Deep dive: Nature-related financial disclosures (TNFD) — the fastest-moving subsegments to watch

When the Taskforce on Nature-related Financial Disclosures released its final recommendations in September 2023, only 320 organizations signed on as early adopters. By Q1 2026, that number has surpassed 1,850 organizations representing over $24 trillion in assets under management, making TNFD one of the fastest-growing voluntary disclosure frameworks in financial history (TNFD, 2026). For procurement professionals across Europe, understanding which subsegments of nature-related disclosure are accelerating fastest is essential for staying ahead of supplier requirements, regulatory mandates, and investor expectations that are reshaping purchasing decisions.

Why It Matters

Nature-related financial disclosures are transitioning from voluntary commitments to regulatory requirements at a pace that has caught many organizations off guard. The EU Corporate Sustainability Reporting Directive (CSRD), which began phased implementation in January 2024, includes European Sustainability Reporting Standards (ESRS) E4 on biodiversity and ecosystems that are substantially aligned with TNFD recommendations. Over 50,000 EU companies will ultimately fall under CSRD reporting obligations, and their supply chains extend those requirements to non-EU suppliers through value chain data requests (European Commission, 2025).

France's Article 29 of the Energy-Climate Law already mandates biodiversity impact reporting for financial institutions with assets exceeding EUR 500 million. The UK's Green Finance Strategy includes a roadmap for mandatory TNFD-aligned disclosures by 2027. Brazil, Japan, and Australia have announced comparable timelines. The result is a regulatory patchwork that procurement teams must navigate when qualifying suppliers, structuring contracts, and assessing risk across global supply chains.

The financial stakes are substantial. A 2025 analysis by the Network for Greening the Financial System (NGFS) estimated that nature-related risks could trigger $4.7 trillion in asset value losses globally by 2030 under a "continued degradation" scenario. Companies that cannot demonstrate nature risk management face higher capital costs, exclusion from sustainable finance instruments, and loss of market access in jurisdictions with mandatory disclosure requirements.

Key Concepts

The TNFD framework is built on four disclosure pillars: Governance, Strategy, Risk and Impact Management, and Metrics and Targets. The LEAP approach (Locate, Evaluate, Assess, Prepare) provides the analytical methodology for organizations to identify nature-related dependencies and impacts across their operations and value chains.

Three concepts are central to understanding where momentum is building:

Double materiality requires companies to report both how nature risks affect the business (financial materiality) and how the business affects nature (impact materiality). This two-directional analysis is what separates TNFD from earlier frameworks that focused solely on financial risk to the reporting entity.

Dependency mapping identifies the ecosystem services a company relies on, such as pollination for agricultural supply chains, water purification for manufacturing operations, or coastal protection for physical assets. Companies that complete dependency mapping gain visibility into vulnerabilities that traditional enterprise risk management misses entirely.

Location-specific assessment recognizes that nature risks are inherently place-based. A soybean supplier in the Brazilian Cerrado faces fundamentally different biodiversity pressures than one in Iowa. The LEAP approach's "Locate" step requires organizations to map their operations, sourcing regions, and assets against biodiversity-sensitive areas, high-integrity ecosystems, and water-stressed basins.

The Fastest-Moving Subsegments

Supply Chain Nature Risk Screening

The most rapid acceleration is occurring in supply chain nature risk screening tools and platforms. Procurement teams need to assess hundreds or thousands of suppliers against nature-related criteria, and manual assessment is impractical at scale. Platforms such as NatureAlpha, Iceberg Data Lab, and the Integrated Biodiversity Assessment Tool (IBAT) have seen adoption rates increase 200 to 400% since 2024.

NatureAlpha, which provides nature risk scores for over 30,000 listed companies using satellite data, geospatial analytics, and supply chain models, raised $15 million in Series A funding in late 2025 and now counts 47 institutional investors among its clients (NatureAlpha, 2025). Iceberg Data Lab's Corporate Biodiversity Footprint metric, which translates corporate activities into equivalent hectares of biodiversity loss, has been integrated into Bloomberg Terminal and is used by over 120 asset managers for portfolio screening.

