Ethical Partners have been proud to have been active supporters of the TNFD Forum over the past few years, and to provide regular feedback on the development of the official TNFD recommendations, which were launched in December, as well as to be active members of the RIAA Natural Capital Working Group. Ethical Partners was also one of the first Australian organisations to pilot the emerging TNFD recommendations, working with Deloitte in 2022 to pilot a deep dive on several portfolio companies’ dependencies, impacts and preparedness for TNFD reporting, which we then extended across the entire portfolio in our 2023 proprietary inhouse ESG screening and integration process and active company engagements.
Building on this foundation and commitment to addressing Natural Capital risks, opportunities, and impact within our investment activities, we are now pleased to confirm that Ethical Partners will be an early adopter of the TNFD. We intend to publish initial disclosures that align with the TNFD recommendations for our 2024 financial year and develop our practice to fully disclose according to the TNFD over the coming years.
Ethical Partners is excited and encouraged by the release of the Taskforce on Nature-related Financial Disclosure’s (TNFD) recommendations and guidance for organisations to report on their nature-related dependencies, impacts, risks, and opportunities. We believe that consistent, comparable, and robust nature-related disclosures are a fundamental step for companies to begin to consider these issues and the actions that will be required to address them.
Furthermore, we believe that these disclosures will be invaluable for responsible investors such as Ethical Partners to be able to better assess risk and opportunity for our clients, allocate our capital to those companies leading in their understanding and impact on nature wherever possible and to help influence and encourage ASX listed companies improve their environmental performance through our active stewardship activities. Ethical Partners also believes that the TNFD provides a critical forum for investors ourselves to be accountable for the impact of our investments on nature.
Over 2023, it was our expectation, which was actively communicated to all portfolio companies, that all portfolio companies accelerate their actions towards understanding their impacts and dependencies, and towards disclosing according to the TNFD recommendations. These portfolio company engagement on this expectation will be accelerated over the coming year now that the recommendations have been finalised.
We also continue to actively advocate in the wider policy, legislative and regulatory space for mandatory nature related disclosures with both the ISSB and the Australian Treasury. This work is also supported by our active involvement in several collaborative initiatives to address nature-related issues, including through our commitment to the Finance for Biodiversity Pledge and involvement in the new Nation Action 100 collaboration.
Ethical Partners makes these commitments with the firm recognition that nature is the foundation of healthy societies, resilient economies, and thriving businesses: yet, sadly human activities are driving unprecedented nature loss and degradation. It also confirms our firm belief that companies can make a positive difference and contribute to a nature positive economy, the fundamental principle behind our investment processes, company engagements and wider advocacy activities regarding nature.
Ethical Partners are pleased to see Australia take the next steps to implement mandatory climate reporting with the release of draft climate standards, which we provided feedback on.
Ethical Partners have continuously called for the provision of high quality, comparable data on company’s climate governance and carbon metrics, which we believe is imperative for investors to fulfil the potential of responsible investment.
Ethical Partners was proud to be a signatory to the Share Action letter to the UK Financial Conduct Authority regarding the Consultation Paper on Diversity and Inclusion CP23/20 in December 2023.