Hello everybody, and welcome to the latest edition of C&F Talks. Today it's my great pleasure to have with me, David Craig, who's the Co-Chair of the Taskforce on Nature-Related Financial Disclosures, otherwise known as the TNFD. And David's going to be chairing and speaking at the Natural Capital Summit, which is being held in London on the 28th of November. Welcome, David.

Thanks, Maurice.

Very good to have you with us.

I think perhaps my first question is probably how do you think COP16 went and the relevant parts of COP29 to date? Do you think they have been supportive of the TNFD's objectives?

Well, I think you know we look at COP16 and we see the positives of what was achieved, digital agreement, indigenous rights.

We also look at the things that might not have been achieved that we wanted to, but I think it's important to also remember and look at how far we've come.

Yes.

Going back to the COP at Montreal, the coming Montreal agreement was made, look at how far we've come in terms of the evolution of natural capital and natural capital finance, the tools that are available, the awareness in the market.

And I think it's substantial and actually we should look at that in a very positive light and I think for our conference coming up, it's extremely interesting to look at the level of maturity and sophistication of some of these products and tools and the language and the understanding that people are using.

So, I don't think we should sort of always get fixated with there's one two-week event in South America and everything will be agreed then. I think we should look step back and look at how the market's evolving and particularly the nature finance market is evolving and maturing and growing, and I think that's how we should think about the conference that's coming up.

Absolutely.

And obviously the TNFD itself has enjoyed I'd say huge success in what you've done. Over 500 organisations are now committed to TNFD aligned reporting. How do you see all this moving forward? I know that the IFRS are building on your recommendations. How do you think things will move forward and do you think that there'll be further changes to those final recommendations as everything progresses towards implementation nationally?

Well, we always were setting out to create a voluntary framework. We were designing for the market, by the market with scientific and strong expertise input for that. So, before we talk about global standards and mandated regulations, I think a lot of the adoption is frankly driven by the fact that investors recognise that nature and climate are important issues, and we have to address them together.

I think corporates are now realising that there's risk in their business activities and their supply chains and they want to use a methodology that helps them understand that risk and the opportunities for transition as well, and frankly companies also need to address the questions that their investors are asking too. So, I think the voluntary side is really important.

A lot of the conversations I have with adopters is around making sure we understand this space, we know how to think about climate and nature together and that also we're getting ahead of the mandatory regulations that they know are coming by building skills, expertise, capabilities, understanding the data sets, building that what I call nature intelligence into their business as well.

So that's the voluntary side and, of course, that there are mandatory regulations as the CSRD from Europe which has already incorporated much of both the TCFD and now the TNFD approach and framework. And so actually by adopting TNFD, you can meet many of the objectives and requirements of the CSRD disclosure regulations and do that in a very strategic way using the leap framework that we've developed.

And of course, then ISSB have said that they intend to get feedback from the market and look at the area of both nature and climate. They're doing that work now and they've mentioned the TNFD, and we hope that they'll incorporate much of what the market is now adopting. So, there's a glide path that is both voluntary and companies that recognise that they want to get ahead of the curve, they want to understand these risks and investors want to understand them and also building that knowledge and capability and getting ready for mandatory requirements as well is important. So, I think the two of them actually work very well together.

Maurice

Listening to the mention of her speech that the Chancellor gave last week, what did you take away from that? I mean, obviously the UK is positioning itself as a leader in sustainable finance, but were there any particular elements that you thought were relevant to the development of nature-related reporting and natural capital more generally?

Well, I think it's been interesting since the new government in the UK has come in, there's been a number of speeches by ministers about the importance of nature and climate as key, and I think that's important signalling that we can't just be focused only on climate, but we have to look at nature as well. There was important messages in the Chancellor's speech about transition planning and of course you know the most effective transition plans look at nature and climate transition not separately but in an integrated way.

There was also mention of nature finance capabilities and products like biodiversity credits which many of us have been involved in with the UK, French and other governments around the world and a whole cadre of expertise putting recommendations forward about how a voluntary and compliance market for biodiversity credits should work. So, I think there was actually a lot to be said in that speech but also a lot from the government of what they're looking at.

So I think it's very encouraging that you've got that support from the UK government that they recognise that this is both a risk and an opportunity, an opportunity to create not just products in green finance and a centre of green finance expertise but also the jobs and the innovations that we're seeing from the more nature-positive technologies and processes that are coming forward as well. So very positive.

Maurice

And I suppose, you know, at the heart of this in order to be able to develop these markets you know data is fundamental and I know that TNFD has been doing some work in this area. Do you think that data is no longer such an issue or a challenge for the development of these markets?

We have to recognise data is important, but data is not also an excuse.

You know, we've developed financial markets for many years with imperfect data and so we mustn't, sort of, think that actually everything has to be perfectly made out before we can move forward. There's petabytes of nature data available around the planet and the world and the oceans, and more and more is being collected every day. Is it perfectly organised? Is it consistent? Does it have any data quality issues? Well of course, all those issues are there, but the results of many of the companies and investors that are piloting at the moment have recognised that whilst the data does have these issues there's plenty of data there to start the analysis and to start the work and to use it and it's developing all the time as well.

That was one of the reasons that three years ago we created the Data Catalyst, a group of over 140 companies now that are developing and building either the raw nature data or the analytics or the tools that are required for this. We've also launched at COP our roadmap for a nature data public facility. How do we take all of the data sources that are available today? How do we make them more easily accessible, particularly for smaller firms? How do we set quality criteria for standards of quality and make it easier? So, it is evolving.

We mustn't use data as an excuse. We recognise it as a powerful enabler, but we're also developing the data sets and the data standards like the Nature Positive Initiative which is creating the standard that's required to measure data. So there's significant progress on the data side, and I think that's going to continue over the next few years as well and it's really a case for companies and investors to start learning and understanding the data sets that are out there, the tools that they can use, the gaps or weaknesses or strengths of those tools, and really building that knowledge and that nature intelligence that I talked about earlier as well.

Yeah, so, a lot of very positive developments that we've discussed there, David.

And for our viewers, we very much hope you'll be able to join us at the conference itself, the Natural Capital Summit being held in London on the 28th of November, i.e. Thursday week.

If you wish to attend or you'd like to look at the programme in more detail, please do visit our website www.cityandfinancial.com, and David we're looking forward very much to seeing you at the event itself. Thank you so much.

Very much looking forward to it, Maurice. Very much looking forward to seeing everyone there and actually another year of the conference in looking forward to the conversations and the engagement that we're going to have.

Indeed, fantastic. Thank you so much, David.

Thank you.