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TNFD Update Allows Varying Approaches to Materiality

V0.3 of nature risks and disclosure framework also covers nature-focused metrics, target-setting and supply chain traceability. 

The Taskforce on Nature-related Financial Disclosures (TNFD) has published its third beta framework (v0.3) for nature-related risk management and disclosures, as well as two discussion papers outlining scenarios and societal considerations relevant to nature-focused reporting.  

“For businesses, investors and governments that have invested billions in their net zero transition plans, nature is the best ally to help address those climate concerns,” TNFD Executive Director Tony Goldner said during a webinar launching the next edition of the framework.  

“We are providing stakeholders with support and guidance on how to bring nature into their existing risk management processes.” 

V0.3 follows the publication of two previous beta frameworks in March and June this year, which covered themes such as measuring and disclosing location-based impacts and risks, assessment metrics to support pilot testers, and dependency and impact evaluations.  

The latest iteration includes an adaptive approach to the application of TNFD’s disclosure recommendations to accommodate the varying materiality and reporting preferences and needs of report preparers. The TCFD said this would support early action by companies and financial institutions “and encourage increasing disclosure ambition over time”.

Following previous feedback from stakeholders, it has further proposed new disclosure recommendations for supply chain traceability and the alignment of an organisation’s climate and nature targets.  

TNFD has also published draft guidance for nature-related target-setting, which was co-developed with the Science Based Targets Network (SBTN).  

“Tremendous interest” 

The TNFD framework builds on the four core pillars of the Taskforce on Climate-related Financial Disclosures (TCFD) for corporates and investors, and is expected to be incorporated into the disclosure standards of existing sustainability standards bodies and national laws.  

“There is now tremendous interest in reporting on nature, even as it’s recognised as one of the most difficult areas to report on,” said Goldner.  

“The climate movement started off on its own, and now the rest of the nature is really catching up.” 

The final beta framework (v0.4) is due to be published in March 2023, and is expected to provide additional guidance on disclosure metrics, measurement of impacts, dependencies and risks across supply chains, and the sector-specific reporting requirements, including agriculture, aquaculture and mining.  

TNFD’s framework will then be finalised in September 2023.  

V0.3 has been published ahead of the UN Convention on Biological Diversity’s (CBD) summit in Montreal next month, at which the details of the Global Biodiversity Framework (GBF) are expected to be finalised. The GBF is often referred to as nature’s Paris Agreement, and the final version is expected to include a commitment to protect at least 30% of the planet’s land and oceans by 2030.  

Goldner said that the TNFD is continuing to track the developments of the GBF, noting that TNFD Co-Chair Elizabeth Mrema’s dual role as Executive Secretary of CBD has allowed for natural consideration of alignment between the two frameworks.  

“The TNFD framework is evolving in a direction that is well aligned not only with emerging regulatory and standard setting approaches but also with global policy goals currently being negotiated as the GBF,” said Mrema.  

“I am confident that the TNFD framework can be the practical connective tissue between global political commitment to act on nature loss represented by the GBF and the mobilisation of business and finance action through better risk management and capital deployment.” 

This article was updated on 14 November to more accurately reflect the approach to materiality taken in latest version of the TNFD’s framework. 

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