News from the front desk: The new Taskforce on Nature-related Financial Disclosure will be asking specific questions when it comes into force in September. For instance: how many hectares of land have you cleared, how many litres of wastewater have you discharged? How many pollutants, or chemicals and plastics have you used that will inevitably make their way to land, rivers and ocean? Something else: The framework is market led – designed by industry, science based and government backed. And moving at a rapid clip.
Carolin Leeshaa was in an excellent mood on Thursday morning.
KPMG’s director, natural capital and biodiversity national lead had tapped a slew of good news on the nature-positive movement and a lot of it was moving along much faster than many people expected (and some, probably, had wanted).
Carolin Leeshhaa will speak at The Fifth Estate’s Urban Greening 2023 event which will cover the nature positive movement the fast approaching Taskforce on Nature-Related Financial Disclosure (TNFD) at Urban Greening, 27 April, UTS, Sydney
On Wednesday The Taskforce on Nature-related Financial Disclosures (TNFD) had released its fourth and final beta framework for nature-related risk management and disclosure.
This framework is around risk management and disclosure and not a standard, the TFND noted, and taking its lead from the Taskforce on Climate-related Financial Disclosure and therefore is “anchored by the same four pillars of the TCFD approach” of governance, strategy, risk management and metrics and targets. The objective is to give participants a high level of alignment with the TCFD in order to enable organisations to integrate both climate and nature..
It adapts the notion of the scopes 1, 2 and 3 emissions in climate reporting and applies them to nature, in the same way: direct, operations, upstream, downstream and financed.
Leesshaa said the best news was that the framework is market backed,-through support from more than 1000 organisations.
And the speed of agreement is inspiring.
While TCFD had taken 10, perhaps 15 years to get rolling the Taskforce on Nature-related Financial Disclosure (TNFD) had taken just 10-15 months, Leeshaa noted.
“This is so pleasing, to see not just the governments come together but also the private sector. It’s literally – ‘the penny has dropped’,” she told The Fifth Estate.
“There is no stopping the momentum now. My sense is that business will continue to move with agility.”
Thing is, she said, many of these big corporations don’t need to be told they rely on nature; they know already. The TNFD framework was “setting the North Star for government and business and science to come to together… to disclosure their impact and dependency on nature.” It meant that sustainability-related disclosures are now expanding beyond climate into nature.
For the built environment there will be big implications
Leeshaa estimates around 80 to 90 per cent of the value chain in property relies on nature.
“That’s where the needle needs to move.”
An agreement on what measurement looks like for the built environment is expected in six months.
The Nature Repair Bill
On Wednesday there was another piece of good news: Tanya Plibersek’s introduction in the Australian parliament of the world first Nature Repair Market Bill, which forms part of federal government’s Nature Positive Plan “to protect more of what’s precious, repair more what’s damaged and manage nature better for the future generation”.
Water, the next big issue for property
And on the same day news broke that embodied water was the next measurement that developers, builders, investors and designers would need to account for.
Slattery, the quantity surveyors that had made a name for itself as a leader in embodied carbon (keep an eye out for our Extreme Green Buildings Ebook out next Tuesday evening) had gone public with a report with the challenge in an article in The Australian Financial Review.
But if the industry thought accounting for embodied carbon was a tough, convoluted task, they’d better strap in for an even bumpier ride.
Some of the social chat on Wednesday revealed some people were not impressed. Embodied carbon was enough of a challenge; who needed more?
But the reality is that the challenges will only grow as we start to realise just how big an impact we’ve made on the planet.
The story on global water is dire.
UN secretary general António Guterres, said this week” “We are draining humanity’s lifeblood through vampiric overconsumption and unsustainable use, and evaporating it through global heating.”
The good news is that Guterres was speaking before 8000 delegates had converged in New York this week for the UN’s three-day conference on global water to start to tackle this most critical of challenges.
Because they’re sobering in the extreme.
By 2030 only 37 per cent of people in sub-Saharan Africa will have safely-managed water, but even the richest countries won’t have clear access [do you mean clean enough to drink?], The Guardian said, reporting from the conference.
Adding that where water fails so does food, giving way to rising security issues.
Right now, the World Food Programme’s east Africa region estimates 82 million people face acute hunger and famine from drought. Bradley Moggridge, Kamilaroi-Associate Professor in Indigenous Water Science at University of Canberra told his social followers pre-conference the event focused on Indigenous thinking on this issue that had been “powerful and sobering.”
A big problem was privatising water supply.
The World Meteorological Organisation made its position clear when it “blasted the speaker from Diageo, the global drinks company that sells Johnny Walker whiskey and Guinness…because its 200 global sites operate in water-stressed places.
“You pump so much groundwater out of the ground to put things into plastic bottles, there is not enough for agriculture,” said Detlef Stammer from the WMO .
In Australia, the driest continent on the planet, can we really afford to allow bottling companies such as Hoffman Drilling to “mine” pristine water from our most precious landscapes such as near a World Heritage-listed rainforest on the Gold Coast?
As the outrage for bad environmental behaviour grows big organisations (maybe even that giant bottling company Coca-Cola) will reassess how they maintain their social licences to operate.
But along with the challenges come opportunities
Leeshaa said there are already many opportunities in evidence and more emerging.
In textiles and fashion alone “there are so many eco start up innovations in bio plastics and designing out micro plastics from fibres which would end up in landfill and waterways and eventually enter our food”.
The World Economic Forum estimates the transition to net zero and nature positive economies is worth 400 million new green jobs and $10 trillion in value by 2030, she notes.
But why the speed and why now?
What the TNFD is working to design is a risk management disclosure framework.
In this week’s announcement of the fourth draft the TNFD has released “a proposed approach to assessment metrics in a tiered approach, seeking to strike the right balance between being science-based and yet practical for market participants to use as part of the annual reporting cycle and on a limited assurance basis,” the TNFD says.
“The architecture reflects the negative and positive – both risk and opportunity,” Leeshaa said.
: “With climate we have universal metric in a tonne of greenhouse gas emissions avoided but for nature it’s more complex, because it’s everything and location specific – the ocean, the inland waterways the land and the atmosphere.
“We’re not separate from nature’ we’re part of it.”
There are broad metrics and sector specific metrics for areas such as financial institutions and food and agriculture, energy and mining.
They will require the disclosure of specific data such as how many hectares of land has been cleared, how many litres of water used, quantities of pollutants discharged or chemicals and plastics released to nature.
Proposals for the built environment sector are expected within six months. And these will be interesting given 80-90 per cent of its supply chain is estimated to rely on nature.
The framework has had an “overwhelmingly positive” responses to date, Leeshaa said.
Mainly because it’s market led. “It’s actually designed by industry and science backed.”
The Australian government has been one of the top two leaders in the moves, through the Department of Climate Change, Energy Efficiency and Water, she added – second only to the UK’s Department of Environment, Food and Rural Affairs.
Also engaged in developing the TNFD frameworks are the Council of Financial Regulators, the Australian Prudential Regulation Authority, the Reserve Bank and Treasury – all as part of the Network of Greening the Financial System.
And of the threats to all the sectors it’s the finance sector that is considered most at risk from failing nature because it’s an essential fuel for economies.
Failing nature is systemic risk, Leeshaa noted. Which is why the ultimate objective of the TNFD is to redirect the global flow of finance away from nature negative towards nature positive activities.
So far, the TNFD is a voluntary framework with the final release in September. And if the TCFD trajectory is anything to go by, it will have just as big an impact.
If not bigger.