Growing evidence has linked biodiversity loss, ecosystem degradation, and freshwater scarcity to material financial risks across sectors. Traditional environmental risk frameworks largely focused on climate change and emissions, leaving organisations without consistent methods to identify, assess, and manage nature-related dependencies and impacts.
This gap challenges capital allocation, risk disclosure, and strategic planning, particularly for organisations with land-intensive or resource-dependent operations. The emergence of the Taskforce on Nature-related Financial Disclosures (TNDF) and the Science Based Targets Network (SBTN) addressed this gap by providing complementary frameworks that connect nature, risk management, and decision-making.
Nature-Related Risk in Financial and Corporate Systems
Nature-related risk refers to the potential for financial loss arising from dependencies on, or impacts to, ecosystems and biodiversity. These risks include physical risks such as reduced water availability, transition risks associated with policy and market change, and systemic risks linked to ecosystem collapse.
Financial institutions and corporations historically lacked standardised tools to translate ecological degradation into financial risk metrics. Prior initiatives, including the Natural Capital Protocol, provided valuation concepts but did not offer a consistent disclosure or target-setting architecture.
TNFD and SBTN built on this earlier work by aligning nature-related considerations with enterprise risk management and science-based performance thresholds.
The Taskforce on Nature-related Financial Disclosures
The Taskforce on Nature-related Financial Disclosures was established to develop a risk management and disclosure framework for nature-related issues, analogous to the Task Force on Climate-related Financial Disclosures. TNFD defines nature-related risks and opportunities as those arising from an organisation’s interactions with ecosystems across its value chain.
The framework rests on the concept of double materiality, recognising that organisations both depend on nature and affect it in ways that can generate financial consequences.
TNFD introduced a structured approach to identifying and assessing nature-related risk through the LEAP process, which covers locating interfaces with nature, evaluating dependencies and impacts, assessing risk and opportunity, and preparing disclosures.
This process encourages organisations to move from high-level screening to location-specific analysis, reflecting the spatially explicit character of ecological risk. The disclosure recommendations align with governance, strategy, risk management, and metrics and targets, supporting integration into existing financial reporting systems.
The Science Based Targets Network
The Science Based Targets Network focuses on enabling organisations to set measurable targets aligned with Earth system boundaries for nature. SBTN extended the logic of climate science-based targets to biodiversity, freshwater, land, and oceans. The network grounds its methods in planetary boundaries research and conservation science, emphasising biophysical thresholds rather than relative improvement metrics.
SBTN developed a stepwise process to guide organisations through assessing impacts, prioritising material areas, setting targets, and tracking progress. The methodology requires spatially explicit data and encourages alignment with global and local ecological thresholds. Targets address pressure reduction, ecosystem restoration, and conservation outcomes, linking corporate performance to scientifically defined limits.
Complementarity and Integration
TNFD and SBTN serve distinct but interrelated functions within nature-related risk management. TNFD provides a disclosure and risk framing architecture suitable for investors, lenders, and regulators. SBTN supplies scientifically grounded performance benchmarks that informe strategy and operational planning.
Together, the frameworks support a coherent progression from risk identification and disclosure to target setting and performance management. SBTN outputs should be identified earlier to populate TNFD metrics and targets, strengthening internal consistency.
The Environment Consultant 