TCFD vs. TNFD: Climate vs. Nature Financial Disclosures Explained

Key Differences: Single vs. Double Materiality

TCFD: Financial Materiality (How Climate Affects the Company)

TCFD focus: Climate-specific disclosures, addressing risks and opportunities from climate change; prioritized financial materiality for investors and financial stakeholders. (Source)

TCFD adopted a financial materiality lens, meaning disclosures focus on climate-related information that could reasonably be expected to influence decisions made by primary users of general purpose financial reports (investors, lenders, insurers). This is sometimes called "single materiality" or "outside-in" materiality:

• Outside-in perspective: How does climate change affect the company's financial position, performance, and cash flows?
• Example questions: What is the company's exposure to physical climate risks (coastal real estate vulnerable to sea-level rise)? What is the company's exposure to transition risks (fossil fuel assets that may be stranded as carbon pricing increases)?
• Focus: Risks and opportunities that translate into financial impacts (revenue loss, increased costs, asset impairments, growth opportunities).

Financial materiality aligns with existing financial reporting frameworks (IFRS, US GAAP) where materiality is defined as information that could influence economic decisions of users. TCFD was designed for integration into mainstream financial reporting (annual reports, 10-Ks), not separate sustainability reports.

TNFD: Double Materiality (How Nature Affects Company + How Company Affects Nature)

TNFD broader scope: TNFD broadens scope to consider nature-related risks and dependencies, helping businesses assess environmental impacts and dependencies on ecosystems; adopts double materiality perspective where companies evaluate both how nature impacts business and how business impacts nature. (Source)

TNFD adopts double materiality concept, consistent with broader ESG reporting; considers both financial materiality (how nature-related issues create financial risks/opportunities for company) and impact materiality (how company's activities impact nature and people). (Source)

Financial Materiality (Outside-In)

Same as TCFD: How does nature degradation or restoration affect the company's financial position?

• Example: A food company faces water scarcity risk in key sourcing regions (outside-in: nature affects company). This creates financial risk through supply chain disruption, increased commodity costs, and potential revenue loss.

Impact Materiality (Inside-Out)

TNFD's addition: How do the company's activities impact nature, and what are the consequences?

• Example: The same food company's agricultural practices cause soil degradation and water pollution in sourcing regions (inside-out: company affects nature). Even if this doesn't create immediate financial risk, it may trigger regulatory action, reputational damage, or long-term resource depletion—eventually translating into financial impacts.

Why Double Materiality Matters for Nature

Nature-related risks are often created by a company's own impacts on ecosystems:

• A mining company extracting groundwater (impact) causes aquifer depletion (nature degradation), which then creates water scarcity risk for the company's own operations (financial risk)—a feedback loop.
• An agricultural company clearing forests for farmland (impact) reduces local pollinator habitat (nature degradation), which then reduces crop yields (financial risk).

Double materiality recognizes that companies are not just passive recipients of nature risks—they are active contributors to nature degradation, which in turn creates risks for themselves and others. By requiring disclosure of both impacts and dependencies, TNFD aims to make visible these feedback loops and systemic risks.

Alignment with EU CSRD/ESRS

TNFD's double materiality approach aligns with the EU's Corporate Sustainability Reporting Directive (CSRD) and European Sustainability Reporting Standards (ESRS), which also mandate double materiality. This makes TNFD particularly relevant for companies reporting under EU regulations, where impact materiality is legally required.

The 14 TNFD Disclosures: What's New Beyond TCFD

TNFD recommends 14 disclosures to promote provision of clear, comparable disclosures; building on TCFD, all 11 TCFD disclosures carried over plus 3 additional recommended disclosures. (Source)

The 3 Additional Nature-Specific Disclosures

Three additional TNFD disclosures beyond TCFD: Engagement with Indigenous Peoples and Local Communities (IPLCs) and affected stakeholders, Interface with priority locations, Value chains. (Source)

1. Engagement with Indigenous Peoples and Local Communities (IPLCs) and Affected Stakeholders

Pillar: Strategy

Disclosure requirement: Describe the organization's engagement with Indigenous Peoples, Local Communities, and affected stakeholders in its assessment of, and response to, nature-related dependencies, impacts, risks, and opportunities.

Why this is new: TCFD does not explicitly require stakeholder engagement disclosure. Climate risk assessment is typically conducted internally or with external consultants, without mandatory engagement with affected communities.

Why it matters for nature: Nature-related impacts and dependencies are often highly localized and affect specific communities:

• A mining company extracting minerals in a biodiversity hotspot affects Indigenous Peoples who depend on that ecosystem for livelihoods, culture, and food security.
• A forestry company's operations in tropical regions may impact local communities' access to forest resources (timber, non-timber forest products, water).
• An infrastructure project (dam, highway) may fragment ecosystems and disrupt traditional land use by Indigenous Peoples.

TNFD requires companies to disclose:

• How they identify and engage with affected stakeholders (IPLCs, NGOs, scientists)
• How stakeholder input informs nature risk assessment and strategy
• Any conflicts, grievances, or disputes related to nature impacts, and how they are addressed

Example disclosure: "We engaged with 12 Indigenous communities in the Amazon basin where we source cocoa. Through participatory mapping workshops, communities identified priority biodiversity areas (sacred forests, water sources) that we have excluded from sourcing zones. We established a grievance mechanism accessible in local languages, receiving 3 complaints in 2024 related to water pollution from processing facilities, all of which have been resolved through infrastructure upgrades."

2. Interface with Priority Locations

Pillar: Strategy

Disclosure requirement: Describe the locations where the organization has identified material nature-related dependencies, impacts, risks, and opportunities (priority locations).

Why this is new: TCFD requires disclosure of climate risks by time horizon (short, medium, long term) but does not require geographic granularity beyond what is financially material. Climate is a global atmospheric phenomenon; a company's GHG emissions anywhere on Earth contribute to global warming.

