The market-led, science-based Taskforce on Nature-related Financial Disclosures (TNFD) framework will enable companies and financial institutions to integrate nature dependencies into their decision making. With the pilots now complete, the shared learnings can enable organisations to get ahead of the regulation, write PwC’s Emma Cox and WBCSD’s Tom Williams.
Look for quick wins, by identifying actions that your organisation can take which meet requirements for TCFD and TNFD.
Ahead of the launch of the TNFD framework in September 2023, the WBCSD (The World Business Council for Sustainable Development) and PwC UK assisted 23 global organisations across three sectors: Energy, Built Environment and Land Use to pilot the TNFD (Taskforce on Nature-related Financial Disclosures). The aim of the pilot was to provide feedback directly to the TNFD, to inform v1.0 of the TNFD framework, while enabling various organisations to follow the guidance with more clarity and confidence, and catalyse adoption of the TNFD in their sectors.
We have distilled learnings from the TNFD pilots to support first steps with the reporting, and prevent organisations from feeling intimidated when making any nature-related disclosures. The TNFD is a new framework but there is lots of guidance and many transferable approaches to help get started on your TNFD journey - so, don’t get scared, get started.
1. You don’t need to start from scratch
You’ve probably done some of the work required already. A lot of nature-related data can be collected from operational data, eg. water consumption or value chain information, eg. raw material input volumes. A good starting point is to look at the data you have already collected or are going to collect for other disclosure requirements and identify where additional data is actually required.
“To get started on TNFD’s four stage approach, we’ve been building on the Global Reporting Initiative (GRI), which we were already utilising.”
Isabel Tomé Esteban
Head of Biodiversity, Iberdrola
2. There is a lot of overlap with TCFD
TNFD was built based upon the TCFD framework and there are 14 TNFD disclosures in total, three of which are additional to the TCFD and one which has been adapted.. Look for quick wins, by identifying actions that your organisation can take which meet requirements for TCFD and TNFD.
“We are working on a nature positive roadmap for the Built Environment and we can use TNFD as the framework for that knowing that TCFD and TNFD links make it easier for us to bring nature into climate-related disclosures.”
Daisy Hessenberger
Global nature and biodiversity SME, Arcadis
“TCFD has been helpful in terms of selling TNFD internally. You don’t need to start from scratch, you can do the same for nature as what you’re already doing for climate.”
Brandon Lewis
Director of Sustainability, Manulife
3. TNFD will release sector-specific guidance, including tools
There is sector-specific guidance from TNFD, which has been developed by industry leads in collaboration with the taskforce. All sector guidance follows the same framework, and you can see examples in v1.0, such as for food and agriculture. The final release includes tools aligned to each sector, biome and stage of LEAP.
“The purpose is to help organisations to work out what is relevant to them,considering which core disclosure metrics, which are relevant for the organisation’s sector and any additional ones that may be necessary.”
Pete Jones
Pilot lead for WBCSD TNFD Energy, ERM
4. Maturity matters: examine the core and additional TNFD disclosure metrics
TNFD has core disclosures which everyone should look to disclose against as well as additional metrics for those who are more mature. Before beginning on your TNFD journey, it is important to discuss your ambition level with key stakeholders and understand your level of maturity. There is support available here - TNFD pilotees had their TNFD maturity assessed using PwC’s ‘TNFD Maturity Assessment’ tool.
“The Taskforce analysed over 3,000 metrics put forward by our knowledge partners (eg. GRI, SASB, CDP, EFRAG), and categorised them into assessment and disclosure metrics. In tune with financial market’s expectations for comparability and analysis, 15 core disclosure metrics were proposed in v0.4 of the TNFD framework. These metrics are aligned with Target 15 of the Global Biodiversity Framework, which calls for companies to disclose against nature-related impacts, dependencies, risks and opportunities on topics such as land use, pollution and conservation.”
Felipe Arango
Technical Advisor and Pilots Lead, TNFD
5. The LEAP approach is there for guidance only
LEAP stands for Locate, Evaluate, Assess and Prepare. LEAP is TNFD’s suggested four stage process (five if you include the scoping stage) for nature-related risk and opportunity management which can help organisations to meet TNFD disclosure requirements. It is there as guidance and does not need to be followed to meet all of the disclosure requirements. Steps under LEAP do not need to be followed chronologically, and not everything uncovered by LEAP assessments needs to be publicly disclosed.
“The LEAP approach can feel complex, but we have found it useful instead by working intuitively i.e. start by locating where your organisation's interactions with nature are on a map. What is the quality of those interactions? How are we impacting nature? Then it’s just a case of how should we tell others about this? It is easy to get caught up in details but it helps to take a step back and use it as a basis to guide an intuitive approach.”
Brandon Lewis
Director of Sustainability, Manulife
“We assessed different technologies for impacts and dependencies on ecosystem services before going into the locate phase i.e. the E before the L. Think of LEAP as an iterative process, you may not see all of your priority locations at once but if you focus on a few, then go to the assess step after you have data from impacts at sites.”
Isabel Tomé Esteban
Head of Biodiversity, Iberdrola
The way forward
Uptake of the TNFD will vary between nations, with different countries translating the Global Biodiversity Framework to meet national goals regarding topics such as conservation. One thing is certain regardless - corporates will need to start disclosing material nature-related impacts, dependencies, risks and opportunities as well as providing detail on how they are mitigating and managing these by integrating nature-related decision making into traditional ERM processes. Financial institutions will be increasingly dependent on these disclosures as the state of nature continues to worsen.
How can you kickstart your nature-related disclosures?
The WBCSD website provides outputs and insights from the case studies and sector specific piloting experience from the 23 companies that piloted TNFD. Get in touch with PwC’s TNFD team for more information on TNFD maturity and find out more about our Centre for Nature Positive Business.
“Additional disclosure requirements can feel daunting, but if you frame the TNFD as a build on TCFD rather than an entirely new set of requirements, you should find it easier to get started. And remember to reflect on the bigger picture here - the TNFD is designed to help you prioritise actions that will do most to mitigate nature-related business risks and contribute to reversing nature loss by 2030.”
Will Evison
Director, PwC UK
