Essential Corporate News – Week ending 22 September 2023

TNFD: Recommendations of the Taskforce on Nature-related Financial Disclosures

On 18 September 2024, the Taskforce on Nature-related Financial Disclosures (TNFD) published its final Recommendations for nature-related risk management and disclosure. These provide companies and financial institutions of all sizes with a risk management and disclosure framework to identify, assess, manage and, where appropriate, disclose nature-related issues.

The TNFD Recommendations build on those of the Task Force on Climate-related Financial Disclosures (TCFD) and they include 14 recommended disclosures covering nature-related dependencies, impacts, risks and opportunities. They have been designed to:

• be consistent with the language, structure and approach of both the TCFD and the International Sustainability Standards Board (ISSB) to enable integrated climate- and nature-related reporting, replicating the four disclosure pillars and all 11 TCFD recommended disclosures, which have now been incorporated into the ISSB Standards and thus its global sustainability reporting baseline; 
• accommodate the different approaches to materiality now being applied in jurisdictions around the world, through two materiality lenses – meeting the material information needs of capital providers, consistent with the ISSB’s IFRS Standards and TCFD recommendations, and meeting the material information needs of stakeholders focused on impacts, aligned with a broader materiality approach consistent with the approach of the Global Reporting Initiative (GRI) in the GRI Standards; 
• be aligned with the global policy goals and targets in the Global Biodiversity Framework for corporate reporting (GBF), including Target 15 on corporate reporting of nature-related risks, dependencies and impacts; and
• leverage the best available science, including assessments of the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES) and the climate science from the Intergovernmental Panel on Climate Change (IPCC)

An accompanying suite of additional guidance has also been released to help market participants begin to develop integrated assessment and corporate reporting related to nature. This can be accessed via the Recommendations and the Executive Summary (see links below). It includes particular guidance for financial institutions, with further sector and biome guidance to be developed.  

The TNFD is encouraging and supporting voluntary market adoption of the Recommendations and, following the example of the TCFD, the TNFD will track voluntary market adoption on an annual basis through an annual status update report beginning in 2024. The TNFD is expecting companies to start announcing their intention to adopt the Recommendations shortly. GSK are reported to have announced they are committed to publishing their first TNFD disclosures from 2026, based on 2025 data. Others are expected to signal similar intentions soon and the TNFD will announce an inaugural list of TNFD Adopters, companies that have indicated their intention to start adopting the Recommendations, at the World Economic Forum at Davos in January 2024.

(TNFD, Recommendations of the Taskforce on Nature-related Financial Disclosures, 18.09.2023)

(TNFD, Executive Summary of the TFND Recommendations, 18.09.2023)