In this way, it is important to be clear about legal obligations and the proper implementation of reporting standards such as the TNFD, as they can influence investment decisions. Well, in some cases, companies have hesitated to make investments in new businesses and projects due to ignorance of the legal duties derived from these reports.
With the arrival of the COP16 on Biodiversity in Colombia, the management of business risks related to sustainability, specifically with nature, will take on greater relevance. This meeting will be a central platform to advance the achievement of the objectives of the Convention on Biological Diversity and follow up on the Kunming-Montreal Global Biodiversity Framework.
The TNFD (Taskforce on Nature-related Financial Disclosures), published in September 2023, is a framework that determines recommendations to identify and manage each company’s own nature-related risks, and disclose the corresponding information. This framework groups both financial materiality and impact materiality, recommending risk management from a perspective of double materiality, which allows a broader vision of the sustainability of companies, benefiting all its stakeholders by providing an image more complete of its practices and businesses.
However, it should be taken into account that companies usually question the appropriate procedure to establish the materiality, from a quantitative and qualitative perspective, of the information to be reported. Determining this materiality is essential, since the information disclosed and the language used must be aligned with the companies’ risk management system, to mitigate, among others, legal and reputational risks.
In this way, it is important to be clear about legal obligations and the proper implementation of reporting standards such as the TNFD, as they can influence investment decisions. Well, in some cases, companies have hesitated to make investments in new businesses and projects due to ignorance of the legal duties derived from these reports. It is therefore relevant that regulations are clear and that companies fully understand their responsibilities to avoid slowing development and investment.
It is essential that companies train themselves on these issues and, as indicated by the TNFD, balance the costs and efforts of preparing sustainability reports, without forgetting that the objective is to demonstrate the veracity and coherence of their ESG practices, find opportunities in risk management, guarantee legal compliance and sustainability in the medium and long term.
Johanna Martínez *Asociada de Posse Herrera Ruíz
