TNFD and the post-2020 global biodiversity framework

Dominique Barker: Welcome to the Sustainability Agenda, a podcast series focusing on the evolving complexities of the sustainability landscape, with a view on addressing current issues in a concise format to help you navigate and take action. I’m your host, Dominique Barker. Please join me as we explore today’s most pressing matters with special guests that will give you some new perspective and help you make sense of what really matters.

Camille Maclet: But this relies upon a simple vision statement, which is for the world to live in harmony with nature by 2050. This vision statement is underpinned or further developed by a number of goals that are 2050 goals.

Dominique Barker: Hello and welcome to the second episode of our Natural Capital series leading up to COP15. For the benefit of our listeners, COP15 focuses on the sustainable management of biodiversity, whereas COP27, which just ended this past November, really centred on climate. Today we welcome Camille Maclet, who is actually based in Mexico City. He’s a financial sector Engagement Specialist with the Secretariat of the Convention on Biological Diversity. And before that he collaborated on the TNF D, which we’ll talk about, and that’s the Task Force on Nature-Related Financial Disclosures. On today’s episode, we’re going to be discussing two main topics. Number one, the TNFD, which I refer to. And second, the upcoming post 2020 Global Biodiversity Framework, which is a new global framework for managing nature through 2030. Both are relevant to policymakers, businesses, financial institutions and advocacy groups alike. Good afternoon, Camille, and welcome to today’s episode of The Sustainability Agenda.

Camille Maclet: Thank you, Dominique, It’s a pleasure to be with you.

Dominique Barker: There’s been a lot of development around disclosures. We’ve recently seen a focus on climate related disclosures, and that would be what we call TCFD or Taskforce on Climate-Related Financial Disclosures. And now we’re beginning to see a demand for disclosures around nature, such as the TNFD, which I referred to, the Taskforce on Nature-Related Financial Disclosure. So set the stage for us: what is TNFD and what is it trying to accomplish?

Camille Maclet: Okay. Before starting on that, I will say that for purely governance reasons, I have to clarify that I will be speaking on my own behalf here.

Dominique Barker: Sure. Understood.

Camille Maclet: And I can’t be speaking on behalf of the Secretariat of the CBD or the TNFD. That said, as you mentioned, I did work with the TNFD before joining the Secretariat, and I am still supporting our co-chair, our Executive Secretary, Elizabeth Maruma, who is also the co-chair of the Taskforce on Nature-Related Financial Disclosures. And therefore there is a strong linkage between the work of our Executive Secretary, which I support and the taskforce. Now, coming back to your question on what does the TNFD try to achieve, I would really refer to the public mission statement of the TNFD, which is to develop a framework to assess, manage and report on nature related risks and opportunities for corporates and financial institutions with the ultimate goal of providing clarity on the exposure of organizations to risk related to nature, and in doing so, supporting a shift from the market towards improving the consideration of biodiversity and nature and reducing impacts, reducing risks and impacts and generating outcomes that are positive for nature.

Dominique Barker: Okay, great. And today the TNFD is voluntary. Do you anticipate any engagement with any future mandatory frameworks? And I guess what I’m talking about is, for example, the ISSB or the International Sustainability Standards Board. Do you ever see that and do you ever see a tie in with TCFD?

Camille Maclet: So the TNFD, that’s the core, is a voluntary market led initiative. This is very important to bear in mind, and the taskforce in itself, in fact, is composed of a number of senior representatives from market organizations, from corporate businesses to financial institutions and service providers. The TNFD is supported by multilateral organizations and governments. And it was founded by a group of founders that include public organizations and civil society organizations. But it is a market led voluntary initiative. The TNFD therefore does not aim at creating policy or imposing any form of monetary framework. That said, there is momentum building elsewhere within the biodiversity space, which tends to lead towards mandatory disclosures. And you rightly mentioned the ISSB, which is currently working in priority on climate related reporting. But we may expect ISSB to then also work on biodiversity. I think it’s for ISSB to announce. I will refer to COP15, to the COP15 process where in the draft agreement and the negotiation, there is a specific part of the text which calls for mandatory disclosures, and we call this target 15 of the draft 2020 Global Biodiversity Framework. This is a target that in the draft text is to be achieved by 2030. And this essentially calls for the parties to the convention to establish requirements for large businesses and financial institutions to report on nature related impacts and dependencies. To quote the exact text, but with a view to reducing risks and impacts. So if we look at the Global Biodiversity Framework on the COP15 process, I think the simple answer is yes, there is momentum building towards mandatory disclosures. The relationship with energy, I think is still somewhat remote, but I would say that the TNFD is the most advanced and probably the most visible ongoing initiative to provide methodological guidance and a practical framework for assessing and reporting upon nature related risks and impacts.

Dominique Barker: Just to clarify, is TNFD not the only framework on nature related financial disclosure? Are there others? I didn’t know that.

Camille Maclet: There are initiatives that vary in scope and level of advancement, which in general work towards improving the level of assessment and reporting upon exposure to impacts and risks from business organizations. Besides the energy, we could, quote, PDAF, the Partnership on Biodiversity Accounting Financials, which is more oriented towards natural capital accounting. We could quote the EU Africa Initiative on accounting for nature related risks and impacts, and also the UN system under Economics accounting, which is also aiming to provide some natural capital accounting.

Dominique Barker: Let’s go to the second main topic for this podcast, which is the Secretariat of the UN Convention on Biological Diversity, which released its first draft of the post 2020 biodiversity framework last year with the intention of presenting it at COP15. I think you did refer to it just a few moments ago. Can you describe that framework and maybe say what you think will come of it?

