After two years of discussion, The Taskforce on Nature-related Financial Disclosures (TNFD) has published its final recommendations for a nature-related disclosures framework – a move which is likely to have big implications for institutional investors.
The TNFD has two aims: to inform better decision making by companies and investors; and contribute to a shift in global financial flows toward nature-positive outcomes.
The initiative has strong support. It is led by 40 members which collectively have more than $20trn (£16trn) of assets under management. It also has the support of stakeholders from almost 60 countries.
The introduction of the TNFD’s 14 disclosures, along with its implementation guidance, comes at a time of rapidly growing global interest in nature and biodiversity issues.
Policymakers, regulators, asset owners, investment managers and corporates are, as witnessed at events hosted by portfolio institutional, particularly our ESG Club Conference in September, increasing their focus on nature-related risks.
A big and vitally important factor within that is the necessity of mobilising finance to tackle nature loss and scale-up nature-based strategies.
The costs of inaction
The TFND’s recommendations build on those of the Task Force on Climate-related Financial Disclosures (TCFD). They are also “consistent with the global sustainability standards of the International Sustainability Standards Board” and the “impact materiality” approach used by the Global Reporting Initiative and incorporated into the European Sustainability Reporting Standards.
This, says the TNFD, provides organisations with nature-related guidance that enables their reporting requirements across jurisdictions with the different approaches to materiality now in use.
On the impetus behind the disclosures and framework, David Craig, co-chair of the TNFD, said: “Nature loss is accelerating, and businesses today are inadequately accounting for nature-related dependencies, impacts, risks and opportunities.
“Nature-risk is sitting in company cashflows and capital portfolios today,” he adds. “The costs of inaction are mounting quickly. Businesses and financial institutions now have the tools they need to take action.”
Emma Latham-Jones, senior manager at responsible investment campaigner ShareAction, applauded the initiative. “The new TNFD framework is a crucial step in the right direction towards protecting our planet’s nature and biodiversity.”
She does, though, have some concerns. “Chief among them is the lack of data standardisation that would allow information about biodiversity to be compared effectively between financial institutions,” Latham-Jones said.
“We urge the business and finance sectors to incorporate the new framework into their decision-making process,” she added.
Aligned reporting
The TNFD recommendations align 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. This would enable companies to align their corporate reporting with global policy goals, as they are doing on climate-related issues.
Following the example of the TCFD, the TNFD will track voluntary market adoption annually through a status update report beginning next year.
David Willans, sustainability director at corporate communications consultancy Bladonmore, has been following the issue with interest and believes the outcome is positive. “The guidelines do the herculean task of setting out how to understand the relationship between nature and a business. This gives communicators the facts to communicate in engaging ways, over and above ticking the disclosure boxes,” he said.
Echoing a similar point, Elizabeth Mrema, co-chair of the TNFD, highlighted how nature-related risk management has risen up the ladder of importance for investors. “Business as usual is no longer an option and business and finance can no longer consider nature and biodiversity as just a corporate social responsibility issue. It is now squarely a central and strategic risk management issue,” she said.
Fast evolving
But Willans added that challenges remain. “Corporates and investors alike have to recognise that this is an entirely new, fast-evolving field. Smart investors will. And they will expect companies to be transparent about what’s not yet been done as much as what has. For some companies that’s going to be hard because they’re worried about the optics, but not doing it carries much greater risks,” he said.
Pharmaceutical behemoth GSK has been first to rise to the challenge. It is to publish its first TNFD disclosures from 2026, based on 2025 data. TNFD expects other companies to follow its lead.
The TNFD also plans to announce an inaugural list of its adopters – companies that have indicated their intention to start adopting the recommendations – at the World Economic Forum at Davos in January.
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