Why it matters for nature: Nature risks are inherently location-specific. A company's impact on biodiversity in the Amazon is fundamentally different from its impact in European agricultural landscapes or Arctic tundra. Ecosystems vary by:

• Biodiversity value (rainforests vs. deserts)
• Rarity and endemism (species found nowhere else)
• Regulatory protection (national parks, UNESCO World Heritage Sites, Ramsar wetlands)
• Stakeholder sensitivity (Indigenous territories, subsistence fishing zones)

TNFD requires companies to disclose:

• Geographic locations (countries, regions, watersheds, biomes) where material nature interactions occur
• Criteria used to identify "priority locations" (e.g., high biodiversity value, regulatory risk, stakeholder concern, operational dependency)
• Nature of operations at priority locations (direct operations, supply chain, investments)

Example disclosure: "We identified 8 priority locations based on biodiversity value (IUCN Protected Area categories), water stress (WRI Aqueduct tool), and operational concentration. Priority locations include: (1) Coffee sourcing in Cerrado savanna, Brazil (threatened biome, high endemism); (2) Palm oil sourcing in Sumatra, Indonesia (deforestation hotspot, orangutan habitat); (3) Manufacturing facility in Punjab, India (extreme water stress, aquifer depletion risk). Combined, these 8 locations account for 65% of our nature-related financial risk exposure."

3. Value Chains (Upstream and Downstream)

Pillar: Strategy

Disclosure requirement: Describe the organization's nature-related dependencies, impacts, risks, and opportunities in its upstream and downstream value chains.

Why this is new: TCFD addresses value chain emissions (Scope 3 GHG), but TNFD extends this to all nature-related issues—land use, water use, pollution, biodiversity impacts—across the entire value chain.

Why it matters for nature: For many sectors, the majority of nature impacts occur in the value chain, not in direct operations:

• Food & beverage: 80-90% of nature impacts (deforestation, water use, pesticide pollution) occur in agricultural sourcing (upstream), not in manufacturing/retail (direct operations).
• Apparel: Cotton/textile production (upstream) drives water consumption and pesticide use; end-of-life waste (downstream) drives pollution.
• Electronics: Mining of rare earth minerals (upstream) causes biodiversity loss and water pollution; e-waste disposal (downstream) causes toxic pollution.

TNFD requires companies to disclose:

• Nature-related dependencies and impacts in upstream supply chains (tier 1, tier 2+, raw material extraction)
• Nature-related risks in downstream value chain (product use, end-of-life, waste management)
• Actions taken to assess and address value chain nature issues (supplier engagement, traceability, certification schemes)

Example disclosure: "Our upstream value chain (agricultural sourcing) accounts for 78% of our total land footprint and 92% of water consumption. We traced 85% of soy sourcing to farm level using satellite monitoring (Trase platform), identifying 12% of supply linked to recent deforestation in Cerrado. We are working with suppliers to eliminate deforestation from supply chain by 2026, with interim target of 50% deforestation-free sourcing by end-2025. Downstream, product packaging contributes 35% of our plastic pollution footprint; we are transitioning to biodegradable materials (45% of packaging by volume as of 2024)."

Complete List: 14 TNFD Disclosures

LEAP Approach: The Nature Risk Assessment Methodology

LEAP approach defined: Locate, Evaluate, Assess, Prepare — risk and opportunity assessment methodology at heart of TNFD, providing integrated assessment approach with scoping, location-specific analysis, stakeholder engagement, and risk assessment. (Source)

LEAP is TNFD's structured, four-phase process for assessing nature-related risks and opportunities. It is analogous to TCFD's scenario analysis but adapted for the location-specific, multi-dimensional nature of biodiversity and ecosystem risks.

Phase 1: Locate — Identify Priority Locations with Nature Interfaces

Objective

Identify where (geographically) the organization interfaces with nature, and which locations are priorities based on biodiversity value, ecosystem condition, and operational/financial materiality.

Activities

1. Scope direct operations: Map all operational sites (factories, mines, farms, offices) by location (GPS coordinates, watershed, biome).
2. Scope upstream value chain: Identify sourcing locations for key raw materials (agricultural commodities, minerals, timber, water).
3. Scope downstream value chain: Identify locations where products are used and disposed (if material for nature impacts, e.g., plastic waste in marine environments).
4. Overlay biodiversity/ecosystem data: Use global datasets to identify locations with high nature value:
   • IUCN Protected Areas (national parks, nature reserves)
   • Key Biodiversity Areas (KBAs) identified by IUCN
   • UNESCO World Heritage Sites, Ramsar wetlands
   • High biodiversity wilderness areas (Amazon, Congo Basin, Coral Triangle)
   • Water stress zones (WRI Aqueduct tool)
   • Threatened species habitats (IUCN Red List)
5. Prioritize locations: Combine biodiversity/ecosystem value with operational/financial materiality (revenue concentration, supply chain dependency, regulatory exposure) to create a ranked list of "priority locations" for detailed assessment in Phase 2.

Tools and Data Sources

• IBAT (Integrated Biodiversity Assessment Tool): Provides data on protected areas, KBAs, threatened species ranges.
• ENCORE (Exploring Natural Capital Opportunities, Risks and Exposure): Maps sector-specific dependencies on ecosystem services.
• WRI Aqueduct: Water stress and flood risk mapping.
• Global Forest Watch: Deforestation and forest degradation monitoring.
• Trase (Transparency for Sustainable Economies): Supply chain traceability for agricultural commodities (soy, beef, palm oil).

Example Output

"We identified 250 operational sites globally. Of these, 18 are located within 5 km of Key Biodiversity Areas (KBAs). We prioritized 8 sites for detailed assessment based on: (1) proximity to KBAs, (2) high water consumption in water-stressed regions (Punjab, India; Central Valley, California), (3) sourcing from deforestation-risk regions (Cerrado, Brazil; Borneo, Indonesia). These 8 priority locations account for 40% of our water use and 55% of our land footprint."

Phase 2: Evaluate — Dependencies and Impacts at Priority Locations

Objective

For each priority location identified in Phase 1, evaluate the organization's dependencies on ecosystem services and impacts on nature.

Activities

1. Assess dependencies: For each priority location, identify which ecosystem services the organization depends on:
   • Water provision (surface water, groundwater)
   • Pollination (for agricultural sourcing)
   • Climate regulation (temperature, precipitation stability)
   • Flood/storm protection (wetlands, mangroves, forests)
   • Soil quality (nutrient cycling, erosion control)
   • Pest/disease regulation (natural predators, biodiversity resilience)
   Use ENCORE tool to identify sector-specific dependencies.
2. Assess impacts: For each priority location, evaluate the organization's impacts on nature across five drivers of nature loss (per IPBES framework):
   • Land/sea use change (habitat conversion, fragmentation)
   • Direct exploitation (overharvesting, overfishing, logging)
   • Climate change (GHG emissions contributing to ecosystem stress)
   • Pollution (water, air, soil, chemical, plastic, noise, light)
   • Invasive species (unintentional introduction via transport, ballast water)
3. Quantify magnitude: Where possible, quantify dependencies and impacts using standardized metrics:
   • Water consumption (m³/year) vs. watershed renewable water availability
   • Land footprint (hectares) in high-biodiversity areas
   • Pollutant loads (kg nitrogen, pesticides, plastics discharged)
   • Species affected (number of threatened species in operational footprint, per IUCN Red List)
4. Engage stakeholders: Consult with local stakeholders (Indigenous Peoples, communities, conservation NGOs, scientists) to validate and enrich assessment. Local knowledge often reveals dependencies and impacts not visible in global datasets (e.g., cultural significance of specific species, seasonal water availability patterns).

