Hi, I'm Helen Avery with the Green Finance Institute and
you're listening to Financing Nature.
In this episode, I'm going to be joined by Emily McKenzie,
Technical Director at the Task Force on Nature Related
Financial Disclosures. I think in particular what's
happening is the LEAP assessment is providing insights that
inform business strategy which smart companies are doing before
they even get to disclosure. So I'll give an example of a
pharmaceutical company that undertook a very detailed strong
LEAP assessment actually found that it's nature related risks
and opportunities were greater than what they had found for
climate alone and were actually interacting.
So, you know, for example, climate change and over
extraction of particular plant species that they relied on was
it's compromising supply of pharmaceutical products and
supply chains. So that led them to take, you
know, some time to update their strategy to improve that
resilience. And then they were able to tell
not a perfect story, but a good story on their disclosures about
what their targets were and how they were going to improve every
time. But I do feel confident of
growing a number of examples where business strategy, the
resilience of business strategy is visibly improving.
And I think it shows the importance of that assessment as
well as the disclosure. Hello Anna, warm welcome to you.
I hope you are having a lovely day or evening, whatever time
you're at and wherever you are. I am going to be joined today by
Emily McKenzie of the TNFD. And we're going to be catching
up on where the TNFD is now and talking about how the assessment
of impacts and dependencies on nature that the framework
through that LEAP assessment provides can lead to action the
other side by the private sector unlocking that investment into
nature restoration or nature positive and or I should say
nature positive outcomes. So really sort of calling into
question like how do we move from disclosures into investment
the other side? Well, good afternoon, Lee.
Thank you so much for joining us today.
Hi Helen, it's great to be here. Thanks for having me.
And this is a second time you've been on vanity nature, which I
think is a first. Actually.
I'm not sure anyone else has come on twice.
So thank you for rejoining us. Fantastic.
I feel very privileged. We feel very privileged.
So the heart of this particular season is really looking at how
we're going to move private sector investment into nature
restoration and nature based solutions.
You know, obviously we'll have a conversation today, I'm hoping
about, you know, how do you move from disclosures into investment
and you know, how can disclosures help with
investment? So we'll be talking all about
the, the TNFD and what you've been seeing.
But I just wondered before we get going, as it's been a while
since you came on, if it'd be good to have a bit of an.
Update on TNFDI, know that you've done so much work over
the last. I think it's probably a good 2
1/2 years, maybe even since we spoke.
I can't remember now. But it'd be great to sort of
understand, you know, how many companies are now are working
through TNFD and, and what's the kind of guidance that you've
been putting out there and, and where are you in the whole
process of disclosures? Thanks Helen.
It's yeah, it's been 4 years I think roughly since TNFD first
began. Our Co chair David Craig said he
reached his four year anniversary and obviously a big
milestone for us was September 2023 when we publish the
disclosure recommendations and the first package of guidance.
And so kind of think of our work as being the first phase,
building to get into that milestone in the second phase
since and in that second phase, we're really driving awareness
and adoption of the disclosure recommendations and then
building capacity to do the underlying assessments and, and
use our guidance as well as trying to address things that
are proving to be tricky or or blockers or gaps like data.
But we're feeling really pleased if we just look at this really
main focus on adoption of the disclosure recommendations.
We as of October last year, so that was a year after we
published them, we were at over 500 adopters, which means
organisations committed disclose against these recommendations
which cover 54 countries or or areas 62 of the 77 sectors under
the SARS B classification system.
And in terms of publicly listed companies that covers 6 1/2
trillion U.S. dollars in market organisation.
Yeah and we have a good number of financial institutions that
almost 100 and and 30 which includes 1/4 of the world's
systemically important banks. So really pleased on the
adoption. We also know that many more,
probably thousands are using our guidance.
We don't yet have good numbers on that.
So we're actually moving towards doing our first status update
report like TCFD did. That will be in September this
year where we should start to see who's using our guidance on
the leave approach for assessment through a survey and
and so on. Oh, fantastic.
Yeah, because as you say, we know in the UK that many more
are using it than are currently sort of committed to disclosing.
