TNFD is short for Taskforce on Nature-related Financial Disclosures. It’s a set of internationally recognized disclosure recommendations, enabling businesses and finance professionals to assess and report on their nature-related dependencies.
The core goal of the framework is to encourage nature-positive business outcomes rather than nature-negative outcomes. Furthermore, the recommendations are based on and aligned with the Kunming-Montreal Global Biodiversity Framework, ensuring that organizations prioritize the future of nature and biodiversity in their business decisions.
TNFD is a global initiative designed to enable organizations to integrate nature-related risks and opportunities into decision-making and disclosures, thereby supporting a shift toward a nature-positive global economy.
By providing clear guidelines on how to report on nature-related impacts, the TNFD framework allows for a standardized approach, making it easier for investors and regulators to understand the impact businesses have on biodiversity, and the associated risks and opportunities that may arise.
Our expert consultants have deep knowledge about TNFD, TCFD, CSRD and other global frameworks related to risk assessments and strategy development.
As sustainability metrics become increasingly important in relation to raising capital and
accessing new markets, organizations will need to familiarize themselves with these sorts of
Frameworks.
At CEMAsys, we specialize in helping businesses and organizations succeed in these
frameworks. Through our end-to-end ESG services, we help you get access to all the relevant
data, help you manage and monitor the data, and help you report on it as well
What are nature-related risks and opportunities exactly?
When talking about sustainability frameworks for disclosure and reporting, we’re typically concerned about risk assessments – or perhaps opportunity assessment. That is, an analysis of how prone a business is to “violate” or be non-compliant with a certain standard – or how much a company has to gain from achieving compliance with a certain standard.
In this sense, risks and opportunities are basically two sides of the same coin.
So, when talking about TNFD, we’re specifically concerned with nature-related risks/opportunities as defined by the framework, which may then impact how investors and other stakeholders may view the given company. This view can ultimately decide whether or not capital can be raised, or access to a given market can be supported.
Nature-related risks and opportunities are defined as follows.
“... the potential threats posed to an organisation linked to its and other organisations’ dependencies on nature and nature impacts”.
These threats are further subdivided into three types of risks:
Physical
Transitional
Systemic
Being able to assess and address these risks can lead to financial opportunities. Reversely, a failure to comply with or put into place a realistic strategy for combatting these risks, may translate into risk for financial institutions who will then be reluctant to invest in the company.
Nature-related opportunities
The framework defines nature-related opportunities as:
“... activities that create positive outcomes for organisations and nature by avoiding or reducing impact on nature or contributing to its restoration”.
Opportunities can occur through:
Mitigation of risk
Transformation of business models, products, services, and investments that seek to reverse or halt the loss of nature
Assessing nature-related risks and opportunities with the LEAP approach
LEAP stands for Locate, Evaluate, Assess, and Prepare, and is the official risk and opportunity assessment process.
Locate your touchpoints with nature
Evaluate your dependencies and impacts
Assess your risks and opportunities
Prepare a response strategy and report to stakeholders
It’s a voluntary guideline designed to “inform strategy, governance, capital allocation and risk management decisions, including disclosure decisions aligned with the TNFD’s draft disclosure recommendations”.
That said, some companies have developed proprietary processes for evaluating and assessing potential risks and opportunities, which the framework also recognizes.
At CEMAsys, we’ve developed a state-of-the-art cloud-based system that gathers, manages, and analyzes your ESG data. The system is tailored to each company’s needs and enables independence and continuity in tracking your sustainability performance.
On top of that, we offer support through our team of experienced ESG consultants.
Scale your ESG team with CEMAsys’ advisory services. Get in touch.
TNFD vs TCFD: What are the differences?
TNFD stands for Taskforce on Nature-related Financial Disclosures, while TCFD stands for Task Force on Climate-related Financial Disclosures.
At the surface level, the key difference between the two frameworks is nature vs climate.
TNFD seeks to promote positive business impacts on nature specifically, such as biodiversity, ecosystems, and natural resources. The framework uses a so-called double materiality approach, meaning the framework takes into account both the impact a business has on nature, as well as the impact nature-related issues have on the business’ financial performance.
TCFD, on the other hand, seeks to promote positive business impacts on climate change, GHG emissions, and other climate-related issues. This is done through a single materiality approach, meaning the framework solely focuses on climate-related issues that directly affect their own financial performance.
A case can be made that by doing so, the climate will benefit in the end. But the TCFD framework still lacks the double materiality perspective that the TNFD framework employs.
TCFD was set up by FSB (the Financial Stability Board) on request by G20, a forum of the 20 largest and fastest developing economies in the world. The FSB has close ties to financial regulators worldwide.