For procurement teams, these tools enable rapid screening of suppliers against nature-related criteria before deeper engagement. A European food manufacturer using IBAT's proximity analysis identified that 34% of its palm oil sourcing regions overlapped with Key Biodiversity Areas, triggering a supplier engagement program that reduced exposure to high-risk sourcing zones by 60% within 18 months.

Water-Related Disclosure and Basin-Level Reporting

Water is emerging as the most quantifiable entry point for nature-related disclosure. Unlike broader biodiversity metrics, which remain methodologically contested, water withdrawal, consumption, and discharge can be measured with established instrumentation and reported against recognized basin-level benchmarks.

The CEO Water Mandate and its WASH Pledge have seen corporate participation increase from 230 to over 410 signatories since TNFD's launch. The Alliance for Water Stewardship (AWS) Standard, which provides site-level water stewardship certification, has been formally recognized by TNFD as an aligned operational standard. Certified AWS sites grew from 180 in 2023 to 340 in 2025, with particularly strong uptake in the food and beverage, semiconductor, and mining sectors (AWS, 2026).

The World Resources Institute's Aqueduct platform, which provides water risk data at the sub-basin level for every country, processed over 2.1 million unique queries in 2025, a 150% increase over 2024. WRI has released Aqueduct 4.0 with enhanced projections through 2050 under multiple climate scenarios, enabling companies to assess future water stress in their sourcing regions and production locations.

For procurement, water-related disclosure is the subsegment where supplier data requests are most actionable. A major European retailer now requires all Tier 1 food suppliers to report water withdrawal volumes, wastewater quality, and basin-level stress context as standard contract terms, with non-compliance triggering sourcing reviews.

Financial Sector Nature Risk Integration

Banks, insurers, and asset managers are moving faster than the real economy in implementing TNFD-aligned processes. This subsegment is accelerating because financial regulators are signaling mandatory requirements and because the financial sector has existing infrastructure for risk assessment that can be extended to nature.

The Dutch Central Bank (DNB) published its second nature-related stress test in 2025, finding that 36% of Dutch financial institutions' loan books are exposed to material nature-related transition risks, primarily through agricultural lending and real estate portfolios in flood-prone areas (DNB, 2025). The Banque de France followed with its own biodiversity scenario analysis, and the European Central Bank has incorporated nature risk questions into its 2026 supervisory review process.

The Partnership for Biodiversity Accounting Financials (PBAF) has developed standardized methodologies for financial institutions to measure their portfolio's biodiversity footprint. PBAF membership grew from 40 to 85 institutions between 2024 and 2026, and the methodology has been endorsed by the UN Environment Programme Finance Initiative. ASN Bank in the Netherlands became the first financial institution to publish a full TNFD report using PBAF metrics, disclosing that its lending and investment portfolio generated a net positive biodiversity impact of 2,100 MSA.km2 through targeted financing of nature restoration projects.

Rabobank, one of Europe's largest agricultural lenders, has integrated TNFD-aligned nature risk screening into its agricultural lending process, requiring borrowers with more than EUR 1 million in facilities to complete a biodiversity impact questionnaire and develop improvement plans for high-risk operations. The program covered 12,000 farming clients by end of 2025.

Biodiversity Metrics Standardization

The lack of standardized, comparable biodiversity metrics has been TNFD's most significant adoption barrier. This subsegment is accelerating because multiple initiatives are converging on a workable set of core metrics.

The TNFD recommended a set of core global disclosure metrics in its v1.0 release, including land use change by type and biome, water withdrawal in water-stressed areas, and pollutant releases to soil, water, and air. These metrics align with the Kunming-Montreal Global Biodiversity Framework's monitoring indicators, creating a through-line from international biodiversity policy to corporate disclosure.

The Science Based Targets Network (SBTN) released its first validated corporate nature targets in 2025, covering freshwater and land systems. Thirty-two companies completed SBTN's five-step target-setting process, with most adopting targets to reduce land conversion, restore degraded areas within their operational footprint, and improve freshwater quality in priority basins. Notably, SBTN's methodology requires the same location-specific assessment as TNFD's LEAP approach, meaning companies pursuing science-based nature targets simultaneously generate the data required for TNFD disclosure.