And so getting on to this sort of point of, you know, how do
you and hopefully we'll come back at the end, sort of hear
about what's next for TNFD and what's coming up for you over
the next year and sort of that translation into ISSB.
But on this point of how do we move from disclosure to
investment, I just wondered, you know, how are you thinking about
this transition and you know, is the first step that you're
seeing with businesses understanding those impacts and
dependencies? Yes, because dependencies and
impacts on nature are the source of of risks and opportunities.
So that's the first basis for an assessment.
And we actually recently, just last week at London Claim Action
Week, published 7 case studies with GRI that might be of
interest to your listeners that show how companies are
identifying their risks and opportunities based on these
dependencies and impacts. So it could be their own impacts
on nature, the impacts of others on nature.
There might be external factors like climate change or or other
things that are affecting the services they depend on.
So that's the first basis, even if you're just looking from
financial materiality perspective.
And so that starting point's the assessment, But of course, it's
not the end point. And we have recently been
working on guidance on nature transition planning, which is
really action oriented. How do you transition your
strategy to contribute or respond to the transition
implied by the global biodiversity framework?
So that really has been nice to have that focus.
But of course, that guidance also takes an assessment of an
organisation, dependencies and impacts on nature as that
starting point. So if.
Transition plans are effectively the bridge between assessment
and action. Can you share more about the
development of transition plans that you've been working on
well? There are two things that have
been happening, one's external and one internal that have
driven this work. External is that we're already
seeing investors asking their investee companies how they're
proposing to manage their dependencies and impacts and
risks opportunities because there'll be seeing those LEAP
assessments or asking for them starting to see reports.
So it's a move to that. So what what are you doing about
it? And regulators and other
stakeholders also asking questions.
So that's driven demand in transition planning beyond just
what TNFD has done. But then TNFD, we had a specific
recommended disclosure strategy B that specifies that an
organisation should disclose any transition plans in place.
So that gave us a hook to say, right.
So in our recommended disclosures, we really should
provide some guidance. So last October at the CUP 16 in
Cali, we published draught guidance.
It's, but it's very detailed and practical.
I mean, it's, it's in the form of a discussion paper, but it's
almost like a full draught on nature transition planning.
It's relevant for both corporates and financial
institutions. And it covers 2 dimensions.
First is, you know, how do you do the planning?
What should that plan include? And then how should you present
and disclose it? So more disclosure focused and
we were really benefited just like in our original work
building from the work of TCFD for the transition planning of
the work we built from the work of G fans and the transition
plan task force. G fans done more of the internal
planning. The TPT as they're known have
done more on the disclosure. So it's quite principles based.
It's focused on how to structure a plan and the changes to the
business that they need to think through.
We went for out for public consultation, we published it in
October and we got some really useful feedback.
And part of that feedback was to make sure it really works in
practise and it's decision useful.
So as TNFD always likes to, we've got moved into some
piloting. We now have 15 mix of 15
corporates and financial institutions that are testing
that guidance. With our team working through
all of the different components. It's really generating very
useful insights, confirming some of the things we had, but
actually fundamentally changing some of the guidance.
And we will publish it in November this year at COP 30 as
final guidance. And I'm, I'm really to the
conclude, I'm really excited by how much interest there is in
this. We ran ATNFD webinar on our
transition planning work and we had 2000 registered.
So yeah, I think there's real excitement and interest to move
to action and this helps get there.
So that's really exciting and encouraging to hear really,
isn't it? And have you seen that
investment or action being taken?
It'd be great to sort of hear if you've got some examples.
Yeah. And it is early days, obviously.
So I say that humbly that we're really pleased that the
foundational assessments are being done.
We're now aware of probably well over 125 TNFD reports.
So as I said, we'll do the status report in September.
We'll see what's Atlas, all of that is foundational, but our
mission is to significantly shift financial flows.
So your question is absolutely the right one to ask, but we
don't know for sure what what's what's happening at the biggest
scale of that. I have some anecdotal examples
which I find encouraging. I can give you somewhere
internal. So I think in particular what's
happening is the LEAP assessment is providing insights that
inform business strategy, which smart companies are doing before
they even get to disclosure, because then when they do the
disclosure, they have a, you know, a good or a better story.