Camille Maclet: Yes. So perhaps to track back a little bit and to provide clarity, I would say that the COP15 process started over two years ago but was delayed due to the global pandemic. The intent was to hold COP15 in Kunming in China, with China being the presidency country for this COP. Already two years ago. A first part of COP15 was actually held virtually in October 2021, and this led to the adoption of a draft framework and what we call the Kunming declaration, which is a collective declaration from the parties to work together towards achieving a final framework with a strong and ambitious vision. In the meantime, since October 2021, there were two further episodes of what we call open and working group negotiations. These are negotiation events where the parties to the convention discussed and negotiated upon the text of the draft framework, and we are now reaching the second part of COP15, which will be the ultimate moment for negotiation and agreement upon this text. All this to say that we are now working on what is probably the fifth iteration of the draft global biodiversity framework or the fourth, I may be mistaken here. And the text has already made significant progress.

Dominique Barker: So you described it and it sounds like there is some progress. But what do you think the actual impact of this post 2020 biodiversity framework will be on the private sector? For many of our audience will be the private sector, including myself, at a financial institution, CIBC. What is the actual impact of that?

Camille Maclet: The text of the Draft Global Literacy Framework. It’s a complex and dense text which I don’t think we should go into detail on this occasion. But this relies upon a simple vision statement, which is for the world to live in harmony with nature by 2050. This vision statement is underpinned or further developed by a number of goods that are 2050 goals. And this vision statement on the goals are further underpinned by a set of 21 targets, which are defined as milestone targets to be achieved by 2030 in order to bring the world onto a path to achieving the 2050 vision. So schematically we have two times horizons, one which is 2030 for the achievement of milestone targets in order to bring the world onto a path to achieving the ultimate 2050 vision. Now, to go back to your question on what does it mean for businesses and financial organizations, what is important in this text is that building on the experience of previous agreements on biodiversity, this includes a strong consideration of the importance of businesses and public and private financial organizations in supporting the achievement of the vision. The text includes one of the 2050 goals which we refer to as goal D, which is about aligning financial flows to bridge the biodiversity financing gap. By aligning financial flows we mean achieving to strengthen the consideration of biodiversity within all types of investments and financial flows in order to reduce negative impacts and risks and generate positive impacts. This is a fairly broad vision statement, but what is now important is to view how this is underpinned by 2030 milestone targets. Again, I will not count all the targets which we have in the text, but suffice to say that one of those targets which we already discussed is about providing clarity and transparency through mandatory disclosures. Some of the targets are about mainstreaming as a general word, and that would be, I could define that by systematically integrating the consideration of biodiversity within policies and strategies that contribute to sea level but as well at organizational level. And lastly, another target, which is which we call 19.1, is about resources mobilization. That is bringing public and private entities to collectively leverage and mobilize the financial amounts that are necessary to achieve ultimately the vision of the framework. The biodiversity financing gap, as you may already know, is estimated at about 800 billion USD per year. And the framework, the draft framework hinges on this and other definitions surrounding the risk defined. So in conclusion, and very schematically, I would say that for a business or a financial entity, what is to expect from the global biodiversity framework is through the implementation of the framework by party countries towards mandatory disclosures on nature as well as towards the strengthening of strategies on biodiversity, both in terms of risks, de-risking and reducing negative impacts and in terms of mobilizing resources towards positive outcomes.

Dominique Barker: I think we have our work cut out for us. This is a very complex area and trying to convert a lot of the work that is going to come out of this into financial products. I do have great hope that we can do it, but it’s not straightforward. So it’s a complex topic. And part of what we try to do on this  CIBC podcast is try to educate people. So really appreciate your time today, Camille, and thank you for joining our show and giving us a little bit of a glimpse into what to expect at COP15 and some glimpse into this mandatory disclosure that we’ll see on nature related topics. Thank you.

Camille Maclet: Thank you very much.

Dominique Barker: Please join us next time as we tackle some of sustainability’s biggest questions, providing different perspectives to help you move forward. I’m your host, Dominique Barker, and this is The Sustainability Agenda.

Disclaimer: The materials disclosed on this podcast are for informational purposes only and subject to our Code of Conduct as well as IIROC rules. The information and data contained herein has been obtained or derived from sources believed to be reliable, without independent verification by CIBC Capital Markets and, to the extent that such information and data is based on sources outside CIBC Capital Markets, we do not represent or warrant that any such information or data is accurate, adequate or complete. Notwithstanding anything to the contrary herein, CIBC World Markets Inc. (and/or any affiliate thereof) shall not assume any responsibility or liability of any nature in connection with any of the contents of this communication. This communication is tailored for a particular audience and accordingly, this message is intended for such specific audience only. Any dissemination, re-distribution or other use of this message or the market commentary contained herein by any recipient is unauthorized. This communication should not be construed as a research report. The services, securities and investments discussed in this report may not be available to, nor suitable for, all investors. Nothing in this communication constitutes a recommendation, offer or solicitation to buy or sell any specific investments discussed herein. Speakers on this podcast do not have any actual, implied or apparent authority to act on behalf of any issuer mentioned in this podcast. The commentary and opinions expressed herein are solely those of the individual speaker(s), except where the author expressly states them to be the opinions of CIBC World Markets Inc. The speaker(s) may provide short-term trading views or ideas on issuers, securities, commodities, currencies or other financial instruments but investors should not expect continuing analysis, views or discussion relating to those instruments discussed herein. Any information provided herein is not intended to represent an adequate basis for investors to make an informed investment decision and is subject to change without notice. CIBC Capital Markets is a trademark brand name under which Canadian Imperial Bank of Commerce (“CIBC”), its subsidiaries and affiliates provide products and services to our customers around the world. For more information about these legal entities, as well as the products and services offered by CIBC Capital Markets, please visit www.cibccm.com.