Example Output

"At our Sumatra palm oil sourcing location (priority location #3), we evaluated: Dependencies: 100% reliant on rainfall for irrigation (no surface water sources); dependent on natural pest regulation from forest buffer zones. Impacts: Our sourcing footprint overlaps with 15,000 hectares of recent deforestation (2015-2023); habitat loss for 3 critically endangered species (Sumatran tiger, orangutan, elephant per IUCN); water pollution from fertilizer runoff (nitrogen load: 250 tonnes/year into adjacent river). Stakeholder engagement: Consulted with 4 Indigenous communities who reported declining fish populations and reduced access to forest resources due to plantation expansion."

Phase 3: Assess — Material Risks and Opportunities

Objective

Translate dependencies and impacts (from Phase 2) into financially material risks and opportunities.

Activities

1. Identify risks arising from dependencies: If ecosystem services the organization depends on are degraded, what are the financial consequences?
   • Water scarcity → production shutdowns, increased costs (water purchase, desalination), supply chain disruption
   • Pollinator loss → crop yield decline, increased costs (hand pollination, alternative inputs), supply security risk
   • Flood protection loss → asset damage, insurance premium increases, operational downtime
2. Identify risks arising from impacts: If the organization's impacts on nature trigger regulatory, reputational, or market responses, what are the financial consequences?
   • Deforestation in supply chain → regulatory penalties (EU Deforestation Regulation), customer boycotts, loss of certification (RSPO, FSC), investor divestment
   • Water pollution → fines, license revocations, cleanup costs, legal liability (lawsuits from affected communities)
   • Species harm → reputational damage, NGO campaigns, operational restrictions (e.g., endangered species protections halting projects)
3. Assess likelihood and magnitude: For each identified risk, estimate:
   • Likelihood (low, medium, high) based on ecosystem trends, regulatory trajectory, stakeholder activism
   • Financial magnitude (potential revenue loss, cost increase, asset impairment) — quantified where possible
   • Time horizon (short <3 years, medium 3-10 years, long >10 years)
4. Identify opportunities: What actions could benefit nature and create business value?
   • Transition to regenerative agriculture → reduced input costs, improved soil health, carbon credits, premium pricing for sustainable products
   • Invest in ecosystem restoration (reforestation, wetland restoration) → water security, carbon sequestration, biodiversity credits, improved license-to-operate
   • Develop nature-positive products → access to growing sustainable product markets, brand differentiation, investor appeal
5. Prioritize material risks/opportunities: Focus on issues that meet financial materiality thresholds (per company's risk management framework) or impact materiality thresholds (per double materiality).

Example Output

"We identified 12 material nature-related risks across 8 priority locations. Top 3 by financial magnitude: (1) Water scarcity risk at Punjab manufacturing site: likelihood HIGH (aquifer depletion trajectory), financial impact €15-25M/year (production curtailment, water purchase costs), time horizon SHORT (2-5 years). (2) Deforestation-linked supply chain risk (Cerrado soy): likelihood MEDIUM (EU Deforestation Regulation enforcement 2025), financial impact €8-12M/year (supply chain disruption, need to source certified soy at premium), time horizon SHORT. (3) Flood risk at coastal facility (Bangladesh): likelihood MEDIUM (mangrove degradation + sea-level rise), financial impact €30-50M (one-time asset damage in 1-in-20-year flood event), time horizon MEDIUM (5-15 years)."

Phase 4: Prepare — Strategy, Resource Allocation, Disclosure

Objective

Develop response strategy, allocate resources, and prepare TNFD disclosures based on Phases 1-3.

Activities

1. Strategy development:
   • Mitigation: Actions to reduce nature impacts (e.g., eliminate deforestation from supply chain, reduce water consumption, shift to biodegradable materials)
   • Adaptation: Actions to reduce exposure to nature risks (e.g., diversify sourcing locations, invest in water recycling, relocate facilities away from high-risk areas)
   • Transformation: Shift business model toward nature-positive activities (e.g., regenerative agriculture, circular economy, nature-based solutions)
2. Resource allocation: Set targets, allocate budgets, assign accountability:
   • Capital expenditure (e.g., €10M for water recycling infrastructure at Punjab site)
   • Operational expenditure (e.g., €2M/year for sustainable sourcing premiums, €500k/year for monitoring and verification)
   • Assign KPIs to management (e.g., Chief Sustainability Officer accountable for 50% reduction in deforestation-linked sourcing by 2026)
3. Disclosure preparation: Draft TNFD-aligned disclosures using data from LEAP process:
   • Governance: Describe board/management oversight of nature strategy developed in Phase 4
   • Strategy: Disclose priority locations (Phase 1), dependencies/impacts (Phase 2), risks/opportunities (Phase 3), and response strategy (Phase 4)
   • Risk Management: Describe LEAP process as the organization's nature risk assessment methodology
   • Metrics & Targets: Disclose quantitative metrics from Phase 2 (water use, land footprint, species affected) and targets from Phase 4 (e.g., 30% reduction in water consumption by 2030)
4. Stakeholder engagement (ongoing): Maintain dialogue with IPLCs and stakeholders engaged in Phase 2, reporting back on actions taken and progress.

Example Output

"Based on LEAP assessment, we committed to: (1) Achieve 100% deforestation-free soy sourcing by 2026 (currently 88% deforestation-free); allocated €3M for supplier engagement and satellite monitoring. (2) Reduce water consumption at Punjab site by 40% by 2028 through closed-loop recycling (€12M capital investment approved). (3) Restore 5,000 hectares of degraded land in Sumatra sourcing region by 2030 (partnership with conservation NGO, €2M committed). We will report annual progress in TNFD-aligned disclosure starting FY2025."