Yeah. So I'll give an example of a
pharmaceutical company that undertook a very detailed strong
LEAP assessment, actually found that it's nature related risks
and opportunities were greater than what they had found for
climate alone and were actually interacting.
So you know, for example, climate change and over
extraction of particular plant species that they relied on was
compromising supply of pharmaceutical products and
supply chains. So that led them to take, you
know, some time to update their strategy to improve that
resilience. And then they were able to tell
not the perfect story, but a good story in their disclosures
about what their targets were and how they were going to
improve every time. And I think that's really
powerful because that then enables the internal decision
making. There's another example of a
producer of health and hygiene products that have important
supply chains for latex and palm oil where they were through,
again, through their Leap assessment, able to identify how
they could diversify their sources and switch to
alternative materials. And I know you said the focus is
on nature based solutions and restoration in this example,
identifying the importance of smallholder farmers in the latex
supply chain, taking a regenerative agriculture
approach. And they're already using
intercropping and you know, growing several props together
to improve solar health and E system services both to the, you
know, to the local communities as well as the companies and all
of this. Then of course, the question is
how is the disclosure of these improvements in business
strategy unlocking the investment?
And we need to keep an eye on that.
We don't yet have a set strong stories, but I think GFI and and
ourselves should be keeping an eagle eye on that because that's
part of the theory of change, right, for why disclosure
matters. But I do feel confident of
growing a number of examples where business strategy, the
resilience of business strategy is visibly improving.
And I think it shows the importance of that assessment as
well as the disclosure. Yeah, you're right.
It's not just disclosure for disclosure's sake, is it?
It's really about how do we get them to start?
Well, I think the whole premise of the TNFT was around unlocking
investment into nature positive outcomes and then decreasing
negative impacts on nature wasn't.
It exactly, exactly. And we're seeing the demand from
financial institutions. So I guess we're seeing the the
demand from corporates, those two examples I gave, but also
the growing demand, especially from large asset owners who are
invested across a range of sectors and geographies and
asset classes and may not be able to diversify away from
these nature related risks. So we're also tracking examples
of public statements from asset owners and managers and
insurers, the likes of Norcos Bank, Investment Management,
BlackRock Legal and General, Aviva, AXA and so on, which
might be in the form of stewardship engagement or voting
policies where they're calling for their embassies to start
disclosing on this, sometimes encouraging stock exchanges to
set recommendations within their disclosure expectations and
listing rules. And then, yeah, you know, saying
we encourage management of this or they'll be dissenting votes
against management or the board. So and, and some of the times
they're general, sometimes they're actually specifically
mentioning TNFD, recognising you need, they want a standardised
set of definitions and information for disclosure,
especially on metrics to be able to compare within and across
sectors. So we're seeing the demand from
investors, we're seeing the demand from corporates.
What we now need to see is the investment flows matching that,
of course, to reward strong performance.
Yeah. And as you say, that will take
some time, won't it? If we look at TCFD, we're not
seeing quite the investment flows that we'd like.
And yet that was set up quite some time ago and TNFD feels
like has leapfrogged some of the challenges TCFD has had, has
moved so quickly, as you say. So you mentioned the LEAP
approach before. And for those who don't know,
that stands for locate, evaluate, assess and prepare.
And that's really the. Framework for the TNFD
disclosures, could you share how that process is helping
investors so the finance sector in particular quantify nature
related risks? The LEAP approach is set up to
help investors identify and quantify risks.
There's a particular part of the LEAP approach on risk assessment
methods, the exciting Annex 4, which has three types of risk
assessment methods, which we call heat mapping, asset tagging
and scenario analysis. And it was really fun developing
that guidance because we did it again, pilot testing with seven
asset owners who used it in practise and gave real time
feedback on it. Heat mapping is now, you know,
many, many financial institutions are using it as a
tool because it helps you look at your potential exposure.
Then there are tools like Encore that help organisations do this
by sector. So that's really widespread now
the heat mapping. But in our sense it's the market
and frustrated. OK, How do I go deeper?
So that's how we get to be second and third methods where
asset tagging you can use data specific to the the assets or
the financial corporate assets to determine that exposure at a
more granular level. So organisations are now seeing
whether the heat is in their map and then drilling into
individual portfolio companies where those impacts and offences
are high might be by geography or a particular sector.
