TNFD and Nature Reporting
What It Means for Companies
Nature loss is one of the most significant risks facing society and our planet. As ecosystems decline, businesses face new risks to their operations and supply chains. Regulators, investors and consumers want clear information on how organisations depend on and affect nature and their actions to mitigate these risks. The Taskforce on Nature-related Financial Disclosures (TNFD) helps companies achieve this and incorporate nature-related risks and opportunities into corporate decision-making, establishing an operational baseline that is explored further in Environmental Social and Governance Reporting: A Complete Guide for 2024 to streamline multi-framework compliance.
A market-led initiative, TNFD is built on the same approach as the Taskforce for Climate-related Financial Disclosures (TCFD), now integrated into the International Sustainability Standards Board’s (ISSB) IFRS S2 Climate-related Disclosures (see IFRS S2 Climate-related Disclosures explained). Both are structured around four pillars: governance, strategy, risk and impact management, and metrics and targets, creating a consistent approach to assessing and reporting on climate- and nature-related issues.
TNFD responds to the growing recognition that nature loss poses long-term financial risks, including operational disruption and supply chain instability. As stakeholders demand greater transparency in how companies address these risks, they must understand how to apply the TNFD principles and integrate nature considerations into their reporting and business strategy.
Why TNFD matters for companies
TNFD offers a structured approach for assessing nature-related dependencies, impacts, risks and opportunities. It helps companies understand where activities rely on natural systems, including water, soil, biodiversity, and ecosystem services. These dependencies influence financial performance through access to resources, operational stability, and regulatory compliance.
Nature underpins all economic activity. Companies in the food production, mining, energy, manufacturing, finance and consumer goods industries face significant nature-related risks. Ignoring these risks may have legal, financial, or operational consequences. TNFD provides the tools needed to anticipate these risks and embed nature considerations into strategic planning and decision-making.
TNFD also supports companies preparing to report on a material issue biodiversity and ecosystems under the EU Corporate Sustainability and Responsibility Directive (CSRD). It is the basis for the detailed evidence-based disclosures needed for credible reporting. Organisations looking to integrate these data streams can review our operational guide on How to Align Existing Reports with CSRD Requirements to secure audit readiness. Our article How to align existing reports with CSRD requirements outlines how companies can integrate these frameworks.
Key nature-related risks for companies
Nature loss influences several business risks, including:
- Water scarcity
- Pollinator decline
- Deforestation
- Habitat and ecosystem loss
- Soil degradation
- Coastal erosion
- Supply chain instability
TNFD helps companies identify where these risks appear in their operations and across their value chain. This information supports strategy, investment planning, and disclosure.
The four pillars of TNFD
TNFD aligns closely with the structure used in existing climate-related frameworks such as TCFD and its successor IFRS S2. This enables organisations to build on existing policies, processes and systems as they expand their environmental reporting. The four pillars are:
1. Governance
Companies must explain how nature-related issues are monitored and managed across the organisation. This includes governance structures, responsibilities, decision-making processes, and how nature considerations influence board and management actions.
2. Strategy
TNFD requires companies to describe how nature-related risks and opportunities influence their strategy and financial planning. This includes short-, medium- and long-term considerations. Strategy disclosures must show how nature considerations shape business models, supply chains, markets and competitive positions.
3. Risk and impact management
Nature-related risks often arise in complex value chains. TNFD helps companies identify and assess these risks and incorporate them into existing risk management processes. This includes evaluating both dependencies (the nature-related services companies rely on) and impacts (how company activities affect nature).
4. Metrics and targets
TNFD encourages the use of metrics to monitor and manage dependencies, impacts, risks and performance. Companies must describe the targets they have set and the methods used to measure progress. This supports transparency and helps investors evaluate a company’s readiness for nature-related regulatory and market changes.
The LEAP approach: TNFD’s core methodology
TNFD is based on the LEAP approach — locate, evaluate, assess and prepare. It guides companies step by step from identifying the most important nature-related issues to reporting n progress::
- Locate their interface with nature
- Evaluate dependencies and impacts
- Assess nature-related risks and opportunities
- Prepare responses and disclosures
This structured approach helps organisations move from high-level awareness to detailed analysis. Earlier phases also supplement evidence-based materiality assessment under CSRD.
Locate
Companies must identify where they interact with nature. This requires mapping sites, operations, suppliers, products, and downstream activities. The mapping process reveals where the most significant nature-related risks and impacts occur.
Evaluate
After locating key interactions, companies evaluate their dependencies and impacts. Dependencies include reliance on resources such as water, timber and land, as well as natural processes which help to regulate air, soil and water quality and pollination. Impacts may include pollution, habitat loss, or resource depletion.
Assess
Companies then assess the risks and opportunities associated with their dependencies and impacts. This includes quantifying the financial risks (such as supply chain disruption) and determining the scale of potential market, reputational and regulatory risks. Opportunities may include new products, access to green financing, or improved resource efficiency.
