The Taskforce on Nature-related Financial Disclosures (TNFD) published its final recommendations and guidance in September 2023. But what are the benefits of adopting the TNFD framework and how does it align with other, existing frameworks?
What is the TNFD?
The TNFD is a global initiative that provides organisations with a framework to report and act on their impacts and dependencies on nature. Like the Taskforce for Climate-related Financial Disclosures (TCFD), now the world’s eminent climate reporting framework, the TNFD is based on four pillars: governance, strategy, risk management, and metrics and targets. Similar to the TCFD, the framework can be used by organisations across industries and jurisdictions, regardless of size.
How does the TNFD align with the TCFD
Although the TNFD and TCFD are comparable in many respects, they also have some distinctions. The TCFD only deals with disclosing the risks and opportunities related to climate change, as its name implies. The TNFD, on the other hand, recommends that companies integrate climate, biodiversity and nature-loss disclosures, thereby supplementing the existing climate disclosures of companies.
Risks and opportunities
The natural environment is under unprecedented pressure from human activities. This poses significant risks to businesses, such as disruptions in supply chains and regulatory changes. The TNFD framework can help businesses assess how nature impacts its performance, resilience, and value creation and ensure they include nature-related factors in strategy and risk management. This can help identify opportunities as well as risks.
Should my company adopt the TNFD framework?
The TNFD framework is not currently mandatory, but it is likely to become the default standard for nature-related reporting in the near future. In its 2023 Green Strategy paper, the UK government expressed support for the TNFD and committed to exploring how the framework should be incorporated into UK policy and legislative architecture in line with Target 15 of the Global Biodiversity Framework.
Familiarising yourself now with the TNFD framework will not only prepare you for compliance, it will also help reduce your nature-related risks and seize the opportunities that nature offers for growth and innovation. For further information and guidance on getting started click here.
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