And then finally, there's scenario analysis such as like
the Creme de la Creme of these methods, builds on them but
translates the exposure into actual financial implications.
But that's obviously more demanding and it requires
estimates of economic and financial costs and and
modelling to convert into things like costs and revenues.
And you have to look at that transmission of risk through to
a particular effects through what we call transmission
channels. So we are seeing some
organisations starting to use scenario analysis.
There's also some, I guess desire for credible external
scenarios, especially for financial institutions because
of the precedent set for climate with NGFS.
So NGFS is continuing its work on scenario analysis, but it
will take some years to come to the final product.
Organisations can use our, we have a discussion paper on
advanced analysis for scenarios, which FIS can can use in the
meantime. So they're, you know, wait,
they're already getting going. And that combination basically
also what's, what do we got the risk assessment methods and the
scenario analysis guidance and discussion paper can help.
And I really just to finish, I really love your question about
the cost of inaction. I actually haven't seen anyone
framing it that way yet with the FI or corporate analysis.
There was really interesting analysis we did for the Dasgupta
review, which is more at the social level, which was looking
at scenarios. I think it was Vivid Economics
in the Natural History Museum did this analysis that found
that immediate action on biodiversity loss above what was
currently in place was needed to maintain biodiversity intactness
even at today's levels. And if that action was delayed,
I think it's about even just a decade, the cost required would
double and the scale of the change required might be so
large it would be infeasible to achieve.
So that showed that by, you know, acting now this was social
cost, but the cumulative social cost would be, you know, half
the cost if you if you waited. And so I imagine that, you know,
that same frame in cost of inaction could be a really
interesting frame for scenario analysis by corporates or FIS,
But I haven't, I haven't yet heard of that being done.
Yeah, it's so I just, I was fascinated with multiple
questions of what you just shared.
But one sort of initial reflection is the businesses
that are coming together in these sort of collective action
groups are coming together because they understand that
their businesses are going to be impacted and they'll have done
some analysis on what they think those impacts are going to be.
And therefore it justifies an investment now in Sole health or
you know, reducing water shortage risk in a region or
even improving flood risk reduction.
What we're also hearing is some sort of noises around that
number is quite hard to get to. Like what is the cost to my
business of inaction? And therefore, how can I justify
the cost I'm going to now have of paying farmers or land
managers to make those changes in addition to all the sort of
complications around how can we sort of evidence that those
interventions will deliver on, on what we want in terms of our
own business outcomes? So it's such a a complex piece
that I think really needs to be picked apart sort of in terms of
sort of piloting different scenarios in different regions.
And they'll all be so different. But I think it will be helpful
that we start to sort of really get to that cost base.
And then that's even before they start to think about what's the
cost of capital and the cost of insurance premiums resulting
from that increased risk. And based on the kind of
feedback actually you asked about what will be future
priorities for us for guidance because we've received this
feedback that it is harder to get to the financial effects of
nature risks, but yet essential to do so.
And that scenario analysis and risk assessment is important but
proving tricky. We're planning to update won't
be new guidance, but update our risk assessment guidance.
So again, later this year we'll we'll put up a discussion paper
on that because it's really important and we think maybe
some practical tips and insights that we've seen from those
putting it into practise could be helpful for others.
That would be great. So coming back to some of the
things you said earlier, you talked about the heat mapping.
So it sounds like things have moved along and this this old
phrase that used to get rolled out a lot, which was, oh, you
know, the data's the problem. Seems like maybe that's not
quite so much the case today. I don't know what.
What? What do you think?
The data's not a prohibitive problem but details still a
challenge to get my messaging right because there is data that
is accessible and decision useful for sure.
And we can, we can see from the number of TNFD reports coming
out already, some organisations have already done 2 TNFD reports
and multiple LEAP assessments. It's funny, I was in a training,
our first training programme we did and somebody said, oh, this
LEAP approach seems too tricky. And it was wonderful.
Somebody who's being trained said, but I've already done 4
LEAP assessments. It's not that tricky.
It's just you know, this idea of it being it.
