The Taskforce on Nature-Related Financial Disclosures (TNFD) is an international initiative that builds on a model developed by the Taskforce on Climate-Related Financial Disclosures (TCFD).
The TNFD focuses on natural and environmental risks, including the loss of biodiversity and the degradation of ecosystems. In comparison, TCFD focuses on climate risk, an interdependent but distinct issue.
TNFD has recently published its disclosure framework’s fourth and final beta version. Launched in June 2021, the TNFD was tasked with developing an integrated risk management and disclosure framework for organisations to report and act on evolving nature-related risks.
The TNFD aims to provide a framework for organisations to report risks from biodiversity loss and ecosystem degradation.
Unlike climate risk with a measurable metric like global temperature, natural risk has no precise measure. The draft disclosures seek to change that and highlight disclosures and metrics related to core global disclosure metrics, core sector disclosure metrics, and additional disclosure metrics.
TNFD retains the four pillars of TCFD — Governance, Strategy, Risk Management, and Metrics and Targets. The diagram below highlights the key disclosures from TNFD.
With both TCFD and TNFD disclosures comping up, the non-financial reporting will likely become more comprehensive. The flip side would be increased reporting costs.
Image: TNFD website
Utkarsh Majmudar 