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With global awareness of biodiversity loss and environmental degradation at an all-time high, more and more companies are adopting voluntary environmental, social, and governance (ESG) disclosures. If you're looking to strengthen your sustainability reporting, this guide will tell you everything you need to know about the Taskforce on Nature-related Financial Disclosures (TNFD).
What is the TNFD?
The Taskforce on Nature-related Financial Disclosures (TNFD) is a voluntary framework enabling businesses and financial institutions to incorporate nature considerations into their decision-making processes.
The TNFD builds on the work of the TCFD (Task Force on Climate-related Financial Disclosures), shifting the focus from climate to nature. Investors and customers have come to expect transparent reporting on how businesses affect nature and local ecosystems. The framework establishes a scientific, standardised approach for corporate nature-related communications, eliminating subjectivity and enhancing reporting credibility.
Just as greenwashing regulations seek to demystify discourse around greenhouse gases, the TNFD seeks to make ecological reporting as rigorous and certifiable as traditional financial disclosures. This means stakeholders can trust not only the framework, but the data itself.
Why TNFD matters for businesses
Traditional sustainability reporting typically centres on emissions and climate metrics, but TNFD broadens this perspective. The framework encompasses nature-related dependencies (water, soil, pollination), ecological impacts (deforestation, habitat loss), and biodiversity-related business risks that previous reporting systems have often overlooked.
Integrating TNFD into your sustainability strategy delivers several advantages:
- Transparent, standardised reporting adds substance to your sustainability credentials, strengthening investor trust.
- Identifying nature dependencies reveals previously unrecognised vulnerabilities, improving risk management while demonstrating a company’s conscientiousness.
- Revealing a commitment to biodiversity resonates with stakeholders and customers, enhancing brand reputation.
- The framework's rigorous structure also deters unsubstantiated environmental claims, helping prevent greenwashing.
TNFD has gained particular traction in Japan, where regulators and businesses have embraced the framework as part of their sustainability journey. However, the list of adopters is rapidly growing as forward-thinking firms around the world seek to gain an edge over their competitors. This adoption pattern indicates TNFD's potential to become the established benchmark for nature-related disclosures.
The four pillars of TNFD
TNFD mirrors the established TCFD structural pillars, meaning it’s easy to integrate for organisations with existing climate disclosure processes.
Governance:
This pillar addresses how board members and executives oversee nature-related risks and opportunities.
Strategy:
Here, organisations examine how biodiversity and ecosystem dependencies influence their strategic planning.
Risk and Impact Management:
This component establishes systematic processes for identifying, evaluating, and managing nature dependencies and effects.
Metrics and Targets:
The final pillar focuses on quantifiable indicators and objectives for measuring nature performance. This includes selecting appropriate biodiversity metrics and setting meaningful performance targets.
This structured approach enables organisations to leverage existing ESG reporting systems, while addressing the distinct challenges posed by nature-related disclosures.
The LEAP Approach
Building upon these four pillars, TNFD provides a structured implementation methodology called LEAP - a practical framework guiding organisations through the nature disclosure process.
Locate interactions with nature.
Evaluate how nature is impacted.
Assess nature-related risks and opportunities.
Prepare to respond to risks and opportunities, including reporting on issues in line with the TNFD Framework.
This methodical approach transforms abstract ecological concepts into useful and actionable steps.
Who should pay attention to TNFD?
Though TNFD is currently voluntary, it aligns with regulatory trends, investor expectations, and global sustainability frameworks. Financial institutions, corporations with nature-dependent supply chains, and organisations committed to sustainability disclosure should consider disclosing nature-related metrics alongside ESG metrics.
As ecological considerations gain prominence in financial decision-making, TNFD-aligned reporting will likely transition from competitive advantage to market expectation, so early preparedness could pay off in dividends.
Getting started with TNFD
The easiest way to track nature-related metrics is through specialist ESG software.
As part of our latest webinar series, we spoke to Sebastian Leape - CEO of Natcap. Natcap was founded in 2018 and the company is at the forefront of the nature intelligence space, helping firms to act on the nature metrics they gather by leveraging Natcap’s wealth of knowledge.
Our webinar features a presentation by Sebastian, providing a comprehensive overview of nature-related disclosures. KEY ESG founder Heleen Van Poecke then joins the discussion to close the webinar.
Watch our webinar here.
If you have any questions about nature-related disclosures, the TNFD, or sustainability reporting, feel free to reach out to a member of our team or request a software demo.
