Unpacking: Taskforce on Nature-related Financial Disclosures

30 October, 2023

Going beyond GHG emissions.

Whenever the subject of environmental impact comes up, it’s usually limited to emissions, energy consumption, adoption of renewable energy, and global warming - be it board meetings, financial reporting, or public forums. The discussion often fails to account for the environmental damage to the ecosystem - such as loss of biodiversity, pollution of water bodies, etc. The Taskforce on Nature-related Financial Disclosures (TNFD) aims to change this discourse.

The TNFD is a global initiative that provides a framework for businesses to assess nature-related environmental risks and opportunities. The Taskforce behind TNFD consists of 40 individual Taskforce Members representing financial institutions, corporates, and market service providers with over US$20 trillion in assets.

TNFD Overview:

The TNFD defines nature as “a construct of four realms – Land, Ocean, Freshwater, and Atmosphere.” These provide an entry point for understanding how enterprises and people depend on and impact natural capital, which the TNFD defines as natural resources that combine to yield a flow of benefits to people.

  • Just as in the financial world, where assets exist that give rise to revenue flows, nature consists of stocks of environmental assets that give rise to associated benefit flows to people and the economy.

The mission of the TNFD is to deliver a risk management and disclosure framework for enterprises, which can help them report and act on nature-related risks and opportunities. The framework outlines disclosure requirements aligned to those of the Taskforce on Climate-related Financial Disclosures (TCFD), which forms the bedrock of globally aligned environmental disclosure standards.

  • Goals:

  • Improve the availability of data and information on the enterprise’s nature-related impact

  • Standardizing and improving reporting on the effect of business activities on nature

  • Enable organizations to integrate nature-related risks more accurately and reliably into decision-making

  • Establish the importance of nature and its biodiversity within business and finance

  • Benefits:

  • Promoting environmental responsibility

  • Ensuring investors and asset managers that all financial risks are accounted for

  • Supporting a shift in global financial flows toward nature-positive outcomes


How does the TNFD compare to TCFD, its climate-related counterpart? Even though both frameworks are aligned on the same principles, they target different areas of the organization’s environmental impact.

TCFD is a more advanced and mature reporting framework. What began as a voluntary set of recommendations has become part of the regulatory framework in many jurisdictions, including the European Union, Singapore, Canada, Japan, South Africa, and New Zealand.

The TCFD serves as the basis for disclosure standards under development by the ISSB, which aims to develop a “global baseline” for sustainability- and climate-related financial disclosures. The TNFD framework is still in development and is yet to be adopted by regulators as the template for nature-related disclosure requirements.

Need for Nature-related Financial Disclosures

The rise of ESG and subsequent financial frameworks to help enterprises measure their environmental impact have always been through a climate change lens - to measure the effect on global climate and temperature increment. It created a huge gap, where no globally aligned frameworks provided the structure for organizations to measure and report on the impact on nature.

Global alignment is essential for the systemic economic reform needed to address the loss of nature and biodiversity worldwide. With TNFD, disclosures on nature-related risks and opportunities will help shape better decision-making within companies and provide investors with greater clarity on the nature-related risks.

Challenges in TNFD Compliance:

The TNFD provides solutions to a big reporting gap. However, complying with the same is a challenging task for any enterprise. The primary challenge with TNFD is the same as every other framework - ESG data. Collating and managing data required for disclosures require enterprises to simplify data pipelines across complete value chains. However, it can be difficult for suppliers to fulfill the data demands of enterprises with limited capital and resources.

It can also be particularly challenging for enterprises when you account for the hundreds and often thousands of suppliers they coordinate with regularly. These suppliers come from different jurisdictions, geography, and industry that enterprises don’t have expertise in. It increases their reliance on suppliers to provide legitimate, traceable, and wholesome data.

Treeni’s resustain™ platform and managed services may hold the key for enterprises.

Treeni’s 360 Solution:

Treeni’s resustain™ is a SaaS-based ESG platform that can help enterprises roll out ready-to-use reporting platforms to all their value chain suppliers and streamline data collation for compliance. The platform comes with customizable dashboards and provides visibility to enterprise leadership.

Along with the ESG SaaS platforms, Treeni also offers Managed Services. It includes a dedicated team of experts with nuanced knowledge about the region and industry-specific supply chains. The team of experts handholds suppliers at every stage, improving visibility and traceability across the entire value chain - from collating data through different sources to feeding it into the resustain™ platform to derive insightful analytics.

Are you interested in streamlining your supply chain compliance with sustainability solutions? Fill out the form below so that we can get in touch.

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