Issues of accessibility, timeliness and comparability must be overcome as nature data userbase expands, says TNFD’s Goldner.
With investors and companies struggling to access “reliable and comparable” nature-related data, the Taskforce on Nature-related Financial Disclosures (TNFD) believes there is a strengthening case for the creation of a public data facility.
Speaking at the summit for a New Global Financial Pact in Paris in June, David Craig, Co-Chair of the TNFD, said that the landscape for nature-related data remains inaccessible.
Tony Goldner, CEO of TNFD, told ESG Investor that there is an awareness among stakeholders that nature-related data, particularly on the state of nature, needs to be improved.
The TNFD started to address the issue with the launch of a Nature-related Data Catalyst in July last year with the aim of stimulating innovation and improving market access to nature-related data.
Barriers to accessible data
The TNFD recently concluded a high-level scoping study to explore and evaluate the case for a global nature-related public data facility. Twelve organisations collaborated with the TNFD on the study, with an initial focus on the immediate need to improve the availability, quality and comparability of state of nature data.
Goldner pointed to three central issues of accessibility, timeliness and comparability where there is a “need to upgrade”.
On accessibility, Goldner flagged that nature-related data is often “hard to find” or having access to it limited by being behind a paywall.
He noted there are “issues with the timeliness of the data”, with much of it being “quite old”, often coming from peer-reviewed scientific sources meaning the data within them can be two to four years old by the time of publication.
Goldner also underlined the importance of the comparability of nature-related data for investors.
“If we don’t have data standards around what is and isn’t being measured in a consistent way, then that undermines comparability which is obviously essential to the decision usefulness and the way in which the data is used by investors,” he said.
Martina Macpherson, Head of ESG Product Strategy and Management at SIX Financial Information, told ESG Investor that it “seems there’s an unstoppable momentum towards the principle that data sets should be made widely available for research and also for commercial purposes”.
Connecting the nature data dots
Goldner said that, while there is an abundance of nature-related data it’s “hard to find and it’s not particularly well connected”.
“The real challenge is about connecting and maintaining the data that’s there,” he added. “On that foundation, we can then start to address the gaps and add and improve with additional data over time.”
Goldner noted that there is a need to “better connect disparate sets of data” that already exist across academic institutions, as well as scientific and international organisations.
“We’re not pulling for a warehouse or putting all the data points into one database,” he explained. “It’s really about connecting what’s there and that can come from multiple different sources […] there are already a number of organisations that have been collecting related data for a long time [and] many of them have excellent quality data.”
Goldner also noted that issues of connection and maintenance are the two key areas that need greater investment and focus, which the TNFD believes can be addressed through the idea of a nature-related public data facility.
“Having the ability to collect the same data year in year out, and build high quality time series data is vital,” he added.
MacPherson agreed that initiatives still face barriers to entry and data users often are “critical when it comes to the scope, depth or track record of these open data sets”.
“Part of the difficulty is that companies and investors are still moving into the nature space for the first time in many cases,” Goldner said. “There’s a lack of familiarity [including] where to find the data and what data they need.”
Growth in demand continues
One of the key findings of the TNFD-led high-level scoping study was that nature-related data demand is rapidly growing, with the interest in global scale solutions accelerating since agreement of the Kunming-Montreal Global Biodiversity Framework (GBF) at COP15 in Montreal last year.
Following the agreement of the GBF, the number of governments interested in the topic of nature-related data has increased, according to Goldner.
He flagged that since the agreement governments must “refresh or develop” their national biodiversity strategy action plans, with “new and more demanding needs for nature-related data than perhaps they’ve had before”. As such, national governments would be a “big beneficiary” of a nature-related public data facility, he said.
Goldner said that business and finance are also paying greater attention to nature-related issues, with the user group “getting much bigger”.
“All those users have different needs and this is going to change the dynamic by which nature data is collected and made available,” he added.
He additionally noted that with a growing interest from business and finance there will be growing interest from civil society to monitor the targets, reporting and claims made by companies and financial institutions.
The TNFD also underscored the importance of a data facility in helping organisations “become more resilient in the face of nature-related risks”, as well as delivering sustainable development for local communities and facilitating capital flows to “nature positive outcomes”.
Ongoing consultation
The TNFD is yet to put a timeline on when a “concrete proposal” for a nature-related public data facility might be launched.
“It’s a bit premature to put a timeline for when something like this might be launched,” said Goldner.
“We’re keen to move to the next phase of work, which would be sort of blueprinting how this would work in practice,” he said, adding that the next stage in the project’s work is to “broaden out the consultation process”.
With only 12 companies currently having contributed to the development of the facility, Goldner noted it aims to engage with a “much larger group of interested stakeholders”.
An important part of this wider consultation process will be bringing existing frameworks and initiatives together, with the aim of overcoming the inconsistency of nature-related data globally, according to Goldner.
“Synergy is going to be absolutely essential to the success of a distributed and connected system,” he noted.
SIX’s Macpherson agrees that harmonisation between climate and nature-related open data facilitation initiatives is key, given that the transition trajectories of both are “interdependent and closely connected”.
“It is important that the initiatives ensure alignment, mapping and interoperability between the different normative and regulatory reporting frameworks and standards,” she added.
Despite a timeline for this facility not yet being established, Goldner underscored this doesn’t mean that companies should “just sit back and wait for the perfect set of data solution to be available”.
“It’s really important to acknowledge that there is data available today that companies and financial institutions can be using to get started,” he added.
The TNFD is set to publish its final recommendations based on final feedback and pilot testing in September, following the release of its fourth and final beta framework for nature-related risk management and disclosure in March.
