The HP5 and Nature workstreams held a workshop to inform members on the developments in the climate- and nature-related disclosure requirements, what these standards mean in practice, and the role of Finance Ministries in implementing them at national levels:

(1) The Taskforce on Nature-related Financial Disclosures (TNFD) disclosure recommendations and guidance that encourage and enable business and finance to assess, report and act on their nature-related dependencies, impacts, risks and opportunities.

The recommendations have been designed to meet the corporate reporting requirements of organizations across jurisdictions, to be consistent with the global baseline for corporate sustainability reporting and to be aligned with the global policy goals in the Kunming-Montreal Global Biodiversity Framework. The TNFD disclosure framework consists of conceptual foundations for nature-related disclosures, a set of general requirements, a set of recommended disclosures structured around the four recommendation pillars of governance, strategy, risk and impact management, and metrics and targets. This is consistent with the approach of the TCFD and the ISSB’s IFRS Standards.

(2) IFRS International Sustainability Standards Board (ISSB) disclosure requirements that became effective on January 1, 2024 - IFRS S1, General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2, Climate-related Disclosures

These standards require entities that follow IFRS to disclose sustainability-related and climate-related information with their financial statements. These standards will affect the deliberations of global standards setters such as the Global Reporting Initiative, Financial Stability Board, EU Corporate Sustainability Reporting Directive, International Organization of Securities Commissions (IOSCO) and the U.S. Securities and Exchange Commission (SEC). Each country’s standards setters still should accept the new standards. Brazil became the first to do so, making them voluntary by January 1, 2024 and mandatory by January 1, 2026. Kenya, Nigeria, Zimbabwe, and Sri Lanka have announced full adoption.

Agenda:

• Coalition Co-Chair Deputy from Indonesia, Pack Noor, opened the workshop.
• Emily McKenzie, Technical Director, TNFD Secretariat – presented on rationale of the TNFD’s recommendations, progress with the adoption, and the role of the Ministries of Finance (see presentation here).
• Mardi McBrien, Chief of Strategic Affairs & Capacity Building, IFRS Foundation – presented on ISSB rationale, S1 and S2 frameworks, and opportunities for implementation, and role of Ministries of Finance (see presentation here).
• Open discussion: Coalition members from Mexico and Colombia shared their experiences in implementing disclosure requirements, and the GFANZ explained what they are doing on nature in net-zero transition planning.
• Olha Krushelnytska, Coalition Secretariat, moderated the workshop.