TNFD was not set up by G20, but has evidently taken some inspiration from the G20 framework. Instead, it was founded by a coalition of financial institutions, corporations, public agencies, and many more organizations. The TNFD operates independently from the FSB.
When reporting on ESG metrics, the two frameworks are often used in tandem. With an increasing expectation from stakeholders that businesses uphold strict climate and ESG goals, there is likewise an increasing expectation that businesses familiarize themselves with, and make use of, these frameworks.
How can my organization start working with the TNFD framework?
Assessing nature-related risks and opportunities can help businesses and organizations build more resilient and sustainable business models.
By identifying the nature-related factors that impact, or get impacted, by your business – such as biodiversity loss or land degradation – you can effectively strengthen ESG performance and stakeholder trust.
Throughout the value chain, you’ll also be able to mitigate operational disruptions resulting from the nature-related risks. Say, if a key supplier operates in a region facing increased water scarcity or deforestation regulations, early assessment allows you to source more responsibly or find alternative suppliers.
And by assessing nature-related opportunities, you might be able to innovate the business as a whole, uncovering entirely new possibilities of value creation.
Interested in hearing more about how CEMAsys can support your work surrounding TNFD and ESG?
The TNFD is a global framework whose purpose is to promote nature-positive outcomes.
What is the difference between TNFD and TCFD?
TNFD focuses on nature-related risks and opportunities, including biodiversity, ecosystems, and natural resources. TCFD focuses on climate-related risks and opportunities, primarily through the lens of financial impact.
Both frameworks share similar processes and structure, but address different environmental issues.
What are the 4 pillars of TNFD?
The TNFD framework is organized around four pillars:
Governance
Strategy
Risk and impact management
Metrics and targets
What is the TNFD in a nutshell?
In a nutshell, the TNFD is a global framework for assessing and reporting on nature-related risks and opportunities. With an increasing emphasis from stakeholders (such as customers and investors) on ESG and sustainability metrics as a whole, the TNFD framework supports this emphasis and helps businesses identify and realize their risks and opportunities.
Is the TNFD mandatory?
No, the TNFD framework is currently voluntary. Still, utilizing the framework can prove beneficial for businesses who hope to strengthen their ESG profile.
What is TNFD in ESG?
In relation to ESG, TNFD falls under “E”.
Is TNFD double materiality?
Yes, the TNFD, as opposed to the TCFD, is using a double materiality approach. This means that the framework both considers the impact a business has on nature, as well as the impact nature-related issues have on the business’ financial performance.
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What is the purpose of TNFD?
TNFD is a global initiative designed to enable organizations to integrate nature-related risks and opportunities into decision-making and disclosures, thereby supporting a shift toward a nature-positive global economy.
By providing clear guidelines on how to report on nature-related impacts, the TNFD framework allows for a standardized approach, making it easier for investors and regulators to understand the impact businesses have on biodiversity, and the associated risks and opportunities that may arise.
Our expert consultants have deep knowledge about TNFD, TCFD, CSRD and other global frameworks related to risk assessments and strategy development.
As sustainability metrics become increasingly important in relation to raising capital and
accessing new markets, organizations will need to familiarize themselves with these sorts of
Frameworks.
At CEMAsys, we specialize in helping businesses and organizations succeed in these
frameworks. Through our end-to-end ESG services, we help you get access to all the relevant
data, help you manage and monitor the data, and help you report on it as well
What are nature-related risks and opportunities exactly?
When talking about sustainability frameworks for disclosure and reporting, we’re typically concerned about risk assessments – or perhaps opportunity assessment. That is, an analysis of how prone a business is to “violate” or be non-compliant with a certain standard – or how much a company has to gain from achieving compliance with a certain standard.
In this sense, risks and opportunities are basically two sides of the same coin.
So, when talking about TNFD, we’re specifically concerned with nature-related risks/opportunities as defined by the framework, which may then impact how investors and other stakeholders may view the given company. This view can ultimately decide whether or not capital can be raised, or access to a given market can be supported.
Nature-related risks and opportunities are defined as follows.
“... the potential threats posed to an organisation linked to its and other organisations’ dependencies on nature and nature impacts”.
These threats are further subdivided into three types of risks:
Physical
Transitional
Systemic
Being able to assess and address these risks can lead to financial opportunities. Reversely, a failure to comply with or put into place a realistic strategy for combatting these risks, may translate into risk for financial institutions who will then be reluctant to invest in the company.
Nature-related opportunities
The framework defines nature-related opportunities as:
“... activities that create positive outcomes for organisations and nature by avoiding or reducing impact on nature or contributing to its restoration”.