So as my first message is definitely doing feel paralysed
if you haven't got it started. There's plenty of relevant data
out there and and analytics tools, but there is a but as the
demand for this data is growing and the maturity of this with
increasing interest from the standard setters and from
regulators. This means that and the the
requirements of audit and assurance around reporting,
verifying targets and so on, the need for timely, comprehensive
decision, useful, credible, accessible data is growing and
there is a mismatch especially on data on the state of nature.
So the health of nature, ecosystems and species we see as
a particular first blocker, which is why TNFD now has a
small set of data initiatives to try to help working with many,
many partners to improve that. So we've been working on data
since the very beginning, but right now this year we're doing
pilot testing with market participants both that upstream,
what we call upstream in the data value chain, upstream data
providers that might be Earth observation data, makes sensing
or ground truth data like environmental DNA all the way
through to those organisations that are using that data.
They might be again downstream in the data value chain.
These are analytics tool developers or the final users
like the financial institutions and corporates using the data.
And so we're putting a mock up of a data facility together kind
of a sandbox to see how it would work, putting real data from
that up to those upstream groups into it and then testing how how
does it work, how can we improve it with the set of data
principles to make it credible, transparency around that
trustworthiness of the data and all of that.
We hope again by November to produce a blueprint for this
Open Access data facility as well as a set of important
changes that might be needed around not just a facility, but
improvements for example, in funding upstream data.
So it it will likely also provide an investment case which
probably would be most appropriate for governments and
and philanthropy to support this going forwards.
So yeah, don't be held back by data, but we are working
actively to improve it. Right.
Well, and also, I suppose that sort of begs the question, I
mean, to what extent should governments be or what extent
are they very aware of this need for data and therefore
supporting the provision of data?
Presumably, one would hope they are capturing at least sort of
the state of nature across their own regions and nations.
Yeah, there's been real interest in our data work from
governments, a few in particular to track the work but also to
fund this work. So I think governments recognise
this and they also feel that they can play a role to improve
this. But increasingly, of course, the
private sector is also collecting data.
So I think this ability to share data both from the public sector
through their work for ecosystem accounting and local field data
and so on, which is, you know, often really useful for
companies. But then the companies
themselves might be collecting, for example, environmental DNA
data on their own sites for a mining company.
We know of some that are spending 10s of millions on
that, where they may also be willing to share that which the
public sector governments may benefit from that to understand
how things are tracking towards the goals and targets in the
global biodiversity framework. So I think there's lots of
connection between public and private sector on data.
And obviously there's like the data collection of like what is
the level of health in the landscape in which you're
operating, for example. And then there's like a level of
data around that tracks with OK if you're going to make certain
interventions on those landscapes.
And are you seeing that granularity of detail at a local
level that can show how actions can result in positive change?
One of the things I was really excited about on my recent trip
to Japan where I met with the government representatives,
there wasn't so much on the question you just asked, but it
was clear that they are taking steps to me from the global
goals and targets under the Global Biodiversity Framework
down to the national level, be the National Biodiversity
Strategy and Action Plan. The NV Subs, but then defining
it at the local level by prefecture and so there they
have a process. Why by individual prefectures
are saying, right, this is what we want to achieve locally in
terms of the health of nature, the state of nature.
And that then provides the clarity that business needs and
their investors need to say this is what we can contribute.
And it might be say a particular region where they have
dependencies or water or different E system services.
And so they would then like to contribute to specific targets
credibly set by governments. I was very encouraged that
that's starting to happen there because again, if there's going
to be that investment, there needs to be that clarity on
where to achieve what, not just from the business perspective,
but for society more broadly. Well, that's super interesting
because that's exactly the kind of level that we may then see
businesses start to act. So I know I've talked about this
before, but in England specifically, we've been looking
into a regional but really local level potential for a Co
investment. So looking at where nature
degradation and climate change is, is impacting businesses and
then is that where we can attract that investment from
those businesses because of resilience purposes.
But the question is so sort of how can we embed that into
national government targets and. Just to come in, I think it's
really complemented because that's the sort of location
specific level where we need clarity on what the targets are
cascading down from global to national to local.
But then there's been this inspiration again from climate
on sector transition pathways. That's where you might, you
might have the local scale definition, but then what does
that mean for a particular sector?