Implementation Reality: What Companies Must Actually Do

TCFD/ISSB S2 Compliance Pathway (Mandatory in Many Jurisdictions)

As of 2025, TCFD-aligned climate disclosure is mandatory for:

• UK: All listed companies, large private companies, and LLPs (>500 employees, >£500M turnover) under UK TCFD mandate (effective 2022-2024 phased rollout).
• EU: Large companies (>250 employees) under Corporate Sustainability Reporting Directive (CSRD) must report per ESRS E1 (climate), which aligns with TCFD/IFRS S2.
• Canada, Australia, Singapore, Japan, Hong Kong: IFRS S2 adopted or endorsed for listed companies (2024-2025 effective dates).
• US (partial): SEC climate disclosure rule (if finalized) would require Scope 1/2 emissions and climate risk disclosure for public companies; California SB 253 requires Scope 1/2/3 disclosure for large companies operating in California (>$1B revenue).

Companies subject to mandatory climate disclosure must:

1. Establish governance: Board climate oversight, management accountability, integration into risk management.
2. Conduct climate risk assessment: Identify physical and transition risks, conduct scenario analysis (2°C and higher warming scenarios).
3. Measure GHG emissions: Scope 1, 2, and 3 (full value chain) per GHG Protocol.
4. Set targets: Net-zero commitments, interim emissions reduction targets (e.g., 50% reduction by 2030), alignment with Paris Agreement (SBTi validation increasingly expected).
5. Disclose: Publish TCFD/IFRS S2-aligned disclosure in annual report, sustainability report, or standalone climate report.
6. Obtain assurance: Limited or reasonable assurance on GHG emissions and climate disclosures (increasingly mandatory, e.g., EU CSRD requires limited assurance from 2024, reasonable assurance from 2028).

TNFD Voluntary Adoption (But Gaining Traction with Investors and Regulators)

TNFD is currently voluntary—no jurisdiction has made TNFD disclosure legally mandatory as of December 2025. However, adoption is accelerating due to:

• Investor expectations: Major investors (Norges Bank Investment Management, APG, CalPERS) are requesting TNFD-aligned disclosures from portfolio companies. The TNFD Early Adopters group includes >300 financial institutions managing >$4 trillion AUM.
• Regulatory incorporation: EU ESRS E4 (Biodiversity and Ecosystems) requires disclosures similar to TNFD (dependencies, impacts, risks, opportunities). UK regulators are consulting on nature disclosure requirements for 2026+. France's Article 29 (climate/ESG reporting for financial institutions) is expanding to nature risk.
• Supply chain pressure: Large corporations adopting TNFD are cascading requirements to suppliers (e.g., Unilever, Nestlé requiring TNFD-aligned nature data from agricultural suppliers).
• Competitive differentiation: Early adopters gain reputational benefits, access to green finance (sustainability-linked loans with favorable terms for nature-positive actions), and prepare for anticipated future regulation.

Companies voluntarily adopting TNFD must:

1. Conduct LEAP assessment (Phases 1-4) for priority operations and supply chains.
2. Engage stakeholders (Indigenous Peoples, Local Communities, scientists, NGOs) per TNFD requirements.
3. Establish nature metrics: Land/water footprints, species affected, ecosystem condition indicators (no universal standard yet—this is evolving).
4. Set nature targets: Align with Global Biodiversity Framework targets (e.g., "30x30": protect 30% of land/sea by 2030), Science-Based Targets for Nature (SBTn) if applicable to sector.
5. Disclose: Publish TNFD-aligned disclosure (14 recommended disclosures) in sustainability report or integrated report.
6. Prepare for assurance: TNFD does not currently mandate assurance, but investors/regulators will likely require it as adoption scales (similar to TCFD trajectory).

Data Architecture: GHG Data vs. Biodiversity Metrics (Complexity Difference)

TCFD/Climate Data (Relatively Mature)

• Standardized metric: GHG emissions in tonnes CO₂e (CO₂ equivalent), globally comparable.
• Established methodologies: GHG Protocol (Scope 1, 2, 3), ISO 14064, sector-specific guidance.
• Data availability: Energy consumption data (electricity, fuel) widely available from utility bills, operational systems. Emission factors published by governments (e.g., UK DEFRA, US EPA) and databases (ecoinvent, IPCC).
• Mature tools: Carbon accounting software (Watershed, Persefoni, Sweep, Normative) automates Scope 1/2/3 calculations.
• Assurance practices: Auditors (Big 4, specialized firms) have 10+ years of experience assuring GHG emissions data.

TNFD/Nature Data (Emerging, Complex)

• No single metric: Nature is multi-dimensional (biodiversity, water, land, oceans, ecosystems). Metrics include: species richness, ecosystem extent/condition, water stress, land use change, pollution loads—no universal "CO₂e equivalent" for nature.
• Methodologies under development: Science-Based Targets for Nature (SBTn) published sector-specific guidance (2023-2024), but uptake is limited. Corporate Biodiversity Footprint (CBF), Biodiversity Impact Metric (BIM), and other tools are not yet standardized.
• Data gaps: Biodiversity/ecosystem data is often location-specific and requires primary data collection (field surveys, remote sensing) rather than secondary databases. Supply chain data (e.g., land use in tier 2+ suppliers) is often unavailable.
• Emerging tools: Platforms like Iceberg Data Lab, Eco Extract, NatureMetrics provide biodiversity data, but coverage is incomplete. Satellite monitoring (Global Forest Watch, Planet Labs) helps for deforestation/land use, but not for species/ecosystem condition.
• Assurance challenges: Auditors lack standardized assurance procedures for nature data. Third-party verification exists for specific certifications (FSC, MSC, RSPO) but not for comprehensive TNFD disclosures.

Governance: Who Owns Climate vs. Nature Disclosures Internally

TCFD/Climate Disclosure Ownership

• Board level: Climate oversight typically assigned to Audit Committee, Risk Committee, or dedicated Sustainability Committee.
• Executive level: Chief Sustainability Officer (CSO) or Chief Risk Officer (CRO) accountable for climate strategy and disclosure. In energy/heavy industry, CEO often directly accountable.
• Operational level: Cross-functional team: Sustainability/ESG team (owns disclosure), Finance/Investor Relations (integrates into financial reporting), Risk Management (climate risk assessment), Operations (emissions data collection, reduction initiatives).

TNFD/Nature Disclosure Ownership

• Board level: Same committees as climate (often combined climate-nature oversight), but some companies establishing separate Nature/Biodiversity Committee.
• Executive level: CSO typically owns nature disclosure, but companies with significant land/water footprints (agriculture, forestry, mining, real estate) may assign to Chief Operating Officer (COO) or business unit leaders.
• Operational level: Requires broader cross-functional collaboration than climate: Sustainability (owns LEAP process and disclosure), Procurement/Supply Chain (value chain dependencies/impacts), Site Operations (local biodiversity monitoring, stakeholder engagement), Legal/Compliance (Indigenous rights, land tenure, regulatory risks), Community Relations (IPLC engagement).

