Nature underpins over half of global GDP, yet most organizations have no structured way to assess their dependence on ecosystems or report nature-related risks. The TNFD framework addresses that gap. Released in September 2023, it provides a standardized approach for organizations to identify, assess, and disclose risks and opportunities related to nature and biodiversity.
The Taskforce on Nature-related Financial Disclosures (TNFD) builds on the same structure as the TCFD framework but extends it from climate to the broader natural environment. Where TCFD focuses on climate-related financial risks, the TNFD framework covers biodiversity loss, ecosystem degradation, water pollution, land use change, and resource exploitation.
Below, you will learn what the TNFD framework requires, how the LEAP approach works, what the four pillars cover, whether reporting is mandatory, and what data organizations need to start.
What Is the TNFD Framework?
The TNFD framework is a set of 14 recommended disclosures organized around four pillars: governance, strategy, risk and impact management, and metrics and targets. It was developed by a global taskforce of 40 members from financial institutions, corporations, and market service providers, with backing from the United Nations Development Programme and other multilateral organizations.
The framework applies to all sectors, but is most relevant for organizations with significant nature dependencies: agriculture, food and beverage, mining, forestry, real estate, and financial services. Any company with operations or supply chains that touch land, water, or marine ecosystems can benefit from TNFD-aligned reporting.
Unlike many sustainability frameworks, the TNFD framework emphasizes location-specific assessment. Nature-related risks vary dramatically by geography. A palm oil supplier in Southeast Asia faces different biodiversity risks than a mining company in South America. The framework requires organizations to map their specific interfaces with nature at the location level.
Over 440 organizations across 46 countries have begun adopting the TNFD framework since its release, aligned with the targets set in the Kunming-Montreal Global Biodiversity Framework. Regulatory momentum is building as well, with jurisdictions including the EU, Japan, and Australia incorporating nature-related disclosure requirements.
The Four Pillars of TNFD
The TNFD framework organizes its 14 recommended disclosures into four pillars that mirror the TCFD structure. Each pillar addresses a different aspect of nature-related risk management.
Pillar 1: Governance. Disclose how your organization’s board and management oversee nature-related dependencies, impacts, risks, and opportunities. Describe the roles, responsibilities, and competencies related to nature. Organizations should demonstrate that nature-related issues receive the same governance attention as climate or financial risks.
Pillar 2: Strategy. Describe the nature-related dependencies, impacts, risks, and opportunities you have identified. Explain how these affect your business model, strategy, and financial planning. The TNFD framework asks organizations to consider short, medium, and long-term time horizons and to conduct scenario analysis where feasible.
Pillar 3: Risk and impact management. Describe your processes for identifying, assessing, and managing nature-related dependencies, impacts, risks, and opportunities. Explain how these processes integrate with your overall risk management framework. The TNFD framework distinguishes between dependencies (what you rely on from nature) and impacts (what effects you have on nature).
Pillar 4: Metrics and targets. Disclose the metrics and targets used to assess and manage nature-related risks. Report on your performance against those targets. The TNFD framework recommends both core global metrics (applicable to all organizations) and sector-specific metrics.
How the TNFD LEAP Approach Works
The TNFD framework introduces the LEAP approach as a practical methodology for organizations to assess nature-related issues. LEAP stands for Locate, Evaluate, Assess, and Prepare. It provides a step-by-step process for turning the framework’s recommendations into actionable analysis. For a detailed walkthrough of all 16 sub-components (L1-L4, E1-E4, A1-A4, P1-P4), see our TNFD LEAP approach guide.
L – Locate. Identify where your organization interfaces with nature. Map your direct operations, upstream supply chain locations, and downstream distribution points. For each location, determine the biome, ecosystem type, and proximity to sensitive areas such as protected zones, Key Biodiversity Areas, or high-integrity ecosystems. Continuuiti’s LULC analysis provides the land cover classification and sensitive zone mapping that the Locate phase requires.
E – Evaluate. Assess your dependencies on ecosystem services (pollination, water filtration, soil fertility, climate regulation) and your impacts on nature (habitat conversion, pollution, resource extraction). Prioritize the locations and business activities with the highest dependencies and impacts.
