18 September 2023

TNFD up and running

The Taskforce on Nature-Related Financial Disclosures (TNFD) has launched its voluntary biodiversity disclosure framework at an event in New York today (18 September) after two years of development and pilot testing.

The TNFD framework is made up of 14 disclosure recommendations, divided into the same four categories as its 'sister' TCFD framework, namely: Governance, Strategy, Risk and impact management and Metrics and Targets.

In an attempt to build on TCFD recommendations and encourage integrated climate and nature reporting, the TNFD framework has also carried over all 11 of the TCFD recommended disclosures and changed the language to make them relevant for biodiversity.

David Craig, TNFD co-chair and founder, said: "Building on the language, structure and approach of the TCFD and consistent with the ISSB's sustainability reporting baseline, the adoption of the TNFD recommendations represent a step-change in the momentum and capacity for business and finance to identify, assess and disclose their exposure to nature-related issues in a manner consistent with climate-related-reporting."

On top of the TCFD-based disclosures, the framework recommends three additional disclosures which cover ecologically sensitive locations, affected stakeholders, value chains and engagement with indigenous communities.

Whereas TCFD was based on the Paris agreement, TNFD is based on the Global Biodiversity Framework (GBF) agreed at the COP 15 Biodiversity conference in Montral last December. The GBF included a commitment to introducing nature-related disclosures and was agreed to by over 200 countries.

The disclosures can be applied with a financial materiality lens or a double materiality lens, they have been deemed to be consistent with the GRI and EU's own respective biodiversity standards, whilst the ISSB has said it will consider the framework if it starts developing its own standard on nature.

Alongside the framework itself, the TNFD has published additional guidance on the metrics needed to fulfil the 14 recommended disclosures.

These metrics have been sourced from the GRI and SASB standards, the ESRS and the CDP disclosure platform, amongst others, and are broken up into three categories: 'Core Global metrics' and 'Core Sector' metrics which both 'comply or explain' for adopters and 'Additional metrics' which are to be disclosed where relevant and decision-useful.

While not required for disclosing under TNFD framework, the additional guidance also recommends the four-step 'LEAP' approach to assessing and disclosing nature-related information: Locate the interface with nature, Evaluate dependencies, Assess risks and opportunities and then Prepare to respond and report.

This approach is based on feedback from the field testing of the framework at 240 organisations. One such entity was British pharmaceuticals company, GSK, which has already committed to release its first TNFD report in 2026 based on 2025 data.

GSK sustainability VP Claire Lund said the 'LEAP' approach gave the company a "deeper understanding of the dimensions of its impacts and dependencies" and, crucially, allowed it to better assess its impact on biodiversity and ecosystems in specific locations.

TNFD has encouraged other early voluntary adopters of its framework and Craig said he expects many to follow GSK in committing to do so in the next week.

One concern over TNFD adoption and disclosures on nature more generally is the lack of accessible and comparable data on biodiversity. The TNFD taskforce has launched the Data Catalyst which is tasked with finding global-scale solutions to the issues around nature-related data.

At the launch event, Craig told Corporate Disclosures that the work to address this issue of availability remained a "work in progress".

"A lot of our pilot testers found the data available but they recognized that there were gaps and we have consistently heard 'how do we make it more accessible and more connected?' I think that will come over time, we're early stages so we can't say this is solved, it is work in progress but it is not a barrier," he said.

Alongside the work around data availability, in the coming weeks, TNFD will develop additional technical guidance on sectors, biomes and transition plans and support implementation through capacity building, training and education on the disclosure recommendations.