Taskforce on Nature-related Financial Disclosures (TNFD)

The TNFD aims to develop and deliver a risk management and disclosure framework for organisations to report and act on evolving nature-related risks. The goal is to support a shift in global financial flows away from nature-negative outcomes and towards nature-positive outcomes. The TNFD encourages companies to identify the risks of biodiversity and ecosystem degradation and consider them regarding investment decisions.

The TNFD’s approach builds upon the work of existing standards bodies, such as the GRI and CDP, as well as the CDSB, SASB and Value Reporting Foundation, now part of the ISSB.

Principles

The TNFD’s work builds on seven principles:

1. Market usability: develop frameworks directly useable and valuable to stakeholders;

2. Science-based: follow a scientifically anchored approach;

3. Nature-related risks: embrace nature-related risks including immediate, material financial and societal risks;

4. Purpose-driven: actively target reducing risks and increasing nature-positive action;

5. Integrated & adaptive: build effective measurement and reporting frameworks;

6. Climate-nature nexus: employ an integrated approach to climate- and nature-related risks; and

7. Globally inclusive: ensure the framework and approach are relevant, just, valuable, accessible, and affordable worldwide, including emerging and developed markets.

TNFD reporting

The first version of the TNFD Nature-Related Risk and Opportunity Management and Disclosure Framework (TNFD Framework) was published in March 2022, followed by the second version in June 2022. A further two iterations are planned in November 2022 (v0.3) and February 2023 (v0.4), before the official release of the final framework in September 2023.

The disclosure framework in the TNFD draft is developed similar to the TCFD. If the final version will not be changed drastically, it means businesses that already report under the TCFD can report similar to the TNFD disclosure. In line with the TCFD, the TNFD disclosure recommendations are based on four pillars:

1. Governance

2. Strategy

3. Risk Management

4. Metrics & Targets

The specific metrics are still in the process of being developed.

The TNFD recommends a comprehensive assessment of dependencies and impacts of a firm on nature*. This requires an assessment of impact drivers, changes to the state of nature, and the state of, and changes in, ecosystem services.

The disclosures will include information that informs the assessment of stocks of natural capital (i.e., natural resources that combine to yield a flow of benefits to people), flows of ecosystem services and the value of nature to society and business. 

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* The TNFD defines nature as a construct of four realms – Land, Ocean, Freshwater and Atmosphere.