A – Assess. Analyze the nature-related risks and opportunities arising from your dependencies and impacts. Quantify the financial materiality where possible. Consider physical risks (ecosystem degradation that disrupts operations), transition risks (policy changes like the EU Deforestation Regulation), and systemic risks (tipping points in ecosystem function).
P – Prepare. Develop your response strategy, set targets and metrics, and prepare your TNFD-aligned disclosures. Define management actions for priority risks and establish monitoring processes for ongoing assessment.
The Four Realms of Nature in TNFD
The TNFD framework organizes nature into four realms that reflect different environmental systems. Organizations should consider their interactions with each realm when conducting their LEAP assessment.
Land. Terrestrial ecosystems including forests, grasslands, wetlands, and agricultural land. Land-related risks include deforestation, soil degradation, habitat loss, and land use change. Organizations with agricultural supply chains or real estate portfolios have significant land realm exposure.
Ocean. Marine and coastal ecosystems including coral reefs, mangroves, seagrass beds, and deep-sea environments. Ocean-related risks include pollution, overfishing, acidification, and coastal erosion. Shipping, fisheries, and coastal infrastructure face direct ocean realm risks.
Freshwater. Rivers, lakes, aquifers, and freshwater wetlands. Freshwater risks include water stress, pollution, groundwater depletion, and altered flow regimes. Nearly every sector depends on freshwater, making it the most universally relevant realm. The TNFD framework aligns with the water stress assessment methodologies used by WRI Aqueduct.
Atmosphere. The climate system and air quality. While climate-related risks overlap with TCFD, the TNFD framework considers atmospheric connections to nature more broadly, including how climate change drives biodiversity loss and ecosystem shifts.
TNFD vs TCFD: Key Differences
The TNFD framework deliberately mirrors the TCFD structure to reduce reporting burden, but several important differences exist.
| Aspect | TCFD | TNFD |
|---|---|---|
| Scope | Climate-related risks only | All nature-related risks (biodiversity, water, land, oceans) |
| Assessment approach | Scenario analysis | LEAP approach (location-based) |
| Location specificity | Optional | Required (nature is location-dependent) |
| Dependencies | Not explicitly covered | Central concept (what you rely on from nature) |
| Impacts | Focused on financial impact to company | Dual materiality (impact on nature AND financial impact) |
| Pillars | 4 (Governance, Strategy, Risk Management, Metrics) | 4 (same structure, expanded to include impacts) |
| Disclosures | 11 recommended disclosures | 14 recommended disclosures (adds stakeholder engagement, priority locations, value chain) |
Organizations already reporting under TCFD have a head start. The governance and strategy disclosures overlap significantly. The main additional work for TNFD involves the location-based LEAP assessment, dependencies analysis, and nature-specific metrics. The UNEP Finance Initiative’s guidance on TNFD provides practical advice for financial institutions making this transition.
Is TNFD Mandatory?
The TNFD framework itself is voluntary. Organizations choose to adopt it as a best-practice approach to nature-related disclosure. However, regulatory pressure is building, and several jurisdictions are making nature-related reporting mandatory through separate legislation that aligns with TNFD recommendations.
The EU’s Corporate Sustainability Reporting Directive (CSRD) requires large companies to report on biodiversity and ecosystems under the European Sustainability Reporting Standards (ESRS). These standards draw heavily from TNFD concepts, including location-specific assessments and nature dependencies. Companies reporting under CSRD will find significant overlap with the TNFD framework.
France was the first country to mandate biodiversity-related disclosures through Article 29 of its Energy-Climate Law, requiring financial institutions to report on biodiversity risks. Japan’s Financial Services Agency has incorporated TNFD-aligned guidance into its sustainability disclosure expectations. Australia is developing nature-related reporting requirements that reference TNFD as the baseline methodology.
For organizations operating globally, early TNFD adoption serves a practical purpose: it builds the data collection and assessment processes needed before mandatory requirements take effect. Companies that have already completed their LEAP assessment and published TNFD-aligned reports will face a much smaller compliance burden when regulations arrive in their jurisdiction.
The CDP reporting framework has also integrated TNFD-aligned questions into its forests and water security questionnaires, which means organizations responding to CDP investor requests are already generating data relevant to TNFD disclosures.
How to Get Started with TNFD Reporting
Adopting the TNFD framework does not require a complete overhaul of your reporting processes. The taskforce recommends a phased approach that builds on existing capabilities.