Prepare
The final step involves preparing for disclosure. Companies must set targets, develop action plans, and integrate nature considerations into governance and strategy. This step supports ongoing improvements in transparency and strengthens stakeholder confidence.
How TNFD links to CSRD, GRI and ISSB
TNFD complements existing reporting frameworks, helping sustainability teams delve deeper into nature-related issues.
CSRD
CSRD requires companies to report on their most important sustainability issues based on a detailed materiality assessment. Where nature is one of those issues, TNFD offers structured tools for identifying nature impacts, dependencies, and risks.
GRI
GRI Standards require companies to report on biodiversity, water, emissions, and community impacts. TNFD helps strengthen these disclosures by providing a clearer approach to identification, monitoring and measurement. Readers can revisit GRI Standards: What’s Changing in 2026 for more context on how GRI is evolving.
ISSB
With the launch of IFRS S2, ISSB integrated the TCFD framework on climate-related reporting into the ISSB standards, In November 2025, it announced the kick-off of a standards setting process for nature. This would be based closely on TNFD. Adopting TNFD will mean companies are well-placed for when the new IFRS standards are released.How companies can prepare for TNFD reporting
Companies can begin preparing for TNFD by taking the following steps:
1. Establish the groundwork
Getting to grips with nature-related issues is complex and can seem daunting for companies just starting out. Take time to map out the project at a high level before diving into more detailed analysis. Start by listing the locations where there are likely to be nature-related dependencies, impacts, risks and opportunities, e.g. due to their coastal location and water use. Determine what data is available and where there are gaps in knowledge. This helps to establish project priorities, as well as effectively plan resource requirements and budget.
2. Integrate nature into materiality assessment
Make nature part of your next materiality assessment. TNFD provides the tools to help you identify issues by industry and raw material. This is a good starting point to determine what’s relevant for your business. .
3. Map dependencies across the value chain
Build on your initial scoping exercise, with a more detailed value chain mapping to identify where important company locations overlap with particularly sensitive ecosystems, e.g. areas of very high water stress. Detailed mapping helps establish how the company interacts with other stakeholders in an area, including suppliers and the community, revealing opportunities to collaborate to strengthen ecosystems.
4. Update governance and strategy
Review policies, processes and structures to ensure they fully incorporate nature-related issues. Make sure the Board and executive team is updated on the company’s nature-related dependencies, impacts, risks and opportunities as part of any wider sustainability briefing, enabling them to incorporate nature matters into strategic planning.
5. Strengthen internal data and systems
It takes time to develop an effective and comprehensive nature strategy, starting with a single location or sourcing of a single ingredient and gradually expanding to a wider range of sites and raw materials. With each stage work to deepen data, strengthen internal systems and collaborate with suppliers to improve measurement, building the reliable information required for reporting.
6. Prepare for assurance
Nature-related information may require assurance in future. Get ahead by documenting processes, methodologies, data sources and assumptions from the outset.
How Context Sustainability supports TNFD adoption
Context Sustainability helps companies integrate TNFD into their sustainability reporting. Our team assists with value chain mapping, materiality assessment, data collection and reporting aligned with frameworks, such as CSRD, GRI, SASB and ISSB. We support clients as they develop governance systems, evaluate risks, and prepare disclosures that reflect best practice.
Companies preparing for upcoming reporting cycles can work with us to build a transparent, evidence-based approach to nature reporting. Our advisory services help strengthen decision-making, reduce risk and enhance confidence among investors and stakeholders.
Frequently Asked Questions
What is the primary purpose of the Taskforce on Nature-related Financial Disclosures framework?
The framework provides organisations with a structured methodology for identifying, assessing, managing, and reporting their dependencies, impacts, risks, and opportunities related to natural systems, enabling businesses to integrate nature loss into core financial risk management.
How does the TNFD framework define the difference between a nature dependency and a nature impact?
A dependency is an ecosystem service that a business relies on to sustain its operations, such as the availability of clean water or stable soil composition. An impact refers to the positive or negative changes an organisation’s direct operations or broader value chain activities cause to natural habitats and biodiversity.
What are the four structural pillars used to align nature reporting with existing climate disclosures?
The framework has four core pillars:
- Governance, which explains board oversight of nature-related matters.
- Strategy, detailing how nature risks affect financial planning.
- Risk and Impact Management, outlining the identification processes used across supply chains.
- Metrics and Targets, tracking performance against specific environmental goals.
What is the practical application of the LEAP approach within nature-related corporate reporting?
The LEAP approach is an integrated assessment methodology guiding teams through four distinct phases: locate (L) your interface with natural ecosystems, evaluate (E) specific environmental dependencies and impacts, assess (A) corresponding commercial risks and opportunities, and prepare (P) verified data responses for public disclosure.
