The Taskforce on Nature-related Financial Disclosures (TNFD), a global market-led initiative which aims to provide financial institutions and corporates with a complete picture of their environmental risks and opportunities, has delivered its framework for organizations to report and act on evolving nature-related risks.
The TNFD recommendations provide companies and financial institutions of all sizes with a risk management and disclosure framework to identify, assess, manage and, where appropriate, disclose nature-related issues.
The 14 recommendations contained in the framework 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 (ESRS).
The recommended disclosures are structured around the same four pillars the Taskforce on Climate-related Financial Disclosure (TCFD) recommendations are structured around Governance, Strategy, Risk & impact management, and Metrics & targets:
| Governance |
Strategy |
Risk & impact management |
Metrics & targets |
| Disclose the organisation's governance of nature-related dependencies, impacts, risks and opportunities. |
Disclose the effects of nature-related dependencies, impacts, risks and opportunities on the organisation's business model, strategy and financial planning where such information is material. |
Describe the processses used by the organisation to identify, assess, prioritise and monitor nature-related dependencies, impacts, risks and opportunities. |
Disclose the metrics and targets used to assess and manage material nature-related dependencies, impacts, risks and opportunities. |
The TNFD will now encourage and support voluntary market adoption of the recommendations.
The TNFD guidance and recommendations are also relevant for small and medium-sized enterprises (SMEs). In many cases, SMEs are closer to the source of nature-related dependencies, impacts, risks and opportunities and may have fewer options to diversify their exposure or shift sourcing. Their assessment of nature-related issues will also enable them to respond to nature-related information requests from their suppliers and downstream customers. Nevertheless, the TNFD recognizes that some SMEs may need further support in applying the recommendations in a proportionate way to the size of their activities and the resources they have available. In recognition of this, the Taskforce intends to work on additional guidance for SMEs.
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.
Switzerland is advocating for the TNFD’s work to form the basis for the future International Sustainability Standards Board (ISSB) disclosure standards with regard to biodiversity. It has supported the TNFD since its creation and is represented in its Stewardship Council by the Federal Office for the Environment (FOEN) and State Secretariat for International Finance (SIF).
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