Seeking a natural fit: Tapping the new TNFD framework

WHY do natural ecosystems matter to a city-state like Singapore? After all, the Singapore economy hums along on global trade, not on the resources that sub-tropical rainforests could provide.

One of the reasons why nature does matter to financial centres, as the new Taskforce on Nature-related Financial Disclosures (TNFD) points out, is that “nature loss poses a major risk to businesses, while moving to nature-positive investments offers opportunity”. Another, of course, is that we are part of nature and it has an intrinsic value.

The TNFD, launched in June 2021, aims to be a market-led, science-based framework that helps businesses integrate nature into their decision-making. Up to now, the natural world has been treated as a market externality. In other words, “what happens to nature” is not priced into financial decision-making. Agriculture, for example, relies on complex ecosystems in the soil. But no one has to consider what might happen to the soil microbiome when they develop new fertilisers, though the costs of any damage are, ultimately, borne by everyone.