The Working Group on Nature-Related Financial Disclosures (TNFD) developed a set of recommendations and disclosure guidelines that encourage and enable companies to evaluate, report and act on their dependencies, impacts, risks and opportunities related to nature.
Recommendations and guidance will enable businesses and finance to integrate nature into decision-making. Our goal is to support a shift in global financial flows, moving away from negative outcomes for nature and towards positive outcomes for nature, aligned with the Global Framework for Biodiversity.
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There is no single way to get started with TNFD recommendations, because each organization is different and will have, therefore, your own path to adoption. But, as with every path, Taking the first step is the most important thing.
This guidance includes a set of key steps your organization should consider when getting started, and advice on how to address some of the practicalities when preparing to assess and disclose the four pillars of TNFD outreach.
Recommended disclosures for all sectors are structured around these four pillars:
- Governance
Disclose the organization's governance in relation to dependencies, impacts, risks and opportunities related to nature.
- Describe board oversight
- Describe the role of management
- Describe the organization’s human rights policies and engagement activities, as well as oversight by the board and management, with regard to Indigenous Peoples, Local Communities, affected and other interested parties, in assessing and responding to dependencies, impacts and risks related to nature and opportunities.
- Strategy
Disclose the effects of addictions, impacts, risks and opportunities related to nature in the business model, organization's financial strategy and planning, whenever such information is material.
- Describe the dependencies, impacts, nature-related risks and opportunities that the organization has identified in the short, medium and long term.
- Describe the effect on the business model, in the value chain, in the organization's strategy and financial planning, as well as any transition plans or reviews in place.
- Describe the resilience of the organization's strategy to nature-related risks and opportunities, taking into account different scenarios.
- Risk and impact management
Understand the process used by the organization to identify, to assess, prioritize and monitor dependencies, impacts, risks and opportunities related to nature.
- Describe the organization's processes related to nature in(s) your(s) chain(s) of value upstream and downstream.
- Describe the organization's processes to monitor.
- Describe how identification processes, assessment, prioritization and monitoring of nature-related risks are integrated into and inform the organization's overall risk management processes.
- Metrics and goals
Disclose the metrics and goals used to evaluate and manage dependencies, impacts, material risks and opportunities related to nature.
- Disclose the metrics used by the organization to assess and manage material risks and opportunities related to nature, in line with your risk management strategy and process.
- Disclose the metrics used by the organization to assess and manage dependencies and impacts on nature.
- Describe the goals and objectives used by the organization and its performance in relation to these.
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Seven key steps to get started and increase your TNFD outreach ambition over time
Key focus areas
- The importance of health and nature’s resilience for societies, savings, business and finance
- An Introduction to Understanding Nature and Business
- Draft TNFD disclosure framework
- Conceptual foundations and general requirements for nature-related disclosures
- 14 recommended disclosures
- Metrics architecture overview and recommended set of outreach metrics
Main results
- Importance of nature and its biodiversity for business and finance
- Suitability of TNFD recommendations for organizations of all sizes, sectors and value chains
- How the TNFD recommendations can help business and financial institutions integrate nature-related issues into decision-making, risk management and disclosures
Why adopt the TNFD recommendations
With the degradation of nature, actions aimed at conservation, restoration and use sustainably, the significant risks and opportunities for business, finance and society, both now and in the future must be considered. Despite its economic and financial importance, Few organizations have systematically evaluated and disclosed their issues related to the nature (dependencies, impacts, risks and opportunities). In the past, This was largely due to the lack of requirements from governments and market regulators and the limited availability and understanding of tools, metrics and data. Nonetheless, both are changing rapidly.
Corporate reporting on nature-related issues is evolving at a rapid pace. Several jurisdictions have – or are developing – nature-related reporting standards and regulations. The TNFD recommendations provide a voluntary way for organizations to publicize their nature-related issues, consistent with the global scenario in the baseline for sustainability reporting, existing and emerging regulatory requirements and in response to increasing investor demands for more information on these issues.
The tools overview, metrics and data related to nature is also advancing, partly driven by improvements in technologies and techniques. In pilot testing, the TNFD framework showed that, despite challenges with nature-related data, Organizations can start with identifying and evaluating related issues using the datasets and analysis tools available today. How these data challenges continue to be addressed, more tools, metrics and data will emerge.
The TNFD has developed a set of additional practical recommendations and guidance to implement and encourage widespread adoption. The Working Group's recommendations are based on extensive market consultations and pilot testing over a two-year period. Organizations that tested the draft TNFD framework highlighted its effectiveness and now intend to make nature-related disclosures standard.
Where to start
The TNFD recognizes that building an understanding of the importance of nature-related issues in an organization, gathering the necessary information and carrying out relevant analyzes, It will take time and resources. Whether in relation to the climate, to modern work, cybersecurity or other risk vectors, Organizations are familiar with the need to adapt and evolve their risk management and corporate reporting, processes as new issues and challenges arise.
As organizations begin their path to adopting TNFD and nature-related issues move into mainstream reporting, practices and techniques will evolve quickly. These improvements, including data and analytics, will support the assessment of nature-related issues and support increasing the quality of the scope of disclosures.
How to interact with TNFD
There are several ways to get involved, from signing up to the mailing list to receive the latest news and developments, until joining the Forum TNFD, Community of Practice or register your intention to adopt the TNFD Recommendations.
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