Schroders has published its first report based on the government-recommended Taskforce on Nature-related Disclosures (TNFD).
These new voluntary disclosures have been designed to help asset managers and asset owners, such as pension providers, identify potential nature-related risks and opportunities. They follow the broad outline of the Taskforce on Climate-related Financial Disclosures (TCFD) reports that are now mandatory for financial companies.
Schroders says the publication of its Group Nature Report, underscores the firm’s commitment to actively navigating nature risks and meeting clients’ investment expectations in this space.
The TNFD was launched in 2021, receiving global endorsements from the G7, G20 and then UN Special Envoy for Climate Action and Finance, Mark Carney — now prime minister of Canada.
Schroders has become an early adopter among its financial services peers to publish these disclosures.
The report follows the launch of Schroders’ proprietary tool, NatCapEx, earlier this year, which supports nature-focused, TNFD-aligned analysis across 9,000 public companies, building on Schroders’ SustainEx model.
Schroders global head of sustainable investment Andy Howard says: “As a active asset manager, we are leading by example proactively disclosing our nature-related risks and opportunities, as well as developing our new proprietary tool, NatCapEx, to help fill the nature data gap.
“With the world’s natural environments under growing pressure, measuring and managing the nature-exposed risks of our investments is becoming increasingly important.
“We also hope this voluntary disclosure in line with TNFD will help galvanise broader progress in corporate and investment disclosures.
“We will continue to engage with companies to encourage them to publish their own nature-related disclosures and shed light on this increasingly important risk and opportunity.”
According to the Group Nature Report, the degradation of nature, such as changes in soil quality or water availability, and the consequential loss of ecosystem services that economic activity depends upon, pose financially material risks to clients’ potential investment returns.
For example, the World Bank estimates even a partial collapse of three ecosystem services – pollination, fisheries and timber production – would cost the global economy 2.3 per cent of GDP annually.
At the same time, the shift to nature-positive practices could unlock USD $10.1 trillion of annual business opportunities for investors.
