The past thirty years, wildlife populations have noticed a major decline, according to the numbers shown on WWF’s 2024 Living Planet Report. Businesses and financial institutions need to include the Taskforce on Nature-related Financial Disclosures (TNFD) framework in their decisions and nature-focused thinking. Nature’s role depends heavily on global GDP, and so far, traditional reporting systems haven’t really captured the full picture.
The TNFD framework changes this by tracking nature-based resources like water, soil, and pollination and monitoring environmental effects such as deforestation and habitat loss. Organizations can now better report their nature-related risks through this disclosure framework, which looks at both challenges and opportunities.
Read how the TNFD reporting framework transforms ESG reporting as it moves beyond just climate concerns to include broader nature-related risks and create new possibilities for businesses across the globe.
The “E” in ESG has focused on climate change and carbon emissions for decades. A parallel catastrophe is currently intensifying: the loss of nature and biodiversity is accelerating. Businesses need a complete approach to sustainability reports that does not only include climate metrics.
Financial reports aimed at shareholders and sustainability reports targeted at other stakeholders don’t work well anymore. Climate-only frameworks can’t capture every environmental factor affecting business operations. Critical risks like deforestation, ecosystem collapse, and species extinction need different measurements beyond climate metrics. Companies have a difficult time covering environmental aspects at once. Their reports end up broad but shallow instead of solving specific issues. We end up with countless metrics created without teaching us about nature-related risks.
The World Economic Forum’s 2025 Global Risks Report places biodiversity loss and ecosystem collapse among the most urgent global risks for the next decade. This shows mounting proof that nature-related risks threaten economies financially. The Green Finance Institute’s analysis shows the UK’s GDP could fall 6–12% by 2030 due to damage to the natural environment. Companies create major blind spots in financial risk assessment by ignoring these risks.
The Taskforce on Nature-related Financial Disclosures started back in 2019-2020 after experts realized nature-related risks threatened economies just like climate risks. TNFD supports all three ESG pillars, unlike climate-only frameworks, and it expands environmental considerations beyond emissions and energy to cover biodiversity, ecosystems, water, land use, and waste. Companies can use its 14 specific disclosures across four pillars to show how nature affects their decisions. TNFD doesn’t replace climate initiatives—it broadens the ESG agenda. Biodiversity and ecosystem health become core topics, and companies learn to handle both climate and nature through an integrated approach.
Companies need fundamental changes to their structures and processes to put the TNFD framework into practice. That means that a climate-focused approach alone is not enough. Their risk management systems should tackle both biodiversity and carbon emissions together.
Companies starting their nature-based trip need to grasp how nature-related risks flow to financial institutions through three main drivers: physical, transition, and liability risks. Physical risks come straight from nature degradation. Transition risks pop up from poor alignment with nature protection policies. Liability risks surface when parties want compensation for environmental damage. Nature risk assessment brings bigger challenges than climate risk management. Its multi-dimensional character and less developed model complicate it. Smart companies build on their existing climate frameworks. Those with TCFD disclosure reporting experience can add nature to their TNFD responses. They do this by expanding their climate assessment processes. This mix needs constant updates as nature risk management methods grow.
The board’s oversight begins by weaving nature into strategic planning and risk processes. Boards should treat biodiversity risks as key financial matters. These need to show up in both financial and non-financial statements. Directors do their job by checking if risk management looks at biodiversity dependencies. They make sure that material impacts shape strategy and decisions. A solid governance structure shows nature isn’t just a lovely idea—it’s crucial for business. This needs clear board and committee roles. Nature must blend into governance frameworks with accountability spread across management.
Shared stakeholder participation is the lifeblood of good nature-related risk management. Companies should spot both “communities of place” (local groups) and “communities of interest” (far-off stakeholders with relevant interests). The best ways include drawing stakeholder maps and running impact-influence studies. Setting up co-design groups brings different viewpoints together with scientific and local knowledge. TNFD’s approach pushes for shared governance. Affected stakeholders become partners in gathering and studying data. This team effort will give credibility to targets and metrics. People most affected will see their interests reflected, leading everyone toward nature-positive results.
TNFD’s market adoption has grown substantially, as over 500 organizations from 54 countries now plan to report based on TNFD recommendations. The numbers show a 57% jump since January 2024.
TNFD has completed sector guidance for 13 sectors. New additions include beverages, apparel, construction materials, and real estate. This guidance now covers half of SICS industries. In June 2025, TNFD released new sector guidance for fishing, marine transportation, cruise lines, and water utilities and services.
Major financial institutions have become TNFD adopters. This includes all but one of these globally systemically important banks. Companies now look at TNFD because investors want to see nature risk assessments. The business potential looks promising—nature-positive changes in food, land, and ocean sectors could generate almost GBP 2.86 trillion in yearly revenue or cost savings by 2030.
The UK government has pledged GBP 4.8 million to help implement TNFD (2021-2025). TNFD’s approach now merges with the EU’s Corporate Sustainability Reporting Directive through ESRS. The ISSB made an announcement in 2024 that “biodiversity, ecosystems, and ecosystem services” will become its next key focus, building on TNFD’s framework.
The TNFD framework represents a major change in green practices. It expands ESG reporting beyond climate-focused metrics to cover nature-related dependencies and effects. Wildlife populations have dropped sharply. More than half of global GDP depends on nature directly. This rise tackles a major gap in traditional reporting methods.
Companies that adopt TNFD gain an edge through detailed risk management. They see climate and biodiversity as connected challenges. On top of that, TNFD disclosures match well with existing frameworks like ESRS and GRI standards. This makes it easier to fit them into current reporting.
The European Union now requires TNFD approaches in mandatory reporting, with the UK government showing its support through major funding. Organizations should get ready for nature-related disclosures to become standard practice rather than optional leadership.
Moving from climate-only to nature-inclusive reporting can change how businesses see environmental risk in a more encompassing way. We have already witnessed that the companies that welcome this broader view of sustainability are more likely to succeed. They know nature-positive strategies bring strong financial returns while protecting the ecological systems that all businesses end up depending on.
