Companies in many sectors depend on natural systems such as water, fertile soil, forests, and healthy oceans. When ecosystems are degraded, businesses face supply-chain disruptions, rising costs, regulatory and legal risks, and threats to long-term profitability.
Despite these mounting financial risks, nature-related dependencies, impacts, and opportunities have historically been misidentified, poorly measured, and insufficiently disclosed in financial reporting.
Status Quo: Taskforce on Nature-related Financial Disclosures
To address this gap, the Taskforce on Nature-related Financial Disclosures (TNFD) was launched in 2021 to provide a standardized framework that helps organizations identify, assess, and disclose nature-related financial risks and opportunities.
TNFD’s work builds on the success of the Task Force on Climate-related Financial Disclosures (TCFD) by translating the interactions between businesses and nature into financially material information that supports better corporate decision-making and capital allocation toward nature-positive outcomes.
Upcoming Changes and the Future of Nature Disclosure
A significant development in the broader reporting ecosystem is the formal collaboration announced between the International Financial Reporting Standards (IFRS) Foundation and TNFD in April 2025, aimed at enabling nature-related financial disclosures for capital markets.
Under this agreement, the IFRS Foundation’s International Sustainability Standards Board (ISSB) will deepen its engagement with TNFD to draw on the TNFD recommendations, metrics, and methodological approaches (including LEAP, see below), as it explores standard-setting on nature-related disclosure requirements.
This collaboration seeks to integrate nature risk considerations into the IFRS Sustainability Disclosure Standards, expanding beyond the foundational climate and general sustainability standards (IFRS S1 and S2) already in place.
ISSB announced that it will begin work on standard-setting for nature-related risks and opportunities, intending to leverage the TNFD framework to ensure that future requirements meet investor needs for consistent, comparable information.
The ISSB aims to have an exposure draft ready by key global negotiations in late 2026, reinforcing the drive toward a globally interoperable disclosure landscape that includes both climate and nature-related financial risks.
Together, TNFD’s pioneering recommendations and the IFRS-TNFD collaboration mark an important step toward mainstreaming nature-related financial disclosures in capital markets.
This evolution promises to enhance transparency, reduce informational gaps, and help investors and companies better understand and manage the material financial implications of nature loss as part of comprehensive sustainability reporting.
The Environment Consultant 