The Taskforce on Nature-related Financial Disclosures (TNFD) presents a new frontier for how companies assess, manage, and report on nature-related risks and opportunities.
With nature loss accelerating globally, regulators, investors, and consumers are demanding more accountability and transparency from businesses on their nature impacts. The TNFD framework provides best-practice guidance for improved risk management and disclosure. More importantly, the intent of TNFD is not just improved disclosure – but to transform our economy to deliver nature-positive outcomes through good governance, responsible practices, transparency and collective action.
Brief Overview of TNFD
The TNFD takes a similar approach to climate-related reporting introduced by the Taskforce on Climate-related Financial Disclosures (TCFD). At a high-level, the draft TNFD framework is structured around four pillars: Governance; Strategy; Risk Management; and Metrics & Targets. Underpinning these pillars is the LEAP framework, which provides guidance on assessing nature-related risks and opportunities: Locate; Evaluate; Assess; and Prepare.
The LEAP approach helps companies holistically evaluate their relationship with nature across operations, supply chains, and financial planning. Overall, the TNFD and LEAP framework aim to enable improved risk management and more robust nature-related disclosures.
While the transition may seem daunting, taking a systematic approach to address nature-related risks and opportunities will set businesses up in the best possible way now to prepare for future regulations, while ensuring their sustainable future.
New Technologies for Nature Reporting
New technologies are also emerging to simplify and improve responses to new nature reporting requirements. Emerging technologies like environmental DNA (eDNA) sampling and earth observation (EO) data provide standardised biodiversity metrics that can be monitored over time to assess performance against targets.
For example, eDNA surveys can measure changes in species diversity and abundance, while EO data can track indicators like vegetation health and land use change. Using eDNA and EO as consistent monitoring approaches enables companies to gather the quantitative evidence needed to determine if targets for improving ecosystem health and biodiversity are being met. With rigorous data collection methodologies in place, companies can feel confident that target achievements are based on solid science
The transition to a nature-positive economy is complex but necessary. By taking a systematic approach – and getting started now – companies can effectively assess dependencies and impacts, set strategic priorities, and demonstrate progress to stakeholders.
“The time is now for organisations to get ahead of the curve on their approach to nature. In such a fast-moving landscape, businesses need support to build robust frameworks to meet impending nature reporting requirements. Investing in a robust nature positive strategy now will enable the formation of sustainable business models, while supporting the development of a green economy”, comments Pippa Howard, Chief Nature Strategist at NatureMetrics.
The next chapter of environmental transparency and performance has arrived.
Want to learn more about how nature intelligence will transform your approach to TNFD? Download our TNFD guide today.