:35:48,320 --> 00:35:52,200 achieving full recovery by 2050. So that's really helped us to 676 00:35:52,200 --> 00:35:55,840 have an agreed credible definition in writing. 677 00:35:56,080 --> 00:35:59,160 But then they've also now moving into, OK, we've got that 678 00:35:59,160 --> 00:36:02,880 definition, how we're going to measure it And going back to our 679 00:36:02,920 --> 00:36:04,880 guidance metrics and recommendations, back in 680 00:36:04,880 --> 00:36:09,400 September 2023, we used this term placeholder for our state 681 00:36:09,400 --> 00:36:11,840 of nature metrics. And we used placeholder because 682 00:36:11,840 --> 00:36:15,360 we wanted to encourage state of nature measurement, but we also 683 00:36:15,360 --> 00:36:19,360 had to acknowledge that there wasn't consensus in the 684 00:36:19,360 --> 00:36:23,040 scientific community or indeed amongst the private sector on 685 00:36:23,040 --> 00:36:25,760 what those metrics should be. There is at the indicator level, 686 00:36:26,400 --> 00:36:28,160 but not the level of specific metrics. 687 00:36:28,800 --> 00:36:31,360 So what the Nature Positive initiative is doing this year 688 00:36:31,360 --> 00:36:33,560 and we're working with them is pilot testing. 689 00:36:33,600 --> 00:36:38,040 So we have draught metrics on ecosystem extent and condition, 690 00:36:38,120 --> 00:36:40,800 species abundance, species extinction risk, things like 691 00:36:40,800 --> 00:36:43,960 this at the indicator level and then having much more specific 692 00:36:43,960 --> 00:36:45,840 metrics. And they're being pilot tested 693 00:36:45,840 --> 00:36:49,720 with over 30 organisations. TNFD is leading the support to 694 00:36:49,720 --> 00:36:53,440 14 of those so that by the end of this year, she have really 695 00:36:53,440 --> 00:36:56,400 useful feedback on how practical are that they, how useful are 696 00:36:56,400 --> 00:36:59,640 they science communities also looking at how robust they are. 697 00:36:59,800 --> 00:37:04,000 So that will help us early next year learn from all of that. 698 00:37:04,200 --> 00:37:06,120 And maybe you'll be able to do an update that takes that 699 00:37:06,120 --> 00:37:09,920 wordplace help holder out. We could update our assessment 700 00:37:09,920 --> 00:37:13,920 guidance and indeed our our metrics lists on the basis of of 701 00:37:13,920 --> 00:37:15,760 that learning. And I think the reason that's 702 00:37:15,760 --> 00:37:19,200 really important coming back to the topic of your the podcast 703 00:37:19,200 --> 00:37:21,800 here is because this moves to outcomes. 704 00:37:21,800 --> 00:37:25,600 And our focus has been on drivers of impact, drivers of 705 00:37:25,600 --> 00:37:29,080 change, which are still very useful leading indicators. 706 00:37:29,520 --> 00:37:32,840 But ultimately, we also need to have some way of measuring 707 00:37:32,880 --> 00:37:36,320 outcomes. And so this helps us take a step 708 00:37:36,440 --> 00:37:39,000 towards that. Yeah, yeah, totally see that. 709 00:37:39,800 --> 00:37:42,800 So just finally, you know, it'd be great to hear before you go, 710 00:37:42,800 --> 00:37:45,720 you know, what do you see as the biggest barriers at the moment 711 00:37:45,720 --> 00:37:49,360 to investment into nature? On, on. 712 00:37:49,360 --> 00:37:51,560 On the flip side, what's keeping you optimistic? 713 00:37:52,520 --> 00:37:55,960 I think perception is a big barrier. 