TNFD recommendations encourage companies to produce integrated climate-nature disclosures, rather than just nature disclosures; idea is TNFD biodiversity and nature-loss data will complement companies' existing climate disclosures. (Source)

Overlaps and Integration: Reporting Both Frameworks Together

Where TCFD and TNFD Align (Governance, Risk Management Structure)

1. Same 4-Pillar Architecture

TNFD adopted TCFD's structure intentionally. Companies already reporting under TCFD can extend their disclosure architecture to include nature:

• Governance section: Expand board oversight description to include nature alongside climate (same committee, same frequency of discussion).
• Strategy section: Add nature-related risks/opportunities alongside climate risks (same time horizons, same strategic planning integration).
• Risk Management section: Describe how LEAP (nature) and scenario analysis (climate) are both integrated into enterprise risk management.
• Metrics & Targets section: Report climate metrics (GHG, carbon intensity) and nature metrics (land/water footprint, species affected) side by side.

2. Overlapping Risk Categories

• Physical risks: Climate change drives nature degradation (droughts killing forests, ocean acidification harming marine ecosystems), which in turn creates dependency risks (water scarcity, fishery collapse). TCFD and TNFD physical risks are interconnected.
• Transition risks: Carbon pricing and biodiversity regulations often overlap (e.g., EU deforestation regulation addresses both climate and nature; peatland protection addresses both carbon sequestration and biodiversity).
• Systemic risks: Both climate and nature are systemic risks affecting entire economies/financial systems, requiring portfolio-level assessment by investors.

3. Common Disclosure Principles

TCFD principles for effective disclosure (7 principles): Disclosures should be: (1) relevant, (2) specific and complete, (3) clear, balanced, and understandable, (4) consistent over time, (5) comparable among companies within a sector/industry/portfolio, (6) reliable, verifiable, and objective, (7) provided on a timely basis. (Source) TNFD adopts these same principles, ensuring consistency in disclosure quality expectations.

Where They Diverge (Metrics, Data Sources, Geographic Specificity)

1. Metrics and Data

• TCFD: Single primary metric (GHG emissions in tonnes CO₂e), supplemented by carbon intensity, carbon price exposure, climate-related revenue/costs. Data sources: energy bills, operational records, GHG databases.
• TNFD: Multiple metrics across different dimensions (biodiversity: species richness, ecosystem extent; water: consumption vs. availability; land: hectares in high-value ecosystems; pollution: nutrient/pesticide loads). Data sources: geospatial data, field surveys, supply chain traceability, satellite imagery.

2. Geographic Granularity

• TCFD: GHG emissions are global (CO₂ emitted anywhere contributes equally to global warming). Geographic disclosure focuses on physical risk exposure (e.g., "30% of assets in coastal flood zones") but not on operational location-by-location detail.
• TNFD: Nature impacts are location-specific. TNFD requires disclosure of "priority locations" (countries, biomes, watersheds) where material nature interactions occur. This is more geographically granular than typical TCFD disclosure.

3. Stakeholder Engagement

• TCFD: Stakeholder engagement not explicitly required (though good practice for understanding climate risks).
• TNFD: Mandatory disclosure on engagement with Indigenous Peoples, Local Communities, and affected stakeholders. This adds a social dimension absent from TCFD.

4. Materiality Lens

• TCFD: Financial materiality (single materiality).
• TNFD: Double materiality (financial + impact).

How to Produce Integrated Climate-Nature Disclosures

Approach 1: Unified Sustainability Report

Publish a single sustainability or integrated report with separate but adjacent TCFD and TNFD sections:

• Section 1: Governance — describe board/management oversight of both climate and nature.
• Section 2: Climate Strategy — TCFD disclosures (climate risks, scenario analysis, GHG targets).
• Section 3: Nature Strategy — TNFD disclosures (nature dependencies/impacts, LEAP assessment, biodiversity targets).
• Section 4: Integrated Risk Management — describe how climate and nature risks are assessed together (e.g., climate scenario analysis informs nature risk assessment; LEAP priority locations inform climate physical risk assessment).
• Section 5: Metrics & Targets — report climate metrics (GHG) and nature metrics (land/water/biodiversity) in parallel, with cross-references where they interact (e.g., reforestation contributes to both carbon sequestration and biodiversity targets).

Approach 2: Integrated Narrative (Climate-Nature Nexus)

Some leading companies are producing fully integrated climate-nature disclosures that emphasize interconnections:

• Example: "Our water stewardship strategy addresses both climate adaptation (water scarcity from changing precipitation patterns) and nature risk (aquifer depletion affecting freshwater ecosystems). We reduced water consumption by 25% (2020-2024), achieving 40% reduction in water stress footprint (TNFD metric) and 15% reduction in Scope 3 GHG emissions from reduced water treatment (TCFD metric)."

Approach 3: Separate Reports with Cross-References

Companies with extensive climate and nature data may publish separate reports (TCFD Climate Report, TNFD Nature Report) but include cross-references:

• TCFD report: "Our climate physical risk assessment identified water stress as a material risk at 8 facilities. For detailed analysis of water dependencies and ecosystem impacts, see TNFD Nature Report, Section 3: Priority Locations."
• TNFD report: "Our deforestation-free sourcing commitment contributes to climate mitigation (avoiding 2.5M tonnes CO₂e/year from land use change). For climate impact quantification, see TCFD Climate Report, Section 4: GHG Emissions."

Case Studies (2 Worked Examples)

Case Study A: Financial Institution Adopting TNFD Alongside Existing TCFD/ISSB S2 Disclosures

Case Study B: Mining Company Using LEAP to Assess Nature Dependencies at Site Level

Devil's Advocate (7 Objections to TNFD Requirements)

Objection 1: Data Availability — Biodiversity Metrics Are Immature and Inconsistent

The objection: Unlike GHG emissions (standardized, auditable, globally comparable), biodiversity and ecosystem metrics are fragmented, inconsistent, and often unavailable. No universal "nature footprint" metric exists (equivalent to carbon footprint). Companies face competing methodologies (Corporate Biodiversity Footprint, Biodiversity Impact Metric, Mean Species Abundance, etc.) with different outputs. Supply chain biodiversity data is nearly impossible to obtain for tier 2+ suppliers. This makes TNFD disclosure subjective, non-comparable, and unreliable for investor decision-making.