So yeah, taking inspiration for how decarbonisation sector
transition pathways supported climate transition planning, we
also see that being needed for nature now to enable investors
and others who are using transition plans to assess their
credibility. It's not something TNFD is
doing, but we're calling for action on because we think that
could provide this useful reference to mobilise the flows
of capital isn't even rightly saying it's very important.
We know there's some early work by by WWF, business Nature,
WBCSDEUF and so on. And, and I believe maybe GFI is
doing some further work on this with partners.
So we think that's really important part of the work that
needs to be done to get from where we've got with TNFD
beginning to have reporting, really useful in assessments,
providing insight and then the transition plans coming out.
We need clarity for investors to show right what does good, bad
and the transition from bad to good look like by by sectors.
Yeah. And just to pick up on that, So
yes, we are doing some work with WWF specifically in the UK on
what what's been called nature positive pathways.
But yes, they are nature sectoral transition pathways
essentially. And and that comes back to that
point on the locality. You can do them by sector, but
then, you know, if you're a sector working in just using the
UK as an example in the North where you know, maybe less
impacted by water shortages, although actually in the Humber
they are being impacted by water shortages.
Then maybe down in East Anglia where there's high drought.
It's a different kind of action that needs to be taken.
So it is, it's very nuanced. It'll be interesting to see how
that piece of work plays out with my, my colleagues in WWF in
the UK at least. And, and, and from what I said
from WWF, it's something that's been talked about in multiple
jurisdictions, these sectoral pathways.
It's great. Well, I think or hope that if
government is involved in that Co design of those transition
pathways that we, you know, we just mentioned, then it can also
help inform them or inform government on where the policy
levers or fiscal levers are going to be needed to ensure
that any pathways are, are just not, not just like on paper only
because we spend a lot of time here talking about how we can
really ensure there are concrete drivers and sometimes that needs
to be through that regulatory side and that's needed to move
business. Do you have any thoughts on
that? I know it's a bit of a leading
question to talk about regulation, but we'll be keen to
hear. Of course, yes.
But with my TNFD hat, we're a voluntary framework.
We're not a standard setter, We're not the regulator and we
can't advocate for that. But of course, seeing the
pathway of TCFD and it's being folded into the ISSBST climate
disclosure standard globally and being required and mandatory in
several jurisdictions, we know that that is an important
scaling strategy. It's just that that's not our
role. Our role is to build the market,
practise the market experience, which should encourage standard
setters and regulators. Now the maturity is there, I
think for them to start to consider this.
And yeah, there's a quite a few interesting examples that are
starting to blossom. So the team is telling me that
in Chile, they've issued a pilot on a business action plan on
biodiversity that includes recommendations to implement
TNFD. In Malaysia, their central Bank
and Bank Nagara Malaysia is developing guidance right now
for the financial sector on assessing emerging nature
related risks, which is aligned to the TNFD to help banks and
other FIS understand this. And Japan, as always is ahead.
They've got an H positive economy transition strategy and
their government is been actively encouraging companies
to adopt TNFD for some time and including a training programme.
And then there are some interesting examples.
In Africa, Botswana and Rwanda have issued disclosure guidance
for their stock exchanges explicitly referred to TNFD.
And then finally, in India, we're actually now working with
the Confederation of Indian Industries on a document that
shows how they're reporting standards in India.
They're called Business Responsibility and
Sustainability reporting. BRSR mandated by the Security
and Exchange Board of India, and it's mandatory for the top 1000
listed companies. It shows how BRSR already covers
nature to some extent, but then the TNFT LEAP approach and the
alignment with the recommendations can complement
that. So actually you've got almost
every continent taking really interesting action.
And of course, you know, obviously we almost always talk
about Europe in this case, but the European sustainability
proportioning standards were being developed at the same time
as the TNFD framework and we work closely with them, which is
why there's that high level of alignment between all of the 14
recommended disclosures in TNFD and what's now mandatory under
CSID. Of course, you know, of the
simplification still to, to be worked through in the coming
months. So I think, you know, this is
all happening in real time already.
It it's not, it's not the same sequencing as happened with
climate. A lot of it is blossoming very
quickly. And do you sort of see what's
driving certain countries to lead?
