Task Force for Nature-Related Financial Disclosure (TNFD) beta v.0.4 released

Today, beta v.0.4 of the TNFD Risk and Opportunity Framework was released. This is the last draft that will be available for consultation before the launch of the final TNFD document in September 2023. IEMA’s Policy and Engagement Lead on biodiversity and natural capital, Lesley Wilson, reports.

The TNFD provides a suite of tools and guidance to support businesses to understand and report on their nature-related impacts and dependencies and is roughly divided into: nature related issues assessment (using their LEAP – Locate, Evaluate, Assess, Prepare – model); recommended disclosures; and additional guidance on sectors, biomes, scenarios, stakeholders and metrics.

The TNFD continues to use the same structure and language as the TCFD (Task Force on Climate-related Financial Disclosure) for consistency. All 11 recommended TCFD disclosures have been included plus a further 3 for clarity in the nature context. The TNFD also continues to attempt to align with other initiatives such as SBTN (Science-Based Targets for Nature) and the Global Biodiversity Framework.

Updates in the beta v.0.4 Framework

TNFD has introduced six general requirement components for disclosure statements: approach to materiality; scope of disclosures; links between dependencies, impacts, risks and opportunities; location; integration with other sustainability issues; and stakeholder engagement.

Due to feedback, they’ve also expanded on the idea of ‘scope 3’ in TCFD to refer to upstream and downstream operations, as well as ‘financed’ operations for financial institutions.

Additional guidance includes: updates to the LEAP process; new guidance on scenarios; updated guidance on target setting; guidance on engagement with affected stakeholders; and new guidance on risk assessment methods.

There is also additional sector and new biome guidance that includes: updated draft guidance for financial institutions; new guidance on agriculture, food, energy and mining; and new guidance on the interface biomes, for example, tropical forests, recognizing that this can be different in different parts of the world

What next?

Increasingly, it seems that the emphasis of TNFD is not just focused on disclosure, but that the LEAP approach can be used for giving a better understanding of nature-related impacts and dependencies more generally without disclosure, perhaps to be used by smaller organizations.

TNFD has also been reaching out to the auditing world and between now and September will be undertaking a review and considering what, if anything, needs to be added on auditing.

The final date for feedback on the beta v.0.4 is 1 June 2023. Between now and September there will be ongoing technical work on feedback, additional sector and biome guidance, additional work on measurement through value chains, scenarios for the Finance Industry, and additional case studies and practical examples.

The launch of the TNFD (version 1) will be September 2023.

Lesley Wilson

Policy and Engagement Lead

Lesley is Policy and Engagement Lead at IEMA with a focus on biodiversity and natural capital. Lesley also supports IEMA’s role as Secretariat to the UK Business and Biodiversity Forum, working with businesses to raise the profile of, mainstream, and share good practice in, biodiversity. Lesley joined IEMA in December 2021 after 11 years delivering projects, programmes and solutions for business in the field of environmental sustainability for the British Standards Institution (BSI), including ground breaking standards in biodiversity net gain and natural capital. Lesley has a qualification in business management (MBA) and climate change management, and mentors environmental students at the University of Westminster.