When valid: Partially valid. Biodiversity metrics are less mature than GHG metrics. Standardization efforts (Science-Based Targets for Nature, TNFD metrics working group) are ongoing but not yet universally adopted. Supply chain data gaps are real, especially for globally dispersed agricultural/forestry supply chains.

Mitigation: TNFD does not prescribe specific metrics—it requires companies to disclose the metrics they use, with clear methodologies and assumptions. This flexibility allows companies to adopt metrics suited to their context (e.g., water stress for beverage companies, species richness for mining companies) while transparency enables comparability over time (trend data). As adoption scales, best-practice metrics will emerge through market convergence (similar to GHG Protocol's emergence for carbon). Companies should: (1) Use internationally recognized data sources (IBAT, ENCORE, WRI Aqueduct) for location-based assessments, (2) Engage suppliers to improve value chain data (tier 1 first, expanding to tier 2+ over 3-5 years), (3) Clearly disclose data limitations and estimation methods (e.g., "Land footprint estimated using industry-average coefficients for tier 2 suppliers, representing 40% of total footprint").

Objection 2: Double Reporting Burden — TNFD Adds Complexity Without Clear ROI

The objection: Companies already face overwhelming ESG reporting demands: TCFD/IFRS S2 (climate), CSRD/ESRS (EU sustainability), GRI (impact), SASB (financially material topics), CDP (climate/water/forests), UN SDGs, sector-specific standards. Adding TNFD creates incremental reporting burden (18-24 months for LEAP implementation, significant costs for consultants/data systems/assurance) with unclear return on investment. TNFD is voluntary—why prioritize it over mandatory requirements?

When valid: Valid concern for resource-constrained companies, especially those not in high-nature-dependency sectors. For a software company with minimal land/water footprint, TNFD may be low priority vs. mandatory climate/human rights disclosures.

Mitigation: TNFD is designed to integrate with existing frameworks, not replace them. Companies reporting under EU CSRD/ESRS E4 (biodiversity) or IFRS S1 (general sustainability) can use TNFD as the operational framework—reducing duplication. TNFD aligned with Global Biodiversity Framework (Target 15); consistent with language and approach of IFRS S1. (Source) TNFD encourages integrated climate-nature disclosures, rather than separate reports. (Source) ROI: Early adopters gain competitive advantages (investor preference, access to green finance, regulatory preparedness, brand differentiation). Companies should prioritize TNFD if: (1) high nature dependency/impact (agriculture, mining, forestry, water-intensive industries), (2) significant investor pressure, (3) operations in regions with emerging nature regulations (EU, UK). For low-priority sectors, monitor regulatory trajectory and defer until mandatory.

Objection 3: Complexity for Non-Specialists — LEAP Requires Expertise Most Companies Lack

The objection: LEAP requires understanding of biodiversity science, geospatial analysis, ecosystem service economics, and stakeholder engagement methodologies. Few companies have in-house expertise in ecology, conservation biology, or Indigenous rights. This creates dependency on expensive consultants and risks superficial "check-box" LEAP implementation without genuine risk understanding.

When valid: Valid. TNFD is more technically complex than TCFD for most companies (GHG accounting is now routine; biodiversity assessment is not). Smaller companies (<$1B revenue) may lack resources for comprehensive LEAP.

Mitigation: TNFD provides extensive guidance materials (80+ sector-specific guidance documents, case studies, webinars) to support implementation. Companies can adopt phased approach: (1) Year 1: Locate (use free tools like IBAT, ENCORE to identify priority locations—achievable with sustainability team + basic GIS support), (2) Year 2: Evaluate (engage consultants for priority location assessments—targeted spending vs. full portfolio), (3) Year 3: Assess + Prepare (develop strategy and targets). Industry associations (mining associations, agricultural commodity roundtables) are developing shared LEAP methodologies and data platforms, reducing per-company costs. For SMEs, industry-average data or simplified LEAP approaches (TNFD developing "LEAP-lite" for smaller enterprises) can provide 80% of value with 20% of effort.

Objection 4: Lack of Mandatory Enforcement — Voluntary Framework Has Limited Teeth

The objection: TNFD is voluntary. Without regulatory mandate (like TCFD's integration into IFRS S2 and EU/UK regulations), adoption will be limited to ESG leaders. Laggards—often the companies with highest nature impacts—will avoid disclosure, creating adverse selection (only "good" companies disclose, concealing systemic risk). Investors cannot force disclosure without regulatory backing, limiting TNFD's effectiveness.

When valid: Valid in short term (2024-2026). Voluntary frameworks do face adoption gaps vs. mandatory requirements.

Mitigation: TNFD is on similar trajectory as TCFD. TCFD was voluntary (2017-2021) but gained rapid adoption due to investor pressure, leading to regulatory integration (IFRS S2, EU ESRS, UK mandate) by 2023. TNFD is likely to follow same path: (1) 2024-2026: Voluntary adoption by early adopters (300+ organizations committed as of Sept 2023), (2) 2025-2027: Incorporation into regulations (EU ESRS E4 already aligns with TNFD; UK/France/Canada consulting on nature disclosure mandates for 2026-2028), (3) 2028-2030: Mandatory disclosure for large companies in major jurisdictions. Investors can accelerate this by: (1) Requiring TNFD disclosure in engagement (e.g., Climate Action 100+ model for nature), (2) Integrating nature risk into credit ratings/lending decisions (banks increasingly requesting TNFD data for loan underwriting), (3) Advocating for regulatory mandates. Companies adopting now will be ahead of regulatory curve, avoiding rushed compliance later.

Objection 5: Geographic Data Sensitivity — Disclosing Priority Locations Creates Security/Competitive Risks

The objection: TNFD requires disclosure of "priority locations" where material nature interactions occur. For mining/oil & gas companies, this means revealing exploration sites, resource deposits, or operational locations that are commercially sensitive (competitors could use location data to identify valuable reserves). For companies operating in conflict zones or high-crime regions, disclosing facility locations creates security risks (kidnapping, sabotage, theft). Indigenous communities may not want their territories publicly identified (privacy, land rights disputes).

When valid: Valid for specific contexts: (1) Pre-commercial exploration sites (greenfield projects not yet public), (2) Operations in conflict/high-crime regions (e.g., mining in DRC, forestry in Amazon), (3) Indigenous territories where communities have not consented to public disclosure.

