Nature meets business: What does the TNFD mean for the private sector?
The Taskforce on Nature-related Financial Disclosures (TNFD) unveiled its long-awaited finalised recommendations to improve nature-related disclosure earlier this month. The key question now is how will these recommendations affect businesses and what implications will they have?
“We don’t have a choice. We simply do not have a choice. We are running out of time and the idea that there is an optionality about this feels quite frankly ludicrous.”
Those words of warning come from WWF UK’s chief executive Tanya Steele, speaking at the UK launch of TNFD recommendations, hosted by the Green Finance Institute (GFI) in collaboration with The Royal Society.
After two years of design and development, the TNFD unveiled its 14 recommended disclosures and a suite of additional implementation guidance at Climate Week NYC on 18 September. The introduction of this suite of recommendations looks set to change how businesses view, integrate and report on nature for the foreseeable future.
What is TNFD and what does it aim to do?
The TNFD recommendations intend to mitigate the industrial impact on nature by encouraging comprehensive reporting on businesses’ environmental footprint and properly integrating nature-related considerations in their strategies.
The 14 reporting recommendations that have been introduced encompass guidelines for revealing nature-related impacts, risks, and dependencies throughout the entire value chain. Similar to the framework presented by the Taskforce on Climate-Related Financial Disclosures (TCFD), these recommendations involve assessing risk in a range of future scenarios.
TNFD’s co-chair David Craig explains the need for such a framework. “There is no prosperity and certainly no flow of funds in a dead planet,” he says.
“TNFD is a vital tool but it’s not enough to make the change. It’s one of the important things that we can do, but also importantly we need to change our mindsets. Addressing climate change is of course critical, but it’s only one of the five drivers. The other four drivers include how we use land and oceans, how we extract resources, the pollutants we produce, and how we encourage invasive species.
“We won’t get anywhere with a climate-now and nature-later response to how we address climate change.”
Nature loss poses risks to more than half of the world’s total GDP, which amounts to $44trn. Nonetheless, the annual undisclosed cost associated with the global economy’s exploitation of nature, including aspects such as greenhouse gas emissions (GHG), water and land use, exploitation of wild species, pollution, and waste, is estimated to be roughly 13% of the global GDP.
Two years after the UK Government made its commitment to the global ’30×30′ target, which aimed to protect a minimum of 30% of land and sea for nature by 2030, research reveals that only 6.5% of the land in England is currently protected in ways that can count towards the 30% target, which has a 2030 deadline.
With only seven harvests left to reach these goals, it is clear that businesses will have a key role to play in protecting and restoring the planet.
How will TNFD change business?
It is anticipated that pioneering companies will soon announce their intentions to commence reporting according to the framework in the coming days and weeks. GSK has already declared its plan to issue its first TNFD-compliant report in 2026, based on data from 2025.
Several enterprises, such as Natura &Co, Holcim, and Reckitt, have already been testing TNFD implementation privately through a series of beta versions.
Reckitt has been using the TNFD framework to guide its sustainability efforts, focusing on latex sourcing for Durex condoms from Surat Thani, Thailand. It has assessed the impact on local forests and species and has partnered with Earthworm Foundation, local farmers, and governments to mitigate nature-related risks and impacts. Reckitt has set aims to set economically viable targets that benefit climate, biodiversity, and society in the region.
Reckitt’s head of sustainability David Croft, speaking at the launch event, explains how the framework is already informing business decisions.
“By looking at the framework that TNFD creates, we can make sense of many complex issues while also making them actionable. Actionable is the key point here. That is why, at Reckitt, we began to work with partners and farmers on the ground in Southeast Asia looking at our Latex supply chain, which is very significant for our business,” Croft says.
“We are starting to find ways to reduce nature-related risks, reduce the footprint that our business has, but also in the way that connects nature, climate and the communities. The TNFD framework allows you to do all that together. Joining those three is important for a sustainable and resilient future environment.”
While a few leading companies have begun reporting their impacts and risks related to nature, the majority of the business sector is yet to catch up.
Earlier this year, CDP announced that 18,600 companies provided climate-related data last year, marking a 42% year-on-year growth. However, fewer than half of these companies reported on biodiversity, and only 1,000 included information on forests.
In 2021, approximately 7,700 companies reported using CDP’s biodiversity platform, which accounts for only 41% of the number of companies reporting through its climate platform.
How will TNFD mobilise nature finance?
According to estimates from the GFI, the projected public expenditure on nature conservation and restoration in the UK from 2022 to 2032 falls significantly short, with a deficit of up to £97bn required to fulfil the commitments made by both the UK Government and devolved administrations.
The Secretary of State for Environment, Food and Rural Affairs Therese Coffey says: “It’s impossible to do this simply using tax-based money, and that’s why we need investors, businesses, and banks to invest more and to align their portfolios actively with nature’s recovery.”
As for the upcoming actions for banks concerning the TNFD, Barclays’ chief executive C. S. Venkatakrishnan notes: “In terms of TNFD recommendations, banks have to start studying the output procedures and business structures, and we have to start integrating it into our frameworks.
“Another very critical part of banking is the standardisation of the way in which you assess risks and opportunities, so that all banks, agencies and individuals have standardised forms of talking about their exposure to nature and their dependency upon it.”
Banks are increasingly ramping up engagement processes on nature, with some of the world’s biggest targets in their crosshairs. This week, a global collective of investors representing $23.6trn in assets under management, agreed to engage with 100 companies worth $9trn in market capital to improve approaches to nature.
Consequently, should banks and financial institutions synchronise their strategies and portfolios with the restoration of nature, it will additionally incentivise businesses to integrate nature into their corporate decisions and strategies.
This guidance from investors is welcome; corporates have long called for engagement and disclosure requirements on nature. The key question is whether these new voluntary requirements add to an ever-mounting list of sustainability reporting frameworks.
How does TNFD relate to TCFD?
Beyond the access to potential markets and revenue streams, the TNFD framework’s structure offers another advantage to businesses, simplifying its integration.
The TNFD follows the same structure as the TCFD, which according to the TNFD’s technical director Emily McKenzie, “is to make it easier to build on what businesses have already done for climate and to encourage an integrated approach which is something the Taskforce feels is very important.”
However, the TNFD framework has introduced three new disclosures. The first pertains to engagement, emphasising the significance of meaningful engagement with effective stakeholders, including indigenous people and communities, for both assessment and disclosure.
The second centres on the interplay with priority locations, acknowledging that nature-related issues can vary by location, with certain ecologically sensitive areas posing heightened risks. The third new disclosure is dedicated to value chains, as the Taskforce acknowledges the complexity of data-related challenges when examining upstream and downstream aspects, much like the complexities encountered in Scope 3 reporting.
Will TNFD become mandatory?
While businesses will initially adopt the framework voluntarily, there is a possibility that the Royal Society and other TNFD members may advocate for a mandate, similar to the TCFD precedent, which now requires that many large UK businesses disclose climate-related data alongside traditional financial filings.
The Royal Society president Sir Adrian Smith says: “At the last biodiversity conference of parties, there was much discussion about if business disclosure on nature-related risks would be mandatory.
“In the end, with a voluntary approach it was agreed that businesses should not pause and wait for policymakers to tell them what they need to do to manage these risks.” Smith adds that those involved in the development of the recommendations will continue to advocate for its uptake.
It is hoped that while the government has pushed back on its net-zero commitments, the business sector will remain steadfast in pursuing the net-zero pathway, which necessitates parallel commitments to both climate and nature preservation.
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