The Taskforce on Nature-related Financial Disclosures (TNFD) launches its final recommendations

The Taskforce on Nature-related Financial Disclosures (TNFD) released its final framework designed to address financial risks connected to nature, biodiversity, and ecosystems.

This is a historic moment to encourage and support action on nature. The groundbreaking framework enables companies to assess, disclose, and manage nature-related risks and impacts, which will lead to consistent and comparable reporting on nature-related risks and impacts by businesses and financial institutions worldwide.

The TNFD framework consists of 14 disclosure recommendations, which have been developed for nearly two years. The methodology is designed to inform investors of their nature-related financial risks and is designed on the LEAP methodology. Also, the framework is designed to address investors’ as well as regulators’ requirements for more disclosure from companies about their impact materiality and activities that have a significant impact on nature.

Links to EU Corporate Sustainability Reporting Directive (CSRD) – The TNFD framework is indirectly linked to CSRD and may be a help for companies ESRS E4 “Biodiversity and Ecosystems” as material item.

Links to EU Taxonomy – The methodology also helps companies address their scope of activity impacts and their methodological processes for understanding the DNSH in the taxonomy.

Links to Due Diligence – The TNFD helps to establish performance metrics linking biodiversity impacts to financial risks, which can help companies establish due diligence processes and monitoring around their material impacts.

CDP, which runs the global environmental disclosure platform for corporations, has announced its intention to align with the newly released TNFD framework.