Overview
TNFD (Taskforce on Nature-related Financial Disclosures) is an
international organization building a framework for companies and financial institutions to assess and disclose "nature-related risks and opportunities," as well as that framework itself.
Following the climate change version "TCFD," the final recommendations (v1.0) were released in September 2023.
This enables investors to make financial judgments like "this company makes money by destroying nature, so it's high risk" or "this company contributes to nature restoration, so it has future potential."
Theoretical Background
From "Climate" to "Nature"
Building on the success of TCFD (climate change), recognition has grown that similar risk management is needed for all "natural capital" including biodiversity and water resources.
The World Economic Forum's Global Risk Report also lists "biodiversity loss" as a top long-term risk, making visualization of nature risks essential for financial market stability.
Detailed Explanation
The LEAP Approach
This is the nature-related assessment process recommended by
TNFD. It is the most important concept when utilizing IKIMON.
- L (Locate): Identify points of contact with nature (locations).
- Is your factory or supply chain in an ecologically important place (hotspot)?
- E (Evaluate): Assess dependencies and impacts.
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Dependency: How much do you rely on nature's benefits like groundwater or pollination?
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Impact: What damage are you causing to nature through pollution or land conversion?
- A (Assess): Evaluate risks and opportunities.
- Risks of business interruption due to nature degradation, or opportunities to increase brand value through conservation.
- P (Prepare): Prepare for disclosure and response.
- Specific goal setting and reporting.
The Four Pillars of Disclosure (Same Structure as TCFD)
- Governance: What is the structure?
- Strategy: Scenario analysis, etc.
- Risk Management: How to identify and reduce risks.
- Metrics and Targets: Specific numerical targets.
Critical Examination
Data Shortage and Complexity
In Locate (location identification), tracing back supply chains to "accurately understand the exact location and ecosystem of raw material origins" is extremely difficult for many companies.
Also, since biodiversity cannot be measured with a single indicator like CO2, evaluation methods are proliferating, creating challenges for comparability.
What IKIMON Can Do
IKIMON becomes a powerful weapon in the
"Locate" and
"Evaluate (understanding impact/dependency status)" phases where companies struggle most with
TNFD compliance.
- Locate Support: Facts like "rare species XX inhabits the area around our factory, making it a priority management zone" can be identified using citizen data.
- Monitoring Indicators: IKIMON data can be used as specific, quantitative KPIs (such as increase in species numbers) to demonstrate contribution (opportunity) to Nature Positive.
- Engagement: Conducting surveys together with stakeholders (local residents, employees) itself becomes a track record of "stakeholder engagement" required by TNFD.
References
- TNFD. Recommendations of the Taskforce on Nature-related Financial Disclosures.
- Ministry of the Environment, Japan. Guide to Accelerating TNFD Adoption.