Mitigation: TNFD allows geographic disclosure at appropriate granularity. Companies need not disclose GPS coordinates—disclosure at country, state/province, or biome level may suffice for most purposes (e.g., "Operations in Cerrado biome, Brazil" rather than exact farm coordinates). For commercially sensitive sites, disclose general location categories (e.g., "3 exploration sites in West Africa, specific locations withheld due to commercial sensitivity"). For security-sensitive locations, aggregate data (e.g., "Operations in 5 high-biodiversity regions; detailed location data available to investors under NDA upon request"). Engage Indigenous communities before disclosure to obtain consent (TNFD requires this under IPLC engagement disclosure). If consent not obtained, disclose that engagement occurred but location data withheld at community request.

Objection 6: Supply Chain Opacity — Upstream Nature Impacts Are Unverifiable

The objection: TNFD requires disclosure of value chain nature impacts (upstream and downstream). For companies with global, multi-tier supply chains (food, apparel, electronics), tracing nature impacts to raw material origin is practically impossible. Example: A chocolate manufacturer sources cocoa through traders who aggregate from thousands of smallholder farms across West Africa—tracing deforestation or pesticide use to farm level is infeasible without prohibitive investment in traceability systems (satellite monitoring, farm audits). This makes value chain disclosure speculative and unverifiable.

When valid: Valid for complex, fragmented supply chains. Agricultural commodities (cocoa, coffee, palm oil), minerals (cobalt, lithium), and textiles (cotton) are particularly challenging.

Mitigation: TNFD does not require 100% supply chain transparency immediately. Companies should adopt risk-based approach: (1) Prioritize high-risk commodities (deforestation-linked: soy, palm oil, beef, timber; water-intensive: cotton, rice; biodiversity-sensitive: seafood, minerals from protected areas), (2) Start with tier 1 suppliers (direct suppliers, typically 70-90% of spend), requiring them to disclose sourcing locations and nature impacts, (3) Use available traceability tools (Trase for agricultural commodities, satellite monitoring for deforestation, certification schemes like RSPO/FSC as proxies for lower risk), (4) Disclose limitations transparently (e.g., "We traced 60% of soy sourcing to farm level; remaining 40% traced to municipality level using trader data; deforestation estimates for municipality-level data based on regional averages"). Progressive improvement: set targets for supply chain transparency (e.g., "80% of high-risk commodities traceable to origin by 2028") and report annually on progress. Over 5-10 years, traceability technology (blockchain, satellite monitoring, DNA barcoding) will improve, reducing costs and increasing feasibility.

Objection 7: Audit Readiness — No Established Assurance Standards for Nature Data

The objection: TCFD/IFRS S2 climate disclosures increasingly require assurance (limited or reasonable). Auditors have developed GHG assurance methodologies (ISO 14064-3, AA1000, ISAE 3410) over 15+ years. No equivalent assurance standards exist for nature data (biodiversity metrics, ecosystem condition, land/water footprints). Auditors lack expertise in ecology/conservation biology. Without assurance, TNFD disclosures risk being dismissed as unverified greenwashing, undermining credibility.

When valid: Valid. Nature data assurance is immature. Auditors (Big 4, specialized sustainability assurance firms) are developing capabilities but not yet at scale.

Mitigation: TNFD does not currently mandate assurance (voluntary framework), but companies should prepare for eventual assurance requirements by: (1) Establishing robust data governance (documented methodologies, data sources, quality controls, audit trails—same rigor as financial data), (2) Engaging auditors early to co-develop assurance approaches (limited assurance initially, progressing to reasonable assurance as standards mature), (3) Using third-party verification for specific data points (e.g., certified land use data from satellite providers like Planet Labs, water consumption verified by external engineers, species data verified by conservation scientists). Industry initiatives (TNFD assurance working group, IAASB exploring nature assurance standards) will develop assurance frameworks over 2025-2027, similar to GHG assurance evolution. Early adopters can pilot assurance (even if voluntary) to build credibility and prepare for future mandates.

Outlook to 2027–2030

TNFD Adoption Trajectory: Voluntary → Regulatory Integration

2024-2025: Early Adopter Phase

• 300+ organizations committed to TNFD adoption as of September 2023 launch (financial institutions, corporates, service providers). (Source)
• Focus on learning, piloting LEAP, developing internal capabilities. First-mover advantage for sustainability leaders (investor recognition, green finance access).
• Data providers (Iceberg Data Lab, Eco Extract, NatureMetrics, S&P Global) expanding nature data coverage to support TNFD adoption.

2025-2027: Mainstream Adoption + Regulatory Incorporation

• EU: ESRS E4 (Biodiversity and Ecosystems) mandatory from 2025 for large companies under CSRD. ESRS E4 aligns with TNFD (dependencies, impacts, risks, opportunities framework), making TNFD the de facto implementation guide for EU compliance. Expected: >10,000 EU companies publishing nature disclosures by 2026.
• UK: UK government consulting on mandatory nature disclosure requirements (2025 consultation, potential 2026-2027 implementation for large listed companies). Likely to reference TNFD as recommended framework, similar to TCFD mandate.
• France: Article 29 (climate/ESG reporting for financial institutions) expanding to nature-related financial risk (2026 anticipated). French financial regulator (AMF) may require TNFD-aligned disclosure for asset managers, banks, insurers.
• Canada: Canadian Securities Administrators (CSA) considering sustainability disclosure requirements (climate + nature) aligned with IFRS S1/S2 + TNFD (2026-2027 timeline).
• Investor mandates: Major institutional investors (e.g., Norges Bank, APG, CalPERS, CDPQ) incorporating TNFD into engagement policies. By 2027, expect >50% of global top 100 asset managers requesting TNFD disclosure from portfolio companies.

2027-2030: Regulatory Mandate + Convergence with ISSB

• ISSB nature standard: IFRS Foundation/ISSB is monitoring TNFD implementation and may develop IFRS S3 (Nature-related Disclosures) by 2027-2028, similar to IFRS S2 for climate. TNFD would likely be integrated into IFRS S3, creating global baseline for nature disclosure (analogous to TCFD → IFRS S2 path).
• Global Biodiversity Framework alignment: Countries reporting progress on Global Biodiversity Framework Target 15 (requiring large businesses to disclose biodiversity risks, dependencies, impacts) may mandate TNFD-aligned disclosure as national implementation mechanism (anticipated: Australia, New Zealand, EU member states, UK, Japan).
• Supply chain cascading: As large corporates adopt TNFD, disclosure requirements will cascade to suppliers (tier 1 → tier 2+), similar to GHG Scope 3 reporting evolution. By 2030, expect mid-sized companies in nature-intensive sectors (agriculture, forestry, materials) facing de facto TNFD requirements via customer mandates.
• Credit rating integration: S&P, Moody's, Fitch incorporating nature risk into credit ratings (pilot programs 2024-2026, mainstream integration 2027-2030). Companies with high nature risk and weak disclosure may face credit downgrades, increasing borrowing costs (10-30 basis points premium for high-nature-risk issuers without TNFD disclosure).