714 00:37:56,480 --> 00:38:02,040 So continuing to see this as a niche topic and a new topic and 715 00:38:02,040 --> 00:38:05,640 that the projects are small and that it only relates to certain 716 00:38:05,640 --> 00:38:09,520 number of sectors, that gives me hope because I think that it 717 00:38:09,520 --> 00:38:12,560 should be an easy thing to fix if perception is the problem. 718 00:38:12,880 --> 00:38:15,800 Nature, you know, nature investment is not niche, it's 719 00:38:15,800 --> 00:38:18,240 hugely scalable. And I think some of the recent 720 00:38:18,240 --> 00:38:20,080 work of Bloomberg or nature related opportunities for 721 00:38:20,080 --> 00:38:25,040 reducing harm shows that we have large scale investments that can 722 00:38:25,040 --> 00:38:30,320 produce a return now across a huge number of sectors. 723 00:38:30,440 --> 00:38:33,560 So I think that's one of the main challenges and one of the 724 00:38:33,560 --> 00:38:36,200 things we hate with the publication we're going to do is 725 00:38:36,200 --> 00:38:41,040 to help to to clarify that this is both about reducing harm as 726 00:38:41,040 --> 00:38:43,920 well as restoration, conservation and regeneration. 727 00:38:44,240 --> 00:38:48,240 So yeah, that's where I've got to in my thinking so far. 728 00:38:49,360 --> 00:38:52,520 More to come. Yeah, no, love it And I couldn't 729 00:38:52,520 --> 00:38:55,360 agree more. It does seem like nature was 730 00:38:55,360 --> 00:38:58,120 sort of pitched as a bit sort of side and niche and actually 731 00:38:58,120 --> 00:39:00,880 like, well, no, it's, it's huge actually. 732 00:39:00,880 --> 00:39:03,680 And lots of stuff is happening everyday that's around investing 733 00:39:03,680 --> 00:39:07,320 in nature and reducing impacts. On the other side, just to 734 00:39:07,520 --> 00:39:12,200 finish our breaking thought is I do think as we do scale this, it 735 00:39:12,200 --> 00:39:14,680 will potentially be disruptive going back to what we're talking 736 00:39:14,680 --> 00:39:18,200 about transition. So nature when perceived as 737 00:39:18,200 --> 00:39:21,920 niche is not seen as a threat. But once there's a recognition 738 00:39:21,920 --> 00:39:24,920 that this is a sizeable transition, you know, is is 739 00:39:24,920 --> 00:39:27,640 taking place now there will be disruption to this that's 740 00:39:27,640 --> 00:39:30,720 unestablished sexism, sub sectors that are harmful. 741 00:39:30,720 --> 00:39:34,600 And so that's when I think we'll get really interesting in how we 742 00:39:34,600 --> 00:39:39,000 all handle as we have had to for climate handling that for a just 743 00:39:39,200 --> 00:39:40,640 transition. Right. 744 00:39:40,760 --> 00:39:45,680 And all the political. The challenges, it's absolutely 745 00:39:46,800 --> 00:39:48,600 brilliant. Well, and as you leave us, tell 746 00:39:48,600 --> 00:39:50,800 us anything you've you've gone through quite a lot that you're 747 00:39:50,800 --> 00:39:53,320 doing and that's upcoming, but anything else that you wanted to 748 00:39:53,320 --> 00:39:56,600 mention around sort of what to look out for next from TNFD over 749 00:39:56,600 --> 00:39:59,280 the coming months? Big things that are coming from 750 00:39:59,280 --> 00:40:03,160 us will be our status report in September, which will show 751 00:40:03,160 --> 00:40:06,120 adoption of the TNF DS recommendations and our guidance 752 00:40:06,160 --> 00:40:08,400 for the first time, you know, across different sectors and 753 00:40:08,400 --> 00:40:10,600 geographies to look out for that in September at New York Climate 754 00:40:10,600 --> 00:40:12,400 Week. We'll be publishing a set of 755 00:40:12,400 --> 00:40:15,720 case studies of nature related opportunities and a discussion 756 00:40:15,720 --> 00:40:18,720 paper on how we should improve our risk assessment guidance and 757 00:40:18,720 --> 00:40:22,240 then our final transition planning guidance as well as 758 00:40:22,240 --> 00:40:23,920 this road map for a data facility. 