Taskforce on Nature-related Financial Disclosures
A framework structured like TCFD with a focus on Nature.
Nature-Related Risk Management and Disclosure
A relatively new disclosure framework, which released its fourth and final beta framework in March 2023 and anticipates full market adoption in late 2023, the Taskforce on Nature-related Financial Disclosure (TNFD) is not only aligned with TCFD pillars and principles, but supports and partners with fully established standards such as the International Sustainability Standards Board (ISBB) and the Global Reporting Initiative (GRI).
What sets the TNFD apart is that it moves beyond climate-related risks associated with doing business and recommends that companies take a more broad and integrated approach that focuses on both climate- and nature-related risk and loss, while focusing on the development of suitable risk management processes that can result in a reduction on negative biodiversity and climate impacts.
TNFD draft recommended disclosures are designed to:
- Meet the corporate reporting needs of a wide range of organizations whose direct and indirect operations involve nature-related risks and opportunities.
- Help strengthen strategy and risk management capacities at the board and management level.
- Improve capital allocation and asset valuation decisions related to nature-based issues.
- Promote more informed investment, credit and insurance underwriting decisions by financial institutions.
- Enable a stronger understanding of the concentrations of nature-related risk and opportunities, based on insights into nature dependencies and impacts.
How TNFD builds off of TCFD
The TNFD framework is structured on the same four pillars as comprise TCFD, including governance, strategy, risk and impact management and metrics and targets.
Additionally, all 11 TCFD recommended disclosures are carried over into the TNFD recommended disclosures, providing maximum consistency of content. Importantly, this alignment enables report users to start reporting on nature-related issues alongside, or integrated with, climate-related issues.
TNFD additionally aligns to the 6 general disclosures covered in TCFD and assumes the same approach to Scope 3, or value chain impacts, albeit within the context of nature.
The SCS Consulting Team has fully vetted the draft framework, how it was built from the TCFD framework and other reporting frameworks and supports companies looking to enhance their climate-related financial disclosures with a more comprehensive focus that includes nature and biodiversity risks and impact mitigation.
How SCS Helps to Carry Out a Comprehensive TNFD Report
SCS Consulting works with companies of all sizes to determine how the TFND framework can best optimize their sustainability governance structure and offers expertise on how best to leverage TNFD toward meeting the disclosure requirements that have investor and rating implications. Where TCFD is already being utilized, we merge processes.
SCS Consulting provides a fully collaborative partnership experience where we join each client wherever they are on their sustainability journey. Our team of advisors helps you take the appropriate next step:
Discovery: We work with you to undertake a comprehensive Needs and Goals Assessment to understand where you currently align with TNFD, and to inform strategy and implementation plans.
Set up: We work with you to set up your specific sector preferences (which align with SASB standards classifications) and biome preferences that align with the IUCN Global Ecosystem Typology, a comprehensive classification framework for the earth’s ecosystems to help your company determine the level of reporting necessary to showcase your sustainability efforts from both a climate and a nature/biodiversity perspective.
Map: We create your company’s LEAP profile according to the TNFD Framework:
✓ LOCATE how your company interfaces with nature.
✓ EVALUATE your company's priority dependencies and impacts.
✓ ASSESS your material risks and opportunities.
✓ PREPARE for your company's response/report and determine which information evaluated is material for your TNFD report.
Knowledge & Capacity-Building: We provide your team with training to understand TNFD’s core principles and recommendations and the value and objective of specific undertakings, such as scenario analysis. We work with your teams on capacity-building, and facilitation support along the way, including board oversight, financial planning, and management practices.
Risk & Impact Management: We guide your team through the risk and opportunity assessment process with a focus on both qualitative and quantitative risks, including completing scenario analysis on material issues.
Strategy Development: We support the development of a TNFD strategy and roadmap to mitigate risk and build operational resilience over the short, medium, and long term, which includes metrics, targets, and transitional planning.
TNFD & TCFD Disclosures: We help to integrate TNFD disclosures into your current TCFD and other ESG reporting frameworks or help to create a N-aligned report that can be used for company management reporting and investor communications.
SCS Consulting offers a turnkey TNFD advisory and reporting service that can accurately account for your company’s overall nature-related risk exposure and meet disclosure expectations.