New network for nature-related financial reporting launched

Under the initiative of Prof. Dr. Ralf Frank, Managing Partner of Sustainserv and board member of Baum e.V., a new German platform was launched at the beginning of December to promote nature-related financial reporting in companies and financial institutions. This network will act as a German consultation group for the international Taskforce on Nature-related Financial Disclosures (TNFD) and help market players to better understand the importance and implementation of the TNFD recommendations and to find practical approaches for action.

Background: TNFD and the need to catch up in Germany

The TNFD aims to make the dependencies of ecosystems and the ecological impact of business processes transparent and to integrate them into financial and corporate decisions in the long term. While numerous companies, banks and investors in other countries are already committed to these disclosures, Germany is clearly lagging behind. There are currently only six TNFD users in Germany, whereas there are already eleven in Switzerland, 23 in France and 68 in the UK. Countries such as Japan are also well ahead with well over a hundred users.

Launch event at the Federal Environment Ministry met with a great response

The kick-off event in Berlin, to which the Forum Nachhaltige Geldanlagen (FNG) und Baum e.V., Europe’s largest business association for sustainable business, had invited, attracted more interested parties than expected: around 120 participants from a wide range of sectors – from the real economy, finance and services to consulting and science – gathered at the Federal Ministry for the Environment (BMUV). The large response shows the growing interest, but also the knowledge gap: Many of those present first want to familiarize themselves with the requirements, methods and opportunities of nature-related reporting.

Why integrate nature-related factors into financial decisions?

According to Bettina Hoffmann, Parliamentary State Secretary at the BMUV, it is essential to integrate the valuable services of ecosystems into financial and business models. This not only reduces risks, but also enables new competitive advantages. The TNFD offers a practical, less bureaucratic toolbox for this. According to TNFD Co-Chair Daniel Craig, natural risks are already implicitly included in balance sheets, portfolios and investment decisions. Raising awareness of this and strategically managing nature-related factors is a crucial step on the way to long-term resilient business models.

Objectives and tasks of the new network

• Knowledge transfer and exchange: The network provides a platform for clarifying open questions, sharing experiences and providing methodological support. Companies can learn how to measure and disclose nature-related risks and dependencies and integrate them into their decision-making processes.
• Preparation for future regulation: It is foreseeable that regulatory authorities will use the TNFD recommendations as a framework for guidance in the future – similar to the already established TCFD requirements on climate-related financial information. Companies can prepare for such requirements and contribute to the design of the standards by engaging with them at an early stage.
• Establishing reliable data and standards: The group aims to help improve market access to decision-relevant nature-related data. It is also important to further develop the TNFD methodology and coordinate it with existing frameworks (e.g. ISSB, CSRD) in order to establish uniform and globally applicable standards.

The initiator

Prof. Dr. Ralf Frank, Managing Partner at Sustainserv, played a key role in launching the German TNFD network. Together with other players from the financial and real economy, he will help Germany to take an important step forward in the direction of an environmentally friendly economy.