With global awareness of biodiversity loss and environmental degradation at an all-time high, more and more companies are adopting voluntary environmental, social, and governance (ESG) disclosures. If you're looking to strengthen your sustainability reporting, this guide will tell you everything you need to know about the Taskforce on Nature-related Financial Disclosures (TNFD).
What is the TNFD?
The Taskforce on Nature-related Financial Disclosures (TNFD) is a voluntary framework enabling businesses and financial institutions to incorporate nature considerations into their decision-making processes.
The TNFD builds on the work of the TCFD (Task Force on Climate-related Financial Disclosures), shifting the focus from climate to nature. Investors and customers have come to expect transparent reporting on how businesses affect nature and local ecosystems. The framework establishes a scientific, standardised approach for corporate nature-related communications, eliminating subjectivity and enhancing reporting credibility.
Just as greenwashing regulations seek to demystify discourse around greenhouse gases, the TNFD seeks to make ecological reporting as rigorous and certifiable as traditional financial disclosures. This means stakeholders can trust not only the framework, but the data itself.
Why TNFD matters for businesses
Traditional sustainability reporting typically centres on emissions and climate metrics, but TNFD broadens this perspective. The framework encompasses nature-related dependencies (water, soil, pollination), ecological impacts (deforestation, habitat loss), and biodiversity-related business risks that previous reporting systems have often overlooked.
Integrating TNFD into your sustainability strategy delivers several advantages:
- Transparent, standardised reporting adds substance to your sustainability credentials, strengthening investor trust.
- Identifying nature dependencies reveals previously unrecognised vulnerabilities, improving risk management while demonstrating a company’s conscientiousness.
- Revealing a commitment to biodiversity resonates with stakeholders and customers, enhancing brand reputation.
- The framework's rigorous structure also deters unsubstantiated environmental claims, helping prevent greenwashing.
TNFD has gained particular traction in Japan, where regulators and businesses have embraced the framework as part of their sustainability journey. However, the list of adopters is rapidly growing as forward-thinking firms around the world seek to gain an edge over their competitors. This adoption pattern indicates TNFD's potential to become the established benchmark for nature-related disclosures.
The four pillars of TNFD
TNFD mirrors the established TCFD structural pillars, meaning it’s easy to integrate for organisations with existing climate disclosure processes.
Governance:
This pillar addresses how board members and executives oversee nature-related risks and opportunities.
Strategy:
Here, organisations examine how biodiversity and ecosystem dependencies influence their strategic planning.
Risk and Impact Management:
This component establishes systematic processes for identifying, evaluating, and managing nature dependencies and effects.
Metrics and Targets:
The final pillar focuses on quantifiable indicators and objectives for measuring nature performance. This includes selecting appropriate biodiversity metrics and setting meaningful performance targets.
This structured approach enables organisations to leverage existing ESG reporting systems, while addressing the distinct challenges posed by nature-related disclosures.
The LEAP Approach
Building upon these four pillars, TNFD provides a structured implementation methodology called LEAP - a practical framework guiding organisations through the nature disclosure process.
Locate interactions with nature.
Evaluate how nature is impacted.
Assess nature-related risks and opportunities.
Prepare to respond to risks and opportunities, including reporting on issues in line with the TNFD Framework.
This methodical approach transforms abstract ecological concepts into useful and actionable steps.
Who should pay attention to TNFD?
Though TNFD is currently voluntary, it aligns with regulatory trends, investor expectations, and global sustainability frameworks. Financial institutions, corporations with nature-dependent supply chains, and organisations committed to sustainability disclosure should consider disclosing nature-related metrics alongside ESG metrics.
As ecological considerations gain prominence in financial decision-making, TNFD-aligned reporting will likely transition from competitive advantage to market expectation, so early preparedness could pay off in dividends.
Getting started with TNFD
The easiest way to track nature-related metrics is through specialist ESG software.
As part of our latest webinar series, we spoke to Sebastian Leape - CEO of Natcap. Natcap was founded in 2018 and the company is at the forefront of the nature intelligence space, helping firms to act on the nature metrics they gather by leveraging Natcap’s wealth of knowledge.
Our webinar features a presentation by Sebastian, providing a comprehensive overview of nature-related disclosures. KEY ESG founder Heleen Van Poecke then joins the discussion to close the webinar.
Watch our webinar here.
If you have any questions about nature-related disclosures, the TNFD, or sustainability reporting, feel free to reach out to a member of our team or request a software demo.
