Session 2: How can disclosure of nature-related financial risks open the door to sustainable financing?
Tuesday, 21 July 2020 | 9:00am - 11:00am EST
Over the last decade, the creation of initiatives, like TCFD, have driven a surge in assessment and reporting of company, investor, and financiers’ carbon footprints and climate-related financial risks. However, climate change is just one pillar of environmental market failure. The world’s natural capital is also in sharp decline, and without rapid and systemic change, biodiversity loss and landscape degradation will severely disrupt the world economy. A “TCFD for nature” could accelerate understanding dramatically. Financial institutions therefore need to look “beyond carbon.” To avoid risk and find new opportunity, they will need to examine both financial dependency and impacts, transition risks and physical risks, not just on climate, but on nature’s assets and the services that are provided to the business sectors they invest in or lend to. The session will announce the Informal Working Group which will develop a roadmap for delivering a “TCFD for nature” in 2021. It will increase recognition within the financial sector of new nature-positive investment and lending opportunities, as they emerge. This will be an important step towards achieving an important cluster of the Sustainable Development Goals (SDGs) that are likely to become a future lens, through which the financial sector’s success will be measured. This session will focus on the assessment and disclosure of risks related to climate change, highlight the need for a “TCFD for nature” and discuss how a nature-related disclosure framework could help investors and financiers to:
- Better understand the underlying impacts, risks, and opportunities in the companies and activities they are investing in
- Give real value to the role of nature in business activity
- Create financial products that drive resources to the protection of nature.
Starting with a review of the current state of play, panelists will discuss how nature-related disclosure can be a part of mainstream corporate reporting and what more is needed to ensure capital allocation is properly aligned with social costs and benefits, thereby leading to reduced negative impacts on natural ecosystems and biodiversity and greater positive investment in nature.
Session 2 - Video recording