The Align project, funded by the EU and coordinated by UNEP-WCMC, published its final recommendations on a standardized biodiversity measurement framework in 2025. The framework identifies three tiers of metrics: Tier 1 pressure-based indicators (land use change, pollution, resource extraction) that can be calculated from existing corporate data; Tier 2 state-based indicators (species abundance, ecosystem condition) that require geospatial data; and Tier 3 response-based indicators (area under restoration, conservation investment) that capture corporate actions.

What's Working

Organizations that have progressed furthest in TNFD implementation share several characteristics. They start with a single priority ecosystem or commodity rather than attempting comprehensive coverage. Nestle began its TNFD journey by focusing exclusively on dairy supply chain impacts in three priority watersheds in New Zealand, France, and Brazil, generating actionable results within six months before expanding scope.

Financial institutions are finding that existing TCFD reporting infrastructure can be adapted for TNFD with moderate incremental effort. Governance structures, risk management processes, and disclosure templates designed for climate can accommodate nature with targeted modifications. BNP Paribas reported that extending its TCFD process to cover nature-related risks added approximately 30% incremental effort in the first year, declining to 15% in subsequent years as the approach matured.

Geospatial analytics platforms have made the LEAP approach's "Locate" step dramatically more accessible. Tools such as the ENCORE database (maintained by UNEP-WCMC and the Natural Capital Finance Alliance), Global Forest Watch, and Microsoft's Planetary Computer enable companies to overlay their supply chain locations against biodiversity sensitivity data in hours rather than months.

What's Not Working

Scope 3 nature impacts remain the critical gap. Most TNFD early adopters have focused on direct operations (Scope 1 equivalent) while struggling to assess upstream supply chain nature dependencies and impacts. A 2025 CDP analysis of TNFD early adopter reports found that only 18% included quantitative data on value chain nature impacts, compared to 72% covering direct operations (CDP, 2025).

Data availability in emerging market supply chains is severely limited. Smallholder farmers, artisanal producers, and informal-sector suppliers in Sub-Saharan Africa, South and Southeast Asia, and Latin America lack the monitoring infrastructure, technical capacity, and financial resources to provide the location-specific data that TNFD requires. This creates a structural bias in which nature-related disclosure is most feasible where it is least needed and least feasible where nature loss is most acute.

Methodology fragmentation continues to slow adoption despite convergence efforts. Procurement teams report receiving conflicting data from different biodiversity footprint tools, with studies showing that corporate biodiversity scores from leading providers can diverge by 40 to 60% for the same company, depending on the metric, scope, and data source used. Until interoperability improves, companies face the prospect of reporting against multiple frameworks to satisfy different stakeholders.

Key Players

Established Organizations

• TNFD Secretariat: Maintains the framework, publishes guidance, and coordinates the early adopters forum with over 1,850 organizational members
• UNEP-WCMC: Provides the ENCORE database and coordinates the Align project for biodiversity metrics harmonization
• CDP: Integrated TNFD-aligned questions into its 2025 disclosure questionnaire, reaching over 23,000 companies
• World Resources Institute: Operates Aqueduct water risk platform and provides technical resources for TNFD implementation

Startups and Innovators

• NatureAlpha: AI-driven nature risk ratings covering 30,000+ companies, $15 million Series A in 2025
• Iceberg Data Lab: Corporate Biodiversity Footprint metric integrated into Bloomberg Terminal
• Pivotal: Satellite-based ecosystem monitoring platform serving financial institutions and corporates
• OS Climate: Open-source climate and nature data analytics platform backed by Linux Foundation

Investors and Financial Institutions

• Rabobank: TNFD-aligned nature risk screening integrated into agricultural lending for 12,000+ clients
• BNP Paribas: Published comprehensive TNFD report with full LEAP assessment across priority sectors
• Norges Bank Investment Management: Requires TNFD-aligned disclosure from portfolio companies with high nature exposure
• Finance for Biodiversity Foundation: Coalition of 170+ financial institutions committed to TNFD adoption

