Sancroft Insight: June 2021

Sancroft Insight: June 2021
30th June 2021 Judy Kuszewski
In Blog

Welcome to Sancroft’s June newsletter! There is, as ever, much to catch up on, and we are excited to share some updates once again this month.

First, we turn to the latest sustainability initiative whose four-letter abbreviation is set to make waves in our understanding and management of impacts on nature and biodiversity – the Taskforce on Nature-related Financial Disclosures (TNFD). The overarching aim of this new group is to align corporate reporting and financial analysis to alleviate nature-related risks: shifting global financial flows from nature-negative outcomes to nature-positive outcomes

TNFD, first announced in July 2020, will follow a similar trajectory as its climate-focused predecessor TCFD, aiming to give companies and financial firms a more complete picture of their environmental risks and the consequences for their businesses that may be relevant to investors. The WWF’s Global Futures Report published last year illustrates the need for action. The report estimates the decline of natural assets will cost at least £368bn annually and that by 2050 the cumulative cost will reach £8trn, almost equivalent to the combined economies of the UK, France, India and Brazil. Accounting for natural capital losses in financial terms will enable corporate decision makers to understand their impacts and subsequent role in the depletion of nature.

TNFD promises to drive accountability and tangible initiatives via actionable and accessible recommendations. This will be achieved through TNFD’s framework which will enable organisations to report and act on evolving nature-related risks and opportunities.

Meanwhile, a new tool developed by UN PRI and UNEP-WCMC provides a complement to the upcoming TNFD framework. ENCORE is an interactive online tool, which highlights how businesses may be exposed to accelerated natural capital depletion. It has been designed to facilitate investors’ ability to identify portfolio exposure and take decisions accordingly.

TNFD is currently in the first phase of building the framework. The working groups will bring together 74 financial institutions, corporates, governments, regulators, multilaterals, NGOs and consortiums, spearheaded by Banorte, BNP Paribas and the Green Finance Institute. Their focus will be to define the necessary metrics over the next year, before heading into a pilot-testing and refinement phase towards an expected framework launch in 2023. Stay tuned for updates from the taskforce and how this could impact your business.

This month we have new insights from our team.  Analyst Ilkka Saarinen reviews the EU Taxonomy of sustainable activities to help make sense of what it is, why it is important and what it really means for businesses.

Consultant Ailsa Dormon takes us across the globe to China’s cotton supply chain, highlighting the complex challenges for fashion brands in finding answers to questions of ethical credentials. Should brands renounce all Chinese cotton, work with the suppliers to tackle these issues or wait for the storm to blow over? Read on to find out how these difficult questions can be prioritised and addressed.

Finally, Analyst Erika Furbert takes a look at how the upcoming Extended Producer Responsibility (EPR) Policy is impacting the textiles industry and how companies should be poised to respond.

We would also like to take this opportunity to welcome the newest members of the Sancroft Team Ailsa Dormon, Ilkka Saarinen, Kwame Taylor, Charlotte Matthews, and Matt Thorogood. We are excited by the continuing growth of Sancroft look forward to working with you soon.

Be sure to follow us on LinkedIn for our regular announcements and team updates. Wishing you all a great month ahead.

At Sancroft we seek to challenge business to think differently and to make sustainable profits they can be proud of. Please do get in touch to find out how we can help.

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