Before 2020, the zoologist Andrew Mitchell had a hard time getting finance policymakers to listen to the case for nature. And then the pandemic happened.
Now, three years later, in his closing remarks at the launch of the new framework of the Taskforce on Nature-Related Financial Disclosures (TNFD), Mitchell gave those working in the business and finance sectors a stark warning. Ignore the ubiquity of nature at your own risk.
“If you think that stuff is small, or slow, or only affects agriculture, you’re so wrong,” said Mitchell – who is also the founder of the Oxford-based think tank, Global Canopy – at the event last week.
“Look what Covid-19 has done to our world. That was a tiny speck of nature-related risk that nobody saw coming.
“Don’t get left behind, it will overwhelm you.”
After it was initially unveiled at the New York Stock Exchange on 18 September during climate week, TNFD’s new framework was launched in London on 25 September to a packed room of business leaders, politicians, and policy wonks in the grand halls of the Royal Society.
It includes 14 voluntary recommendations for how financial institutions and businesses can report and act on their nature-related dependencies, impacts, risks, and opportunities. These include: ensuring management have a role in assessing and managing nature-related risk, and encouraging organisations to set up proper metrics for measuring their dependencies and impact on nature.
The Environment Secretary Thérèse Coffey was there to usher in a new era for nature recovery. Earnestly praising the work of the TNFD, she revealed that having read its recommendations, “for the first time it felt like nature was Barbie and climate was just Ken”. While obviously in gest, Coffey’s comparison of the twin pillars of the environmental crisis with Mattel’s plastic heroes is an astute one.
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The Taskforce on Climate-Related Financial Disclosures launched its framework in summer 2017, over six years before its nature-related successor. And as Mitchell alluded, getting nature on to the international policy agenda has been an uphill battle.
Why has nature been left behind for so long? In his closing remarks, Mitchell said that a key reason is metrics. “Unlike climate, we don’t have 1.5 degrees for nature… that’s a problem, isn’t it?”
But as Dr Nina Seega, director of the Centre for Sustainable Finance at the University of Cambridge and a research partner for the framework, observed in an interview with Spotlight, “if you start improving nature, it will start improving climate”.
She explained that the biggest aim of the framework is to “bring people around the idea that nature is a strategic management issue which both corporates and financiers need to start analysing, measuring, and understanding”.
Dr Seega gave the example of a firm working in the agricultural sector, and how considering nature loss as a risk and investing in its mitigation might improve a company’s financial prospects.
“A lot of land is currently degraded,” she said. “If you have a farm that is farming degraded soil, and it starts to think about how to introduce restorative practices to bring up soil health, then you will see an improvement in the nature around it.
“But you will also see an improvement in the financial metrics, and in its profitability as well.”
While the twin frameworks – for the twin crises facing our climate and ecosystems – are currently separate, Dr Seega said they don’t necessarily need to remain that way.
“I think that almost the entirety of TNFD has been built on this thinking that climate and nature should be addressed together,” she explained. “It is imperative that it is a single process.” She said she could see the two frameworks being subsumed by one another in future to become one as their influence grows.
But Mitchell’s pre-pandemic warnings can also be interpreted in a different, more economic way. Internationally, an increasing number of businesses and financial institutions are waking up to nature’s importance. As the group chief executive of Barclays, CS Venkatakrishnan pointed out, their relationship with nature is “symbiotic”.
Those who don’t manage their natural risks now are unlikely to see the reward. They will simply be left behind.