The Taskforce on Nature-related Financial Disclosures has published its final recommendations for nature-related risk management and disclosure.

Guidance has also been released to help market participants with integrated assessment and corporate reporting related to nature. The TNFD says the recommendations aim to inform better decision making by companies and capital providers and contribute to a shift in global financial flows toward nature-positive outcomes and the goals of the Kunming-Montreal Global Biodiversity Framework.

The recommendations build on those of the Task Force on Climate-related Financial Disclosures (TCFD) and are consistent with the global sustainability standards of the International Sustainability Standards Board (ISSB) and the impact materiality approach used by the Global Reporting Initiative (GRI) and incorporated into the new European Sustainability Reporting Standards. The recommendations are also aligned with the requirement of Target 15 of the Global Biodiversity Framework for corporate reporting which calls for assessment and disclosure of nature-related risks, impacts, and dependencies, enabling companies to now align their corporate reporting with global policy goals as they are now doing on climate related issues.

David Craig, Co-Chair of the TNFD and founder and former CEO of Refinitiv says, “Nature loss is accelerating, and businesses today are inadequately accounting for nature-related dependencies, impacts, risks and opportunities. Nature-risk is sitting in company cash flows and capital portfolios today. The costs of inaction are mounting quickly. Businesses and financial institutions now have the tools they need to take action. 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.”

The TNFD will now encourage and support voluntary market adoption of the recommendations. Following the example of the TCFD, the TNFD will track voluntary market adoption on an annual basis through an annual status update report beginning in 2024. The TNFD is anticipating companies to start announcing their intention to adopt the recommendations from as early as this week.

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