You know, Japan is the one we always talk about more adopters.
You know, I think it's, I think the UK is a second and Japan has
sort of double or even triple the number of adopters that we
have. Like what do you think is
driving these individual countries?
Is it just good leadership if I can say that?
Well, I, I mean, I say this humbly because I don't, it's a
hard question to answer, but I have just come back from this
really inspiring trip to Japan where I observed a number of
things that I think may have played into the strong uptake
there. The desire for leadership both
from the public and private sector, the role of government
in supporting, for example, through capacity building of the
private sector on the LEAP approach and TNFD reporting.
I think there's also an amazing cultural connection to nature
and a deep understanding of the benefits of managing nature loss
and improving nature. I mean, they're really
interested in the conservation and restoration side in
particular. And then the experience of of
climate where you know, people have learnt from TCFD and that
may or may not have sown the seed for them to want to take a
leadership role. I think in Japan it has so
different things in different jurisdictions, but it's not just
Japan. I'm particularly excited about
Asia as a continent and the interest in nature in other
areas. And it's growing very strongly
in Japan, in Korea, across Southeast Asia and in India.
So yeah, watch that space, I'd say for for Asia's leadership on
this topic. Which is extremely positive and.
Should we talk about the US at all?
Yeah. I mean, in the US, we are still
slow, as you might expect for adoption of the TNF DS
disclosure recommendations because disclosure itself is
tricky. I think we're at about 22
adopters in the USI think I felt that right.
But I can also see who is downloading our guidance by
country and jurisdiction. And in the US, downloads for
example, of our elite guidance and accompanying guidance on
different topics remains high in the conversations we're having
in the US suggest that many organisations are doing leave
assessments, they're using our guidance, they're doing their
internal due diligence because they recognise they've got risks
and opportunities they want to manage and seize.
It's just the disclosure that has become tricky for them and
that has been tricky for some time, even pre the election.
So that's where I think we're at.
Well, that's really positive. To hear that things are moving
in the US for sure, but as we start to wrap up here, it would
be great to hear about current and future initiatives of the
TNFD. So while I have you, this is a
bit of a, a different discussion, I suppose, but I
just wondered if you could share about the work of Nature
positive Initiative and what you're doing there because you
know, it's a term that's still being defined.
I know, but we are using a lot and it will sort of help
potentially with that move towards unlocking investment.
The Nature Positive Initiative is a organisation that has it's,
it has 27 member organisations that includes major conservation
NGOs, science bodies and some of the business bodies like
ourselves. So TNFD is a member of the
Nature Positive Initiative and the Nature Positive Initiative
is doing 2 really important things.
The first was to provide a credible definition of what
Nature Positive actually means because it was being bandied
about, used in association with a product ahead of nature
positive burgers and nature Positive wheat.
And this gives me the heebie jeebies.
So actually giving us a definition of what does nature
positive mean. It's an outcome aligned with the
Global Biodiversity Frameworks vision, so halting and reversing
nature loss by 20-30, achieving against a 2020 baseline and
achieving full recovery by 2050. So that's really helped us to
have an agreed credible definition in writing.
But then they've also now moving into, OK, we've got that
definition, how we're going to measure it And going back to our
guidance metrics and recommendations, back in
September 2023, we used this term placeholder for our state
of nature metrics. And we used placeholder because
we wanted to encourage state of nature measurement, but we also
had to acknowledge that there wasn't consensus in the
scientific community or indeed amongst the private sector on
what those metrics should be. There is at the indicator level,
but not the level of specific metrics.
So what the Nature Positive initiative is doing this year
and we're working with them is pilot testing.
So we have draught metrics on ecosystem extent and condition,
species abundance, species extinction risk, things like
this at the indicator level and then having much more specific
metrics. And they're being pilot tested
with over 30 organisations. TNFD is leading the support to
14 of those so that by the end of this year, she have really
useful feedback on how practical are that they, how useful are
they science communities also looking at how robust they are.
So that will help us early next year learn from all of that.
And maybe you'll be able to do an update that takes that
wordplace help holder out. We could update our assessment
guidance and indeed our our metrics lists on the basis of of
that learning. And I think the reason that's
really important coming back to the topic of your the podcast
here is because this moves to outcomes.
