Elizabeth Mrema, the Executive Secretary of the United Nations Convention on Biological Diversity, spoke to Luke Anami on how companies can take care of nature.
What is the Taskforce on Nature-related Financial Disclosures (TNFD) and why was it established?
The world’s ecosystems and biodiversity are being destroyed at an accelerating rate, with profound implications for sustainability and the global economy. More than half of global economic activity — some $44 trillion a year — is either moderately or highly dependent on nature. As a result, the continued deterioration of flora, fauna and ecosystems must be tackled and accounted for, including by financial institutions, businesses, investors, and regulators.
The TNFD’s mission is to develop and deliver a risk management and disclosure framework for organisations.
It looks at financial institutions like banks, insurance, real estate management and such corporate bodies to report and act on nature related risks of their operations. We also help them shift global financial loss from a nature-negative to a nature-positive outcome.
An 18-month process of consultation and collaboration is done before a finalised version of the framework is released. It is the first integrated approach to incorporating nature-related risk and opportunity analysis into corporate and financial decision-making.
The taskforce was established last June. I am privileged to serve as one of the co-chairs with David Graig.
The framework is market-led, science-based and government-funded. It is endorsed by the G7 and G20. The TNFD will enable a shift to nature-positive business models, which could generate $10 trillion in opportunities and support 350 million jobs by 2030.
How will the taskforce’s framework affect financial institutions?
First is to get financial institutions to better understand the risks of their dependency on the activities of nature and biodiversity: how they can assess the risks and impacts and dependencies on nature also the opportunities.
The World Economic Forum and scientific reports say that 50 percent of the global GDP is moderately or highly dependent on nature.
There are opportunities yet the inter-governmental panel on the diversity ecosystems services says biodiversity loss is at an unprecedented rate in the history of mankind, with over a million species that could go into extinction in this century. If so, let us look at the ecosystem —agriculture and production. We all depend on food production from nature. The air we breathe is from nature, even the water we drink and use.
Regional economies depend on that same nature. For Africa, agriculture production is key yet biodiversity loss since 2020 is at 62 percent.
How accurately can the taskforce framework assess the risks?
With half of the world’s GDP moderately or highly dependent on nature and its services, financial institutions and businesses can no longer afford to overlook nature in strategy, risk management and capital allocation decision making.
The framework will not only assess the risks, but will also provide the framework.
The companies will assess what they are proposing in what we call leap meaning, the exact location where the project is. Once that is done, then the project can be evaluated.
So it is the location, evaluation, assessment then the procedure and the practice.
What are some of the sectors that are hard hit by nature and what role will the taskforce play?
For Africa, agriculture is the mainstay of the economy and it affects all aspects of a country’s economy including tourism, natural habitats, forests and biodiversity.
For the banks in particular — the loans and grants they give out — are they looking at whether those projects are nature negative or nature positive?
We need to put in place checks and balances on the projects they are financing.
The framework comprises 34 individuals from financial institutions, businesses, and market service providers with assets under management of $18.3 trillion and operations in over 180 countries.
TNFD’s 13 core knowledge partners, which include leading science, standard and data bodies, also provided detailed input into the first beta version framework to ensure it is scientifically sound.
Elizabeth Maruma Mrema is Executive Secretary of United Nations Convention on Biological Diversity (CBD), a multilateral treaty addressing the loss of biodiversity and climate change.
She has two decades of experience working in the development and environment sectors.
She is biodiversity leader and lawyer, from Tanzania, with a track record of negotiating next-generation policies and enabling instruments for planet, people and prosperity.
Elizabeth’s work as Deputy Director of the Ecosystems Division at the UN Environment Programme (UNEP) focused on the development, implementation and enforcement of environmental laws both at the national, regional and international level.
She has played different roles in UNEP over the years.
She was a Senior Legal Officer and Chief of the Multilateral Environmental Agreements (MEAs) Support and Cooperation Branch in the then Division of Environmental Conventions (DEC), and later a Principal Legal Officer and Chief of the Biodiversity/Land Law and Governance Branch in the then Division of Environmental Law and Conventions.
In addition to her role as the Law Division Director at UNEP, she was also the Acting Director of the Corporate Services Division.