759 00:40:23,920 --> 00:40:27,920 So those are the four or five big pieces coming out that I've 760 00:40:27,920 --> 00:40:30,640 mentioned this year. Early next year, if I can go 761 00:40:30,640 --> 00:40:33,480 into January, we're doing 2 further sector guidance 762 00:40:33,480 --> 00:40:35,600 documents for the technology sector. 763 00:40:35,600 --> 00:40:38,120 So that will cover semiconductors, data centres, 764 00:40:38,120 --> 00:40:41,040 all sorts of hot topics. Oh yeah, brilliant alternative 765 00:40:41,040 --> 00:40:42,840 fuels. So that will cover biofuels and 766 00:40:42,920 --> 00:40:45,040 hydrogen and more. So two really interesting 767 00:40:45,040 --> 00:40:47,760 sectors and we'll put out that draught guidance in January next 768 00:40:47,760 --> 00:40:48,520 year. Ah. 769 00:40:48,840 --> 00:40:52,440 In time for the best conference meeting for. 770 00:40:52,920 --> 00:40:56,440 And Dallas 2 very different, yes. 771 00:40:59,120 --> 00:41:00,760 Great. Well, it sounds like you are not 772 00:41:00,760 --> 00:41:02,840 going to have a quiet summer, so I'm sorry for that. 773 00:41:02,840 --> 00:41:07,560 Emily, got a lot on. But thank you so much for taking 774 00:41:07,560 --> 00:41:10,840 time out today to join us. And yeah, really looking forward 775 00:41:10,840 --> 00:41:13,880 to, you know, keeping abreast of all the work that you're doing 776 00:41:13,880 --> 00:41:15,560 and then having you back for a Season 3. 777 00:41:16,160 --> 00:41:17,400 Thanks Helen, I look forward to it. 778 00:41:17,400 --> 00:41:27,200 It's a pleasure, as always. So that's it for this week. 779 00:41:27,200 --> 00:41:31,960 You can find out more about the TNFD at TNFD dot global. 780 00:41:32,360 --> 00:41:36,160 I mentioned also in this episode that we did do an episode with 781 00:41:36,160 --> 00:41:39,480 Emily a couple of years ago now that can give you a bit of a 782 00:41:39,480 --> 00:41:43,560 primer on the TNFD at the very beginnings of it was being set 783 00:41:43,560 --> 00:41:45,400 up. Next week, however, we're going 784 00:41:45,400 --> 00:41:47,520 to be looking at biodiversity net gain. 785 00:41:47,520 --> 00:41:50,560 That's England's compliance market, where I'm going to be 786 00:41:50,560 --> 00:41:54,480 joined by Thomas Pickford from The Nature Conservancy and Glenn 787 00:41:54,480 --> 00:41:58,680 Anderson, who leads the Wendling Beck project in East Anglia in 788 00:41:58,680 --> 00:42:01,960 England that brings together 4 land managers and farmers that 789 00:42:01,960 --> 00:42:04,160 are selling B&G units. So we're actually going to 790 00:42:04,440 --> 00:42:07,680 really get to hear from someone like on the ground bringing that 791 00:42:07,680 --> 00:42:09,160 project to life. And we'll be getting quite 792 00:42:09,160 --> 00:42:11,840 technical and in the weeds as well on some of the the 793 00:42:11,840 --> 00:42:15,600 challenges and issues around sort of rolling out about B&G. 794 00:42:15,600 --> 00:42:18,560 We'll also be touching on the European Commission's road map 795 00:42:18,760 --> 00:42:21,280 for nature markets that launched just this month. 796 00:42:21,880 --> 00:42:25,200 So I hope you'll join us. But until then, I hope you have 797 00:42:25,200 --> 00:42:25,960 a wonderful week.