Financial reporting on a complex web of nature-related impacts is a step up from climate impact reporting, but the TNFD believes its framework will enable organisations to get the ball rolling.
The Taskforce on Nature-related Financial Disclosures (TNFD) released its final recommendations this week, providing a framework which it hopes will underpin company reporting on nature-related issues in a similar way to those already rolled out for climate change impacts.
In its publication, the TNFD provides 14 recommended disclosures and outlines additional implementation guidance, arrived at after a consultative development process, which included pilot tests by more than 200 companies and financial institutions.
Other material published includes guidance on identifying and assessing nature-related issues (the so-called LEAP approach), as well as specific sector guidance, biome guidance , scenario analysis, target setting and guidance on engagement with indigenous peoples and local communities.
The material aims to inform better decision-making by companies and capital providers, and contribute to a shift in global financial flows toward nature-positive outcomes, reaching the goals of the Kunming-Montreal Global Biodiversity Framework (KMGBF), agreed at the biodiversity COP15 meeting in December 2022.
The taskforce, which was launched in June 2021, comprises a working group of 40 executives from financial institutions, corporates and market service providers, with combined assets of over $20trn. Its work is also informed by partners from science, standards, and data bodies and a group of over 1,200 organisations who support it as members of the TNFD Forum.
Consistency with existing standards
Stress has been placed on compatibility and consistency with existing sustainability reporting standards such as those produced by the International Sustainability Standards Board (ISSB) and the Global Reporting Initiative (GRI), as well as those in the new European Sustainability Reporting Standards. The idea is to make the TNFD guidance usable by reporting organisations across jurisdictions that have differing approaches to materiality.
The guidance also covers measures addressed under Target 15 of the KMGBF, which calls for governments to introduce requirements enabling assessment and disclosure of risks dependencies and impacts in organisations’ supply and value chains, and portfolios, as well as their own operations.
In an effort to make uptake easier, the TNFD recommendations draw on the existing framework developed by the Task Force on Climate-related Financial Disclosures (TCFD), which is already a point of reference for many organisations. Both use the same four conceptual pillars: governance, strategy, risk and impact management, and metrics and targets.
TNFD leaders are well aware that processing the relatively limited number of metrics required for many aspects of climate change reporting has proved challenging, especially when those produced across an organisation’s value chain are included. But they are keen to stress they have sought to keep the process of measuring the myriad ways we impact on nature and biodiversity as simple as possible.
“Nature is highly complicated, but we don’t need to make this approach complex,” David Craig, co-chair of the TFND told a launch webinar. He said the TNFD recommendations were a tool set designed by and for the market that used a risk assessment and disclosure approach that made them simple enough to use, while still being scientifically robust. He described them as “pragmatic in terms of assessing dependencies, impacts risks and opportunities”.
Craig called for organisations not to consider nature-related reporting as a compliance or CSR challenge, but as an opportunity to embed strategic risk management into their business.
The taskforce said it had received 3,000 pieces of feedback from the market, scientific institutions, policymakers and regulators, NGOs and others across four successive releases of prototype version of the framework, before arriving at its final structure. One piece of advice it received was to provide a start-up guide to help would-be users faced with the challenge of incorporating nature-related reporting alongside their other reporting requirements to get the process rolling – something which it has now produced.
Tailored guidance for financial institutions
In an acknowledgment of the differing challenges in nature-related reporting facing different market segments and locations around the world, the TNFD has also published cross-sector guidance, and also plans to publish advice on nature-related reporting for various sectors. That for financial institutions has just been published.
We’re not letting the perfect be the enemy of the good. We don’t want to have financial institutions sitting on the sidelines waiting for perfect data from all of their clients and customers. So, we’ve tried to come up with an approach which gets people moving,” Tony Goldner, the TNFD’s executive director told the launch webinar. “As the data improves over time, they’ll then be able to expand their reporting against some of the other core metrics.”
Having produced the framework, the TFND now needs to persuade organisations to adopt its approach, which remains a voluntary process, though the hope is that governments will use the framework as a basis to make reporting mandatory, as some have already done with the TCFD framework on climate reporting.
In the meantime, the TNFD is able to point to some early adopters. Multinational pharma company GSK has said it is committed to publishing its first TNFD disclosures in 2026, based on 2025 data, according to TFND. A survey of the taskforce‘s 1,200 forum members showed 80% saying they intended to start nature-based reporting using data from financial year 2025 outcomes or earlier.
TFND is asking more organisations to signal their intentions in coming weeks, and plans to release a list of those that have said they will start adopting the recommendations at the World Economic Forum in Davos in January 2024. The TNFD will also follow the example of the TCFD by tracking voluntary market adoption through an annual status update report, beginning in 2024.