The Taskforce on Nature-related Financial Disclosures (TNFD) has published its fourth and final beta framework for nature-related risk management and disclosures.

For the first time, market participants will be able to view a full representation of the framework, including the TNFD’s proposed approach to disclosure metrics.

The three tiers of proposed disclosure metric are: Core global disclosure metrics, core sector disclosure metrics and additional disclosure metrics.

The core global disclosure metrics are relevant to organisations across sectors and are reflected in global policy priorities, including the Global Biodiversity Framework.

The core sector disclosure metrics will enable capital providers to make comparable assessments of businesses within a sector, and the additional disclosure metrics will allow report preparers to include metrics that might be relevant to their business model and nature-related issues.

Since beginning its work in 2021, the TNFD’s framework has garnered support from over 1,000 members of the TNFD Forum and 200 organisation are now testing the draft framework.

The TNFD has made adjustments to its proposed risk and opportunity assessment process, and reduced its proposed recommended disclosures from 15 to 14, following feedback.

Its framework is anchored by the same four pillars as the Taskforce on Climate-related Financial Disclosures' (TCFD) approach and all 11 of the TCFD recommended disclosures have been incorporated into the TNFD final draft.

The TNFD hopes this will encourage and enable market participants to move towards integrated climate-nature disclosures.

The taskforce is developing a framework for risk management and disclosure, not a standard, and the final draft draws from and is designed to inform relevant standards, including those from the International Sustainability Standards Board (ISSB) and the Global Reporting Initiative (GRI).

For the first time in this final draft, the TNFD has outlined its approach to disclosure metrics proposing a tiered approach of leading indicators, many drawn from existing standards, that seeks to strike a balance between being science-based and practical for market participants to use as part of the annual reporting cycle.

It has adapted the idea of ‘scopes’ that are used in climate reporting to the nature context as ‘direct’ operations, ‘upstream’, ‘downstream’ and ‘financed’.

The TNFD has also released draft guidance on its proposed approach to the use of scenarios for the nature-related issues, as well as draft guidance on engagement with affected stakeholders, and for four sectors and biomes.

Following a final 60-day consultation process, from 30 March to 1 June 2023, the TNFD’s final recommendations based on final feedback and pilot testing will be published in September 2023.

“This fourth and final draft of the TNFD framework will provide market participants, for the first time, with a full representation of the core aspects of the proposed TNFD framework, including examples of additional guidance by sector and biome and a recommended set of disclosure metrics,” said TNFD co-chair, David Craig.

“This has been the culmination of a lot of work to bring a science-based approach but make the complexity of the science of nature accessible and relevant to market participants.

“We are delighted by the level of active participation from the market, including pilot testers, throughout this design and development phase which will help to underpin strong market support when the final recommendations are published in September.”

Share Story: