TNFD: Nature-Related Financial Disclosure

Overview

The Taskforce on Nature-related Financial Disclosures (TNFD) is a global framework for organizations to report and act on evolving nature-related risks. Following the TCFD model, TNFD provides a structure for disclosing nature-related dependencies, impacts, risks, and opportunities.

What Is TNFD?

Background

• Launched: 2021 by Global Canopy, UNDP, and WWF
• Full framework: Released 2023
• Adoption: Growing global momentum

Core Framework

The TNFD framework uses the LEAP approach:

• Locate: Interface with nature
• Evaluate: Dependencies and impacts
• Assess: Risks and opportunities
• Prepare: Respond and disclose

Nature-Related Risks

Dependencies

What your business relies on from nature:

• Provisioning services: Water, food, raw materials
• Regulating services: Climate regulation, flood control
• Cultural services: Recreation, tourism
• Supporting services: Soil formation, nutrient cycling

Impacts

How your business affects nature:

• Land use change: Deforestation, habitat conversion
• Pollution: Water, soil, air contamination
• Resource extraction: Mining, logging, water withdrawal
• Climate change: GHG emissions affecting nature

Risk Categories

LEAP Framework Implementation

Phase 1: Locate

1. Map operational boundaries: Facilities, operations
2. Identify interfaces: Where you interact with nature
3. Use spatial data: IBAT, ENCORE, national databases

Phase 2: Evaluate

1. Assess dependencies: Which ecosystem services do you use?
2. Measure impacts: How do your activities affect nature?
3. Use tools: ENCORE, biodiversity impact calculators

Phase 3: Assess

1. Identify risks: Connect dependencies/impacts to risks
2. Materiality assessment: Which risks are significant?
3. Scenario analysis: Test against different futures

Phase 4: Prepare

1. Set targets: Science-based nature targets
2. Develop strategy: Mitigation hierarchy
3. Disclose: TNFD-aligned reporting

Disclosure Requirements

Governance

• Board oversight of nature-related issues
• Management's role in assessment and response

Strategy

• Nature-related risks and opportunities
• Business model impacts
• Strategy and resource allocation

Risk Management

• Risk identification processes
• Assessment and prioritization
• Integration with enterprise risk

Metrics & Targets

• Metrics aligned with nature-positive goals
• Targets and progress tracking
• Disclosure frameworks: GRI, SASB, CSRD

Science-Based Targets for Nature

Science Based Targets Network (SBTN)

Developing targets for:

• Freshwater: Water quality and quantity
• Land: Ecosystem conversion
• Oceans: Marine and coastal systems
• Biodiversity: Species and ecosystems

Target-Setting Process

1. Assess: Evaluate current state
2. Interpret: Identify material issues
3. Set: Define science-based targets
4. Act: Implement changes
5. Track: Monitor and report

Practical Guidance

For Companies

1. Start now: Begin nature risk assessment
2. Use available tools: ENCORE, IBAT, SBTN
3. Engage stakeholders: Supply chain, communities
4. Set targets: Move toward nature-positive
5. Disclose: TNFD-aligned reporting

Tools and Resources

• ENCORE: Nature dependency mapping
• IBAT: Biodiversity data
• SBTN: Target-setting guidance
• CDP: Water and forest questionnaires

Key Takeaways

• TNFD provides framework for nature-related disclosure
• Nature loss is material financial risk
• LEAP approach guides assessment
• Moving toward nature-positive is essential
• Growing regulatory and investor expectations
• Integration with TCFD and climate strategies needed

References

• TNFD · SBTN · IPBES · CBD — nature and biodiversity frameworks