The Taskforce on Nature-related Financial Disclosures published its final beta disclosure framework on 28 March 2023. Irina Velkova looks at the framework’s goals, and the implications for financial services firms.

The Taskforce on Nature-related Financial Disclosures (TNFD) has developed a risk management and disclosure framework for organisations to report and act on nature-related risks. It aims to help organisations of every size, across every sector that interacts with nature and participate in global supply chains and the financial system.

What is the TNFD framework?

Encouraging investment towards nature-positive outcomes, the TNFD ultimately aims to tackle nature and biodiversity loss. Disclosure elements will improve transparency and accountability, while creating a comparable framework for companies that legally need to disclose information to regulators or other stakeholders. Most importantly, TNFD will make it easier for investors to identify the companies that align with their values and reduce the risk of greenwashing.

The TNFD framework consists of three elements:

1 A summary of the concepts and definitions that market participants can use to assess and disclose nature-related issues

2 Guidance for financial institutions and corporates to assess nature-related issues and incorporate them into their enterprise strategy and risk management processes – this will help with capital allocation using the LEAP approach

3 The TNFD’s recommended disclosures for nature-related issues

How does the TNFD compare to the Task Force on Climate-related Disclosures?

With comparable themes, language, and structure to the Task Force on Climate-related Financial Disclosures (TCFD), the TNFD framework will feel familiar to the financial sector – albeit with different goals. While the TCFD focuses on the financial impact of climate change, the TNFD looks at the financial impact of nature-related changes and how to direct finances towards nature-positive outcomes.

To encourage early adoption, the TNFD uses the same four disclosures categories as the TCFD, alongside other general cross-cutting general disclosure requirements. It also draws from, and feeds into, pre-existing frameworks, such as the International Sustainability Standards Board (ISSB), the Global Reporting Initiative (GRI) and the European Financial Reporting Advisory Group (EFRAG) among others. Using pre-existing tools, definitions and metrics, the TNFD aims to create a coherent global framework for nature-related risk management and disclosure.

Disclosure recommendations

Overall, TNFD carried over all 11 TCFD Recommended disclosures into the new framework and describes the link between the value chain to nature as: direct operations, upstream, downstream and financed. It has also given additional guidance on the use of scenario analysis, including tools and templates, to inform strategy and improve resilience over key topics that are specific to nature.

The TNFD framework also recommends that corporates applying nature-related targets should use science-based targets such as those created by the cross-sector Science Based Targets Network (SBTN). As best practice, these should include both qualitative and quantitative metrics that align with TNFD and other global policies or approaches, such as the Global Biodiversity Framework’s monitoring framework.


The TNFD disclosures guidelines


Firms must disclose how they are governing nature-related dependencies, risks, impacts, and opportunities.

Recommended disclosures include descriptions of how the board and management oversee risks, opportunities and impacts relating to nature-related dependencies.


Firms must disclose risks and opportunities relating to nature-related dependencies, and how they materially affect the strategy, business and financial planning.  

Recommended disclosures include descriptions of the above in the short, medium and long-term; their effect on strategy, business and financial planning; notes on strategic resilience regarding nature-related dependencies; any specific activities or assets that are in priority areas.

Risk and impact management

Firms must disclose how to they identify, assess and manage nature-related dependencies, risks, impacts and opportunities.  

Recommended disclosures include:

  • Processes to identify and assess the impact of the above on direct operations, the wider value-chain and any financed activities or assets

  • Actions the firm has taken to manage the above

  • How nature-related risk and impact management is integrated into the wider risk management approach

  • Details of how affected stakeholders help assess and manage nature-related dependencies risks, opportunities, dependencies and impacts

Metrics and targets

Firms must disclose their metrics and targets used to assess material nature-related dependencies, risks, opportunities and impacts.

Recommended disclosures include the metrics used to review and manage nature-related risks and opportunities for the firm, and its impacts on nature. Firms must also describe the targets and goals used, and their performance against them.

Adopting the framework

The TNFD’s recent publication is the fourth and final beta version of the Nature-Related Risk and Opportunity Management and Disclosure Framework. The framework will be issued formally for market adoption in September 2023. Participation is voluntary, but the TCFD was also initially voluntary, and has since been made mandatory in the UK as key element of the disclosure landscape. Early adoption will help firms support good nature-related outcomes, meet stakeholder expectations, and stay ahead of regulatory compliance.

For more insight and guidance, get in touch with Irina Velkova.

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