The World Federation of Exchanges (WFE), the global industry group for exchanges and CCPs, has commented on the Climate Disclosure Standard Board’s (CDSB) issuer guidance for biodiversity related disclosure.
The WFE supports the role that the CDSB has played to date in the development of climate- related disclosure standards under the Taskforce for Climate-related Financial Disclosures (TCFD), which have been endorsed across the WFE membership. The increased focus on providing issuers with guidance on how to disclose against biodiversity related risk and opportunity is both timely and necessary, as momentum builds around the recent announcement of the Taskforce for Nature Related Disclosures (TNFD) and the Dasgupta Review of the Economics of Biodiversity Loss. It is right that other aspects of the ‘E’ in ESG are now given the same level of attention as climate.
Our members are broadly in support of this guidance which will enable users of accounts to assess material and decision-useful biodiversity related information, to inform capital allocation decisions. However, it is clear that significant and unique challenges still remain concerning: (i) financial product development, (ii) provision and collection of data; (iii) measurement of data; and (iv) clear and consistent methodologies.
As the CDSB further refines its guidance the WFE would recommend that it considers the following:
- Highlighting innovations and nature-based solutions from amongst our membership;
- Spatial Finance[1] as a way of closing the data gap on biodiversity-related risks and opportunities;
- That the CDSB use this guidance to inform the work of the International Financial Reporting Standards Foundation (IFRS), as it establishes an International Sustainability Standards Board.
[1] The integration of geospatial data and artificial intelligence to scan and interpret data on the cloud, which can be used to measure and manage environmental-related risk.
Nandini Sukumar, Chief Executive Officer, the WFE said: “Most of the focus on ESG to date has been on climate related risk and opportunity. We fully support the CDSB’s efforts to shine a light on equally important environmental issues, and to encourage a shift in financial flows towards a ‘nature positive’ future. As an industry that sits at the heart of the financial services ecosystem, we see many benefits in a consistent approach to disclosure on biodiversity which will promote transparency and accountability as well as capital allocation towards nature-based solutions. We look forward to contributing to discussions on this important agenda at the forthcoming biodiversity COP and beyond”.
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