To end destructive finance we need transparency & accountability – not the distraction of so-called “disclosure”

This week, negotiators will gather in Rome to prepare discussions for COP17 of the Convention on Biological Diversity.
This article was first published by the CBD Alliance

One of the five strategies highlighted in the IPBES Transformative Change Assessment is transforming economic sectors for nature and equity, including the sub-strategy of transforming financial systems. Indeed, the world has an opportunity to reverse the billions, if not trillions, of dollars in private finance driving the biodiversity crisis.

But this requires facing some basic truths.

Firstly, bad financing won’t stop so long as banks and investors can keep 100% of profits they make off deals with companies or projects linked to biodiversity destruction and human rights abuses. Impunity is so engrained, it is rarely even acknowledged.

Secondly, bad financing won’t stop so long as it can hide in the shadows. True transparency means ending a status quo where banks hide which big companies they finance or what complaints they face about biodiversity. Currently, local communities are prevented from even knowing if a bank is financing high-risk activities in their area.

The good news is that there are many examples of how greater accountability and true transparency can be written into law.

This requires, however, ending the distraction of so-called “disclosure” initiatives, including the Taskforce on Nature-related Financial Disclosures (TNFD). The TNFD framework recommends that banks and investors, disclose high-level, aggregated and mostly non-verifiable data – while denying true transparency about what they finance.

This framework was decided by a taskforce of 40 corporate groups who appear grossly unqualified to shift practices on biodiversity. At least 45% of the TNFD taskforce members face serious environmental and human rights concerns. At least 1 in 8 face formal greenwashing cases. Another 1 in 8 face – individually – 20 or more investor bans.

TNFD champions include mining company Vale, MUFG bank and Ecopetrol. Vale’s environmental disasters have killed almost 300 people in the last decade. Yet, their TNFD reports give the impression of an earnest, sustainable company. MUFG is one of the world’s largest bankers of both forest-risk commodities and fossil fuels. MUFG’s TNFD reports highlight how it is selling consulting services advising other companies on how to write TNFD reports. And Ecopetrol is a company reporting hundreds of oil spills each year, facing allegations of impacted fish & other wildlife deaths.

The fact that companies with some of the worst reputation on biodiversity and human rights are championing TNFD highlights its risks as a false solution.