Opportunities can occur through:
Mitigation of risk
Transformation of business models, products, services, and investments that seek to reverse or halt the loss of nature
Assessing nature-related risks and opportunities with the LEAP approach
LEAP stands for Locate, Evaluate, Assess, and Prepare, and is the official risk and opportunity assessment process.
Locate your touchpoints with nature
Evaluate your dependencies and impacts
Assess your risks and opportunities
Prepare a response strategy and report to stakeholders
It’s a voluntary guideline designed to “inform strategy, governance, capital allocation and risk management decisions, including disclosure decisions aligned with the TNFD’s draft disclosure recommendations”.
That said, some companies have developed proprietary processes for evaluating and assessing potential risks and opportunities, which the framework also recognizes.
At CEMAsys, we’ve developed a state-of-the-art cloud-based system that gathers, manages, and analyzes your ESG data. The system is tailored to each company’s needs and enables independence and continuity in tracking your sustainability performance.
On top of that, we offer support through our team of experienced ESG consultants.
Scale your ESG team with CEMAsys’ advisory services. Get in touch.
TNFD vs TCFD: What are the differences?
TNFD stands for Taskforce on Nature-related Financial Disclosures, while TCFD stands for Task Force on Climate-related Financial Disclosures.
At the surface level, the key difference between the two frameworks is nature vs climate.
TNFD seeks to promote positive business impacts on nature specifically, such as biodiversity, ecosystems, and natural resources. The framework uses a so-called double materiality approach, meaning the framework takes into account both the impact a business has on nature, as well as the impact nature-related issues have on the business’ financial performance.
TCFD, on the other hand, seeks to promote positive business impacts on climate change, GHG emissions, and other climate-related issues. This is done through a single materiality approach, meaning the framework solely focuses on climate-related issues that directly affect their own financial performance.
A case can be made that by doing so, the climate will benefit in the end. But the TCFD framework still lacks the double materiality perspective that the TNFD framework employs.
TCFD was set up by FSB (the Financial Stability Board) on request by G20, a forum of the 20 largest and fastest developing economies in the world. The FSB has close ties to financial regulators worldwide.
TNFD was not set up by G20, but has evidently taken some inspiration from the G20 framework. Instead, it was founded by a coalition of financial institutions, corporations, public agencies, and many more organizations. The TNFD operates independently from the FSB.
When reporting on ESG metrics, the two frameworks are often used in tandem. With an increasing expectation from stakeholders that businesses uphold strict climate and ESG goals, there is likewise an increasing expectation that businesses familiarize themselves with, and make use of, these frameworks.
How can my organization start working with the TNFD framework?
Assessing nature-related risks and opportunities can help businesses and organizations build more resilient and sustainable business models.
By identifying the nature-related factors that impact, or get impacted, by your business – such as biodiversity loss or land degradation – you can effectively strengthen ESG performance and stakeholder trust.
Throughout the value chain, you’ll also be able to mitigate operational disruptions resulting from the nature-related risks. Say, if a key supplier operates in a region facing increased water scarcity or deforestation regulations, early assessment allows you to source more responsibly or find alternative suppliers.
And by assessing nature-related opportunities, you might be able to innovate the business as a whole, uncovering entirely new possibilities of value creation.
Interested in hearing more about how CEMAsys can support your work surrounding TNFD and ESG?
The TNFD is a global framework whose purpose is to promote nature-positive outcomes.
What is the difference between TNFD and TCFD?
TNFD focuses on nature-related risks and opportunities, including biodiversity, ecosystems, and natural resources. TCFD focuses on climate-related risks and opportunities, primarily through the lens of financial impact.
Both frameworks share similar processes and structure, but address different environmental issues.
What are the 4 pillars of TNFD?
The TNFD framework is organized around four pillars:
Governance
Strategy
Risk and impact management
Metrics and targets
What is the TNFD in a nutshell?
In a nutshell, the TNFD is a global framework for assessing and reporting on nature-related risks and opportunities. With an increasing emphasis from stakeholders (such as customers and investors) on ESG and sustainability metrics as a whole, the TNFD framework supports this emphasis and helps businesses identify and realize their risks and opportunities.
Is the TNFD mandatory?
No, the TNFD framework is currently voluntary. Still, utilizing the framework can prove beneficial for businesses who hope to strengthen their ESG profile.
What is TNFD in ESG?
In relation to ESG, TNFD falls under “E”.
Is TNFD double materiality?
Yes, the TNFD, as opposed to the TCFD, is using a double materiality approach. This means that the framework both considers the impact a business has on nature, as well as the impact nature-related issues have on the business’ financial performance.
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