Action Checklist

• Map Tier 1 and critical Tier 2 suppliers against Key Biodiversity Areas and water-stressed basins using IBAT or Aqueduct
• Conduct a dependency analysis for priority commodities using the ENCORE database to identify ecosystem service reliance
• Integrate TNFD-aligned data requests into supplier qualification questionnaires, starting with water withdrawal and land use change metrics
• Assess existing TCFD governance structures for extension to nature-related risks and identify incremental process requirements
• Pilot the LEAP approach on one priority commodity or sourcing region to build internal capacity before scaling
• Engage with SBTN to evaluate feasibility of science-based nature targets for freshwater and land systems
• Establish internal training for procurement teams on biodiversity risk terminology, TNFD framework structure, and supplier engagement approaches
• Monitor regulatory timelines in key operating jurisdictions for mandatory TNFD-aligned reporting requirements

FAQ

Q: How does TNFD differ from TCFD, and can we use existing TCFD processes? A: TNFD is modeled on the same four-pillar structure as TCFD (Governance, Strategy, Risk Management, Metrics and Targets) but adds the LEAP approach for nature-specific impact and dependency analysis. The key differences are that nature risks are location-specific rather than global, nature encompasses multiple dimensions (biodiversity, water, soil, ocean, atmosphere) rather than a single variable (CO2e), and double materiality is embedded in the framework rather than optional. Organizations with mature TCFD processes can typically extend them to cover nature with 25 to 35% incremental effort in the first reporting cycle.

Q: What are the minimum viable metrics for a first TNFD disclosure? A: TNFD's core global metrics provide the starting point: total land area owned, leased, or managed in or adjacent to Key Biodiversity Areas; water withdrawal in water-stressed basins; pollutant releases to soil, water, and air; and area of land use change by biome. For procurement teams, supplier-level data on sourcing origin (to enable location-specific assessment), land use practices, water consumption, and agrochemical use forms the minimum viable supplier data set. Organizations should prioritize data collection on the two or three commodities or inputs representing the largest nature footprint.

Q: How should procurement teams prioritize suppliers for TNFD-aligned engagement? A: Start with a two-axis prioritization: nature risk exposure (based on geospatial screening of sourcing locations against biodiversity sensitivity data) and spend concentration (identifying suppliers that represent the largest procurement volumes). Suppliers that score high on both axes should receive priority engagement. A practical threshold used by several European retailers is to focus detailed nature risk assessment on suppliers representing the top 80% of procurement spend in high nature-risk commodity categories such as palm oil, soy, beef, cocoa, coffee, timber, and natural rubber.

Q: What is the timeline for mandatory TNFD-aligned reporting in Europe? A: The CSRD's ESRS E4 standard on biodiversity and ecosystems is mandatory for large EU companies reporting from fiscal year 2024 onward, with SMEs following from 2026. The ESRS E4 requirements are substantially aligned with TNFD but include additional EU-specific metrics. Companies reporting under CSRD that also adopt the TNFD framework can leverage a single data collection process for both requirements. The European Financial Reporting Advisory Group (EFRAG) has published interoperability guidance mapping ESRS E4 data points to TNFD recommended disclosures, confirming approximately 80% overlap.

Sources

• Taskforce on Nature-related Financial Disclosures. (2026). TNFD Early Adopters: Progress Report and Market Analysis. Geneva: TNFD Secretariat.
• European Commission. (2025). CSRD Implementation Review: Biodiversity and Ecosystem Reporting Under ESRS E4. Brussels: European Commission.
• Network for Greening the Financial System. (2025). Nature-Related Financial Risks: A Conceptual Framework and Scenario Analysis. Paris: NGFS.
• De Nederlandsche Bank. (2025). Indebted to Nature: Second Biodiversity Stress Test for the Dutch Financial Sector. Amsterdam: DNB.
• CDP. (2025). Biodiversity in Corporate Disclosure: Analysis of TNFD Early Adopter Reports. London: CDP Worldwide.
• NatureAlpha. (2025). Series A Announcement and Platform Impact Report. London: NatureAlpha Ltd.
• Alliance for Water Stewardship. (2026). Annual Certification Report: Growth and Impact 2023-2025. Edinburgh: AWS.
• Science Based Targets Network. (2025). First Corporate Nature Targets: Validation Report and Methodology Update. Amsterdam: SBTN.
• World Resources Institute. (2025). Aqueduct 4.0: Global Water Risk Atlas and Corporate Adoption Metrics. Washington, DC: WRI.