Letter to the Task Force on Nature-related Financial Disclosures and Glasgow Financial Alliance for Net Zero on the Discussion Paper on Nature Transition Plans

To The TNFD and GFANZ:

The American Bankers Association appreciates the opportunity to comment on the Discussion Paper on Nature Transition Plans ("The TNFD DP"). The TNFD DP details draft guidance to help organizations develop and disclose nature transition plans aligning with the Kunming-Montreal Global Biodiversity Framework (GBF), agreed upon by governments globally (ex-US) at the December 2022 United Nations Biodiversity Conference (COP15). Financial regulators worldwide have given significant attention to the GBF, which was also a focus point of COP16 in October 2024. Among other things, governments around the world committed during COP16 to impose nature-related disclosure and risk management requirements in compliance with the GBF upon large corporation and financial institutions by 2030.

The TNFD DP must be understood within the context of the Consultation Paper simultaneously published by the Glasgow Financial Alliance for Net Zero (GFANZ) titled Nature in Net-Zero Transition Plans (The GFANZ CP), which proposes guidance focused on nature in support of net-zero transitions. Both proposals set expectations for the private sector around nature-related issues and transition planning and are based on the five themes for transition planning set out in GFANZ’s 2022 report Financial Institution Net-zero Transition Plans (2022 GFANZ report).

ABA members consist of a wide range of lending institutions of all sizes and business models. As discussed in more detail below, the characteristics of nature-related financial risks are often highly localized. As a result, mid-sized and community banks are uniquely positioned to be impacted by nature-related financial guidance. Mid-sized and community banks in the U.S. are often the backbone of many specific communities, and it is the ongoing resilience of these communities that will be critical if the objectives of the TNFD recommendations can be achieved.

ABA's long-standing position is to preserve banks’ ability to make the choices that make the most sense for their customers, the communities they serve and the bank’s business plan—within the requirements set by law to ensure service to protected classes and to prevent money laundering or other illicit activities. We oppose – at any level of government – efforts that would force banks to lend to designated favored entities or that would discourage or prohibit banks from lending as a way to indirectly regulate or restrict certain activities or businesses.

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