Date posted: 18/04/2023

Global risks table turning green and recent updates from the Taskforce on Nature-related Financial Disclosures (TNFD)

The World Economic Forum Global Risks Perception Survey has never looked so green. In 2023, failure to mitigate climate change tops the chart, with six of the ten risks being in the environmental category in the long term. 

World Economic Forum Global Risks Perception Survey graph

Source: World Economic Forum Global Risks Perception Survey 2022-2023

Why is nature important to accountants and their businesses?


According to the Taskforce on Nature-related Financial Disclosures (TNFD), more than half of the world’s economic output (around US$44 trillion) is dependent on nature. Organisations that take these resources for granted may not be appropriately considering the risks they face as the world’s resources deplete. This directly links to the fourth long term risk highlighted by the World Economic Forum, Biodiversity loss and ecosystem collapse. Risks are not limited to this dependence; a new legal opinion by Chapman Tripp for the Aotearoa Circle in New Zealand means that “business decisions made in ignorance of nature-based risks that result in financial loss may be open to challenge in the future”. The TNFD recently published the fourth and final beta framework covering nature-related risks and impacts, which includes metrics, target setting guidance, sector and biome (including rainforest) guidance, ahead of their final recommendations expected in September 2023.  

What role do accountants play?

We have long held the viewpoint that the accounting profession has a significant role to play in climate change mitigation and adaptation. Further, as outlined in our March 2022 call to action, we see a translational role for accountants in the nature crisis to help organisations report on nature impacts. A recent survey by CA ANZ found that 77% of members believe accountants have a role to play in supporting businesses to understand, manage and disclose nature-related risks and opportunities, with 64% already considering their organisations’ impact and reliance on nature.

CA ANZ’s Nature Event and COP 15

In December 2022, we hosted a webcast for over 2,000 members, highlighting the increasing interest in this area. In the same month, governments from across the world came together at COP 15 (shorthand for the 15th meeting of the Conference of the Parties to the UN Convention on Biological Diversity (CBD) and agreed on a new set of goals to guide global action to halt and reverse nature loss. Among these are targets for effective conservation and management of at least 30% of the world’s lands, inland waters, coastal areas and oceans by 2030

Looking to the future

Ultimately, every organisation in the world depends on nature in some way, but this is not quantified due to the absence of cost for free resources. TNFD’s ambition is for organisations to shift from producing nature-negative outcomes toward nature-positive ones. This is significantly wider than the more established Task Force on Climate-related Financial Disclosures (TCFD), which the International Sustainability Standards Board (ISSB) is building upon in the development of their sustainability standards. The ISSB indicated they will consider the TNFD’s work as it relates to “information needs of investors” and include ‘connect climate and nature’ in their upcoming priorities. The ISSB is planning a public consultation this year to further understand standard-setting priorities on biodiversity, ecosystems and ecosystem services. The fact that TNFD is building off the TCFD should result in faster adoption, despite the enormous landscape making it harder to approach. The TNFD does not currently have the regulatory force pushing it forward, but it is a market-led initiative, funded by government partners and backed by G7 and G20 political leaders so we expect that organisations will be encouraged to adopt these disclosures in time. Accountants will likely have a role in disclosure development and assurance, along with helping their organisations to understand the impacts. 

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