And our focus has been on drivers of impact, drivers of
change, which are still very useful leading indicators.
But ultimately, we also need to have some way of measuring
outcomes. And so this helps us take a step
towards that. Yeah, yeah, totally see that.
So just finally, you know, it'd be great to hear before you go,
you know, what do you see as the biggest barriers at the moment
to investment into nature? On, on.
On the flip side, what's keeping you optimistic?
I think perception is a big barrier.
So continuing to see this as a niche topic and a new topic and
that the projects are small and that it only relates to certain
number of sectors, that gives me hope because I think that it
should be an easy thing to fix if perception is the problem.
Nature, you know, nature investment is not niche, it's
hugely scalable. And I think some of the recent
work of Bloomberg or nature related opportunities for
reducing harm shows that we have large scale investments that can
produce a return now across a huge number of sectors.
So I think that's one of the main challenges and one of the
things we hate with the publication we're going to do is
to help to to clarify that this is both about reducing harm as
well as restoration, conservation and regeneration.
So yeah, that's where I've got to in my thinking so far.
More to come. Yeah, no, love it And I couldn't
agree more. It does seem like nature was
sort of pitched as a bit sort of side and niche and actually
like, well, no, it's, it's huge actually.
And lots of stuff is happening everyday that's around investing
in nature and reducing impacts. On the other side, just to
finish our breaking thought is I do think as we do scale this, it
will potentially be disruptive going back to what we're talking
about transition. So nature when perceived as
niche is not seen as a threat. But once there's a recognition
that this is a sizeable transition, you know, is is
taking place now there will be disruption to this that's
unestablished sexism, sub sectors that are harmful.
And so that's when I think we'll get really interesting in how we
all handle as we have had to for climate handling that for a just
transition. Right.
And all the political. The challenges, it's absolutely
brilliant. Well, and as you leave us, tell
us anything you've you've gone through quite a lot that you're
doing and that's upcoming, but anything else that you wanted to
mention around sort of what to look out for next from TNFD over
the coming months? Big things that are coming from
us will be our status report in September, which will show
adoption of the TNF DS recommendations and our guidance
for the first time, you know, across different sectors and
geographies to look out for that in September at New York Climate
Week. We'll be publishing a set of
case studies of nature related opportunities and a discussion
paper on how we should improve our risk assessment guidance and
then our final transition planning guidance as well as
this road map for a data facility.
So those are the four or five big pieces coming out that I've
mentioned this year. Early next year, if I can go
into January, we're doing 2 further sector guidance
documents for the technology sector.
So that will cover semiconductors, data centres,
all sorts of hot topics. Oh yeah, brilliant alternative
fuels. So that will cover biofuels and
hydrogen and more. So two really interesting
sectors and we'll put out that draught guidance in January next
year. Ah.
In time for the best conference meeting for.
And Dallas 2 very different, yes.
Great. Well, it sounds like you are not
going to have a quiet summer, so I'm sorry for that.
Emily, got a lot on. But thank you so much for taking
time out today to join us. And yeah, really looking forward
to, you know, keeping abreast of all the work that you're doing
and then having you back for a Season 3.
Thanks Helen, I look forward to it.
It's a pleasure, as always. So that's it for this week.
You can find out more about the TNFD at TNFD dot global.
I mentioned also in this episode that we did do an episode with
Emily a couple of years ago now that can give you a bit of a
primer on the TNFD at the very beginnings of it was being set
up. Next week, however, we're going
to be looking at biodiversity net gain.
That's England's compliance market, where I'm going to be
joined by Thomas Pickford from The Nature Conservancy and Glenn
Anderson, who leads the Wendling Beck project in East Anglia in
England that brings together 4 land managers and farmers that
are selling B&G units. So we're actually going to
really get to hear from someone like on the ground bringing that
project to life. And we'll be getting quite
technical and in the weeds as well on some of the the
challenges and issues around sort of rolling out about B&G.
We'll also be touching on the European Commission's road map
for nature markets that launched just this month.
So I hope you'll join us. But until then, I hope you have
a wonderful week.