Taskforce on Nature-related Financial Disclosures

Why is Nature-Related Financial Reporting Important?

Nature is fundamental to human wellbeing, a healthy planet, and economic prosperity. Nature provides us with many services that we often take for granted. Think of the flow of fresh water and the pollination services of bees. According to the World Economic Forum, more than half the world’s GDP is moderately or highly dependent on nature and its resources or “ecosystem services”, making the financial system vulnerable to the domino effect of nature loss.

Unfortunately, nature is in crisis as biodiversity is declining at pace. In September 2024, the Planetary Boundaries Science (PBScience) team launched the first-ever edition of the annual Planetary Health Check report which establishes parameters to “prevent dangerous, large-scale abrupt or irreversible environmental changes.” The latest research reveals that six of the nine planetary boundaries are now substantially breached, including “biosphere integrity” and boundaries relating to the functioning of land and freshwater systems.

What is the TNFD?

The Taskforce on Nature-related Financial Disclosures (TNFD), launched in June 2021 with the support of the G20, has developed a set of recommendations and guidance to help businesses and financial institutions assess, manage, and report on their dependencies, impacts, risks, and opportunities related to nature.

By following these recommendations, organizations can better integrate nature-related considerations into their decision-making processes. The TNFD recommendations and guidance aim to empower decision-makers in business and finance with high-quality information through corporate reporting on nature, which enhances risk management at both the enterprise and portfolio levels. Ultimately, this aims to support a global shift in financial flows away from nature-negative impacts and towards nature-positive outcomes.

The TNFD, co-chaired by David Craig and H.E. Razan Al Mubarak, is a market-led, science-based and government-backed initiative, and consists of over 40 senior executives from companies and financial institutions, which make up the Taskforce. The TNFD published its 14 recommended disclosures in September 2023.

More information can be found at www.tnfd.global.

Canadian Regulatory Landscape

The regulatory landscape for nature and biodiversity reporting is evolving quickly, reflecting broader global momentum toward mandatory biodiversity and natural capital disclosures. Canada recently announced the development of a sustainable finance taxonomy and plans to mandate climate disclosure standards for large, federally incorporated private companies. These moves are expected to enhance transparency and accountability for both companies and investors. Canada’s federal policies, including the 2030 Biodiversity Strategy, the Nature Accountability Bill, and the Canadian Net-Zero Emissions Accountability Act, highlight the importance of biodiversity and nature, and governmental support for global frameworks including the TNFD.

What is the TNFD Canadian Consultation Group?

The TNFD has a growing network of national and regional Consultation Groups that help expand the TNFD’s continued outreach and engagement across the world. As Canadian Consultation Group convenors, ISF and CPA Canada engage with financial institutions, corporate actors, civil society organizations, local communities, and public sector institutions in Canada to:

Build awareness and capacity on nature and the TNFD;
Support organizations to build the business case for TNFD-aligned reporting, and facilitate discussions across peer groups regarding experience and recommendations;
Coordinate and collect feedback from Canadian organizations, and provide answers to questions on the TNFD recommendations and guidance; and,
Engage with Indigenous Peoples, Local Communities, and affected stakeholders.

If you are interested in joining the Canadian Consultation Group or learning more, please e-mail maya.saryyeva@queensu.ca.

Discussions with Canadian businesses and financial institutions continue in both the public and private sectors, and Canadian organizations have begun publicly declaring themselves TNFD Adopters. Many more are in various stages of their nature-reporting journey.

What TNFD resources are available?

TNFD offers a range of resources to help organizations incorporate nature-related considerations into corporate reporting:

TNFD recommendations: these provide general requirements for nature-related disclosures structured around the four disclosure pillars of governance, strategy, risk & impact management, and metrics & targets, aligning with the structure of the well-established Task Force on Climate-Related Financial Disclosures (TCFD) recommendations for climate.
LEAP approach (Locate, Evaluate, Assess and Prepare): An integrated approach to identify and assess nature-related issues.
Sector guidance: TNFD supplements the LEAP approach with sector and metric guidance for over 16 sectors.
TNFD Capacity Building materials are available in the Knowledge Hub, including the recently-launched TNFD Learning Lab and TNFD Trainer Portal.
TNFD Webinar Library: A library of helpful webinars and past events to help organisations get up to speed on the TNFD.
TNFD Case Study Library: Real-world examples of how nature-related dependencies, impacts, risks and opportunities manifest, and insights into how organizations apply and interpret the TNFD recommendations and guidance.
Join hundreds of organizations worldwide and become a TNFD Adopter by registering your intention to make TNFD-aligned disclosures in your corporate reporting.

If you are interested in learning more, you can apply to become a TNFD Forum Member.

Conclusion

Perhaps you recall the global ozone crisis of the late 1980s, when chemicals known as chlorofluorocarbons or CFCs found in common household products were discovered to be depleting the ozone layer. In response, companies, communities, and governments worldwide took decisive action, leading to the Montreal Protocol. Over time, the ozone layer began to heal – proof that when we work in concert, meaningful change is possible.

By embedding nature into global financial and business systems, the TNFD fosters transparency, resilience, and accountability, safeguarding the ecosystems that underpin our economies and societies while influencing capital flows toward nature-positive innovation and outcomes.

The path to a nature-positive future is on our hands – let’s take it together.