Pensions schemes who adhere to the Taskforce on Nature-related Financial Disclosures (TNFD) framework will have to significantly increase their disclosure reporting under proposed new rules.

The third iteration of the TNFD beta framework, released today (4 November), contains "significant updates and enhancements", including an expansion of draft disclosure recommendations "to incorporate dependencies and impacts on nature alongside risks and opportunities to [an] organisation".

This expansion includes demanding that pension schemes report back on the negative environmental impact of their supply chains, stakeholders and how its own climate and nature targets align with that of the TNFD.

As part of the update, the TNFD also issued two discussion papers: one on scenarios, and one on "societal considerations relevant to nature-related risk management and disclosure".

It said that it hopes that these will help it further refine the framework when its final draft version is released in March 2023.

Co-chair of the TNFD, David Craig, said that together with the previously released draft disclosures on risks and opportunities, the third version of the beta framework now provides a full spectrum of recommended disclosures "across dependencies, impacts, risks and opportunities to support the reporting preferences and compliance requirements of report preparers everywhere".

"Our objective is to provide the TNFD framework as a powerful tool that helps move business and finance to take action on nature-related dependencies, impacts, risks and opportunities, sooner rather than later," he continued.

"This framework will encourage increasing disclosure ambition over time, essential to aligning financial flows and business activities to the task of urgently halting and reversing nature loss; and ensuring that both business and finance become more resilient in the face of the increasing frequency and magnitude of nature-related risks that are clearly apparent today”.

Blackrock’s TNFD member and lead of its scenarios working group, Jessica McDougall, also explained that the taskforce's latest draft proposals are designed to build on an understanding of critical climate and nature-related uncertainties, while encouraging organisations to think through material risks and opportunities that sit in their capital accounts and investment portfolios.

"This framing is intentionally flexible and allows for an iterative approach, as additional guidance on nature-related scenarios is developed across the marketplace," she stated.

Since the TNFD second version release in June, the number of institutions adhering to the framework has grown to over 700 institutions from across five continents.

Over 130 organisations have started or announced plans to pilot test the beta framework and over 100 data providers are now participating in the TNFD’s Data Catalyst initiative.

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