Start with the Locate phase. Map your direct operations and priority supply chain locations. Identify which locations overlap with or are near sensitive ecological areas. Land cover analysis tools can automate the mapping of protected areas, Key Biodiversity Areas, and ecosystem types at each location.
Build on existing TCFD reporting. If you already report under TCFD, reuse your governance and strategy disclosures. Expand them to include nature alongside climate. The TNFD framework was designed for this kind of incremental adoption.
Focus on material sectors. Prioritize the parts of your value chain with the highest nature dependencies. For most organizations, this means agricultural supply chains, water-intensive operations, or locations near high-biodiversity areas.
Use available data sources. The TNFD framework recommends using established data sources including the IBAT (Integrated Biodiversity Assessment Tool), ENCORE (Exploring Natural Capital Opportunities, Risks and Exposure), and UNEP datasets. Satellite-based land cover data provides the spatial information needed for the Locate phase without requiring on-the-ground surveys.
Connect climate and nature reporting. Organizations already conducting climate risk management can integrate nature-related assessments into their existing workflows. Many of the same locations exposed to climate hazards also face nature-related dependencies, and a unified assessment avoids duplicated effort.
Frequently Asked Questions
What is the TNFD framework?
The TNFD framework is a set of 14 recommended disclosures that help organizations identify, assess, and report nature-related risks and opportunities. Released in September 2023 by the Taskforce on Nature-related Financial Disclosures, it provides a standardized approach for reporting on biodiversity loss, ecosystem degradation, and nature dependencies.
What are the 4 pillars of TNFD?
The four pillars of TNFD are governance, strategy, risk and impact management, and metrics and targets. These mirror the TCFD structure but are expanded to cover nature-related dependencies and impacts alongside financial risks. Each pillar contains specific recommended disclosures that organizations should report on.
Is TNFD mandatory?
The TNFD framework itself is voluntary. However, several jurisdictions are making nature-related reporting mandatory through separate legislation that aligns with TNFD. The EU’s CSRD requires biodiversity reporting, France mandates biodiversity disclosures for financial institutions, and Japan and Australia are developing TNFD-aligned requirements. Early adoption builds readiness for mandatory compliance.
What is a TNFD assessment?
A TNFD assessment uses the LEAP approach (Locate, Evaluate, Assess, Prepare) to analyze an organization’s relationship with nature. It starts by mapping where operations interface with ecosystems, evaluates dependencies and impacts on nature, assesses resulting financial risks and opportunities, and prepares disclosures and management actions. The assessment is location-specific, meaning it examines each site’s unique ecological context.
Is TNFD a standard or framework?
TNFD is a framework, not a mandatory standard. It provides voluntary recommendations for nature-related disclosures. However, several jurisdictions are incorporating TNFD-aligned requirements into regulations. The framework is designed to be adopted alongside mandatory standards like ISSB and regional sustainability reporting requirements.
What are the 4 realms of nature according to TNFD?
The four realms of nature in the TNFD framework are land (terrestrial ecosystems), ocean (marine and coastal ecosystems), freshwater (rivers, lakes, and aquifers), and atmosphere (climate system and air quality). Organizations should assess their dependencies on and impacts across all relevant realms.
How does TNFD differ from TCFD?
TNFD expands beyond TCFD’s climate focus to cover all nature-related risks including biodiversity, water, land use, and ocean health. Key differences include TNFD’s location-specific LEAP assessment approach, its emphasis on nature dependencies (not just financial impacts), its dual materiality perspective, and 14 recommended disclosures compared to TCFD’s 11.
How many TNFD recommendations are there?
The TNFD framework includes 14 recommended disclosures organized across four pillars. This is three more than TCFD’s 11 recommendations. The three additional disclosures address stakeholder rights and engagement, priority locations for nature-related issues, and upstream and downstream value chain risk and impact management.
Conclusion
The TNFD framework gives organizations a structured way to assess and disclose nature-related risks that extend beyond climate alone. Its LEAP approach provides a practical methodology for identifying where your operations interface with nature, evaluating your dependencies and impacts, and preparing disclosures that investors and regulators increasingly expect. With over 440 adopters and regulatory momentum in the EU, Japan, and Australia, organizations that start their TNFD assessment now will be better positioned when nature-related reporting shifts from voluntary to mandatory.
