Date posted: 21/09/2023

Another historic moment for sustainability reporting

The Taskforce on Nature-related Financial Disclosures (TNFD) has released its final recommendations.

In brief

  • 14 recommended disclosures covering nature-related dependencies, impacts, risks and opportunities.
  • TNFD Australian pilot case study report published.
  • Getting started with TNFD guidance available.

Taskforce for Nature-Related Financial Disclosures (TNFD) releases highly anticipated recommended disclosures

The TNFD, launched in June 2021, to develop a global nature-related risk management and disclosure framework.

The TNFD has released its final recommendations. The recommendations provide companies and financial institutions, of all sizes, with a risk management and disclosure framework to identify, assess, manage and, where appropriate, disclose nature-related issues.

The language, structure and approach of the recommendations are consistent with the Task Force on Climate-related Financial Disclosures (TCFD) and the International Sustainability Standards Board (ISSB) to enable integrated climate and nature related reporting. The TNFD’s four disclosure pillars include fourteen recommended disclosures covering nature-related dependencies, impacts, risks and opportunities.

Taskforce for Nature-Related Financial Disclosures

Source: Recommendations of the Taskforce on Nature-related Disclosures, September 2023

To support adoption and the provision of consistent, comparable and decision-useful information for report users, the Taskforce has developed:

  • A set of recommended indicators and metrics for assessment and to support disclosure; and
  • A suite of additional guidance covering:
  • How to get started with TNFD, with practical steps, considerations and insights from pilot testing;
  • The identification and assessment of nature related issues (the LEAP approach), building on, and integrating the use of, existing market-leading frameworks, tools and datasets;
  • specific sectors and types of ecosystem (biomes);
  • Scenario analysis; and
  • Engagement of Indigenous Peoples, Local Communities and affected stakeholders.

Find out more about the TNFD recommendations

Access the TNFD practical guide for adoption and suite of resources

Australian Government pilots TNFD with business

The Department of Climate Change, Energy, the Environment and Water (DCCEEW) has released Taskforce on Nature-related Financial Disclosures, Pilots – Australian Case Study Report, which shares the results from a TNFD Pilot Testing Project (the study project) facilitated by EY.

The purpose of the study project was to generate feedback on the TNFD Framework and
understand Australian businesses’ readiness to prepare nature-related risk and opportunity disclosures. The pilot study will also help identify implementation challenges, gaps in available data,
and the role of the government in facilitating uptake of the TNFD.

The pilot project required participants to test the TNFD’s nature-related risk and opportunity assessment framework, which feeds into and informs the four disclosure recommendation pillars.

This pilot study highlighted several key challenges for Australian corporations and Financial Institutions looking to prepare TNFD-aligned disclosures, including:

  • Specialised expertise will be necessary to complete a LEAP assessment, particularly in the fields of natural science and geo-spatial data
  • Organisations will need to invest in gathering reliable data across their direct operations and supply chains. • Organisations will need to identify reliable indicators, methodologies, and assumptions to evaluate and track nature-related impacts, dependencies, risks, and opportunities.
  • Existing reporting frameworks and processes will need to be adjusted to integrate the required TNFD disclosure processes.
  • Building authentic and meaningful consultation processes, addressing stakeholder expectations, and responding to feedback will be critical and requires adequate resourcing.

Actions for businesses planning to adopt the TNFD disclosure recommendations have also been highlighted in the Report:

  • Build internal capabilities: build internal natural science capabilities and bridge nature considerations into the business’ core strategy and operations.
  • Develop an engagement strategy: Consulting and collaborating with key stakeholders will be critical to effectively identify and assess nature-related risks and opportunities. Organisations should develop a strategy to engage with their relevant stakeholders, including investees, clients, customers, suppliers, researchers, First Nations led organisations and local communities.
  • Prioritise consultation and collaboration with First Nations people.
  • Seek opportunities to engage policy makers and international standard setters to guide development of sustainability report frameworks. This can also help shape these frameworks to be fit-for-purpose in Australia.
  • Create a roadmap for preparing nature-related disclosures aligned with your organisation and key stakeholders’ priorities.

Read the report and deep dive guidance

Joint Submission to the TNFD

CA ANZ and ASFI responded to the TNFD consultation on their fourth and final beta framework.

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CA ANZ sustainability micro courses

Elevate your knowledge and confidence in tackling the sustainability challenges that face your business.

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CA ANZ Tools & Resources

Practical guidance to assist you to incorporate sustainability, or an environmental, social and governance (ESG).

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