Convergence with ISSB Standards and Regional Regulations

TNFD-IFRS Alignment

TNFD aligned with Global Biodiversity Framework (Target 15); consistent with language and approach of IFRS S1. (Source) ISSB and TNFD are coordinating to ensure interoperability:

• TNFD uses IFRS S1 terminology (enterprise value, material information, primary users of financial reports), ensuring consistency with ISSB framework.
• ISSB published staff paper (February 2025) analyzing TNFD recommendations as potential input for future ISSB nature standard. (Source)
• Expected convergence: IFRS S3 (if developed) would adopt TNFD's 4-pillar structure, 14 disclosures, LEAP approach, but with more prescriptive requirements (similar to how IFRS S2 built on TCFD but added mandatory scenario analysis and Scope 3).

Regional Regulation Harmonization

• EU ESRS vs. TNFD: High alignment. ESRS E4 covers biodiversity and ecosystems using similar DIRO framework (dependencies, impacts, risks, opportunities). Companies reporting under ESRS E4 can use TNFD guidance for implementation. However, ESRS requires double materiality (mandatory); TNFD allows single materiality (flexible)—companies should apply double materiality to satisfy both.
• UK vs. TNFD: UK likely to reference TNFD directly in regulations (as it did with TCFD), creating high consistency.
• US fragmentation: No federal nature disclosure mandate likely before 2027-2028 (political barriers). California may lead with state-level nature disclosure requirements (expanding beyond climate under SB 253/261 framework). US companies with EU/UK operations will adopt TNFD for those markets, creating de facto US adoption for multinationals.

Digital Disclosure Platforms and Nature Data Providers

1. Machine-Readable Nature Data

• TNFD developing digital data template (XML/JSON schema) for nature disclosures, enabling automated data exchange between companies, investors, regulators (similar to ECO Platform for TCFD/IFRS S2). Expected launch: 2026.
• Integration with ESG data platforms (Bloomberg, Refinitiv, MSCI, Sustainalytics) to aggregate TNFD disclosures into investor-facing datasets. By 2028, expect TNFD data available in standard ESG data feeds.

2. Geospatial and Satellite Data Providers

• Companies like Planet Labs, Satellogic, ICEYE providing high-resolution satellite imagery for deforestation monitoring, land use change, water body extent, infrastructure footprint. Subscription costs declining (now $5,000-50,000/year for corporate users, vs. $100,000+ in 2020), making satellite monitoring accessible to mid-sized companies.
• AI-powered analysis (computer vision) automating land use classification, biodiversity habitat mapping, reducing manual analysis costs by 60-80%.

3. Biodiversity Data Aggregators

• Platforms like IBAT Alliance (partnership of IUCN, UNEP-WCMC, Conservation International, BirdLife) providing subscription access to global biodiversity datasets (protected areas, Key Biodiversity Areas, threatened species ranges). Corporate subscriptions: $10,000-100,000/year depending on coverage.
• Emerging: DNA environmental sampling (eDNA) services (e.g., NatureMetrics) for site-level biodiversity assessment (identifying species from water/soil samples), costs declining from $50,000+ per site to $10,000-20,000 (2025-2027 trajectory).

4. Supply Chain Traceability Platforms

• Trase (Transparency for Sustainable Economies): Free platform tracing agricultural commodities (soy, beef, palm oil) to sub-national origins using trade flow analysis. Expanding coverage to cocoa, coffee, timber (2025-2027).
• Blockchain traceability (Provenance, IBM Food Trust): Pilot programs tracking deforestation-free commodities from farm to consumer. Costs still high ($50,000-500,000 implementation), but declining as technology matures.

Market Forecast: TNFD Penetration by 2030

• Europe: 70-80% of large companies (>€500M revenue) publishing TNFD-aligned disclosure by 2030, driven by ESRS E4 mandate + investor pressure. Voluntary adoption by 30-40% of mid-sized companies (€100-500M revenue).
• North America: 40-50% of large public companies (>$1B market cap) in nature-intensive sectors (agriculture, mining, forestry, water utilities) publishing TNFD disclosure by 2030, driven by investor engagement + state regulations (California, New York). Federal mandate unlikely before 2030.
• Asia-Pacific: 30-40% penetration in developed markets (Australia, Japan, Singapore, South Korea) by 2030, driven by IFRS S3 adoption (if developed) + investor pressure. Lower penetration in China/India (10-20%) unless domestic regulations mandated.
• Financial sector: 60-70% of global top 100 asset managers, 50-60% of global systemically important banks (G-SIBs) publishing TNFD disclosure by 2030, driven by financial stability concerns (central banks, FSB) + fiduciary duty evolution.

What Companies Should Do Now (2025-2027 Roadmap)

1. Assess materiality (2025): Conduct TNFD Locate phase (Phase 1 of LEAP) to identify whether nature is material to your business. Use free tools (IBAT, ENCORE). If high nature dependency/impact, proceed to full LEAP. If low materiality, monitor regulatory trajectory and defer.
2. Pilot LEAP for priority locations (2025-2026): Select 1-3 priority locations (highest biodiversity value, highest operational/financial concentration) and conduct full LEAP assessment. Build internal capabilities, test data systems, engage stakeholders.
3. Integrate with TCFD/climate strategy (2026): Identify overlaps (water scarcity, land use, carbon sequestration). Develop integrated climate-nature strategy and disclosure (unified sustainability report). TNFD encourages integrated climate-nature disclosures. (Source)
4. Set nature targets (2026-2027): Align with Global Biodiversity Framework (30x30, nature-positive by 2030) and Science-Based Targets for Nature (if applicable to sector). Publicly commit to targets in sustainability report.
5. Publish first TNFD disclosure (2027): Target: 2027 sustainability report includes comprehensive TNFD-aligned disclosure (14 recommended disclosures, integrated with TCFD). Obtain limited assurance if feasible.
6. Scale to full portfolio (2027-2030): Expand LEAP from pilot locations to all material locations. Cascade requirements to suppliers (tier 1 by 2028, tier 2 by 2030). Transition from limited to reasonable assurance (2029-2030).