Deep dive: Nature-related financial disclosures (TNFD) — what's working, what's not, and what's next

By March 2026, 320 organizations across 46 countries had formally committed to reporting in alignment with the Taskforce on Nature-related Financial Disclosures (TNFD), representing over $4 trillion in combined market capitalization (TNFD, 2025). Yet a 2025 analysis by the World Benchmarking Alliance found that only 12% of those early adopters had published disclosures that addressed all four pillars of the TNFD framework: governance, strategy, risk and impact management, and metrics and targets. The gap between commitment and execution reveals both the promise and the friction embedded in the most ambitious nature-reporting framework ever attempted.

Why It Matters

Nature loss is no longer a peripheral concern for financial institutions and corporates. The World Economic Forum's 2025 Global Risks Report ranked biodiversity loss and ecosystem collapse as the third most severe risk over the next decade. More concretely, an analysis by the Network for Greening the Financial System (NGFS) estimated that $44 trillion of global economic value generation, more than half of global GDP, is moderately or highly dependent on nature and its services (NGFS, 2024). For sustainability leads navigating reporting requirements in North America, TNFD has moved from a voluntary aspiration to an increasingly unavoidable component of corporate disclosure strategy, particularly as the ISSB signaled in late 2025 that it would develop a nature-related standard building on TNFD's architecture.

The financial materiality of nature risk is becoming visible in balance sheets. In 2025, Rabobank disclosed that 38% of its agricultural lending portfolio faced elevated credit risk from pollinator decline, soil degradation, and water scarcity, findings that emerged directly from its TNFD-aligned assessment process. Similarly, Holcim identified $1.8 billion in quarrying and mining assets exposed to biodiversity regulatory risk across 14 jurisdictions after completing its first LEAP assessment. These are not hypothetical scenarios: they are quantified exposures reshaping capital allocation decisions.

Key Concepts

The TNFD framework, finalized in September 2023 after two years of development, is built on four recommendation pillars mirroring the TCFD structure: Governance, Strategy, Risk and Impact Management, and Metrics and Targets. The framework introduced the LEAP approach (Locate, Evaluate, Assess, Prepare) as a structured methodology for organizations to identify and assess nature-related dependencies, impacts, risks, and opportunities across their value chains.

A critical distinction from climate disclosure is the concept of "double materiality" embedded in TNFD: organizations must consider both their impacts on nature (impact materiality) and nature's impacts on their business (financial materiality). The framework also introduced the concept of priority locations, requiring organizations to identify specific geographies where their operations or value chains interact with ecologically sensitive areas, including biodiversity hotspots, key biodiversity areas, and water-stressed regions.

The TNFD framework references and builds upon complementary standards including the Global Biodiversity Framework (GBF) targets agreed at COP15 in Montreal, the Science Based Targets Network (SBTN) methodology for setting corporate nature targets, and the Integrated Biodiversity Assessment Tool (IBAT) for location-specific biodiversity screening.

What's Working

Early Adopter Momentum Is Real

The TNFD Early Adopter program has exceeded initial expectations. When launched in January 2024, the Taskforce set a target of 100 organizations committing to disclose by the end of the year. By December 2024, 320 had signed on. Major North American adopters include Bank of America, Citi, TD Bank Group, Nutrien, and Bunge. The geographic and sectoral diversity of early adopters has validated the framework's applicability beyond the financial sector: mining companies (BHP, Anglo American), food and beverage companies (Nestle, Danone), and consumer goods firms (Unilever, Kering) are all actively reporting.

The LEAP Approach Is Delivering Actionable Insights

Organizations that have completed full LEAP assessments report that the structured methodology surfaces nature-related risks that conventional environmental impact assessments miss. Nestle's 2025 TNFD disclosure revealed that 67% of its dairy sourcing regions in North America overlap with areas classified as water-stressed by the World Resources Institute's Aqueduct tool, a finding that had not emerged through its existing TCFD-aligned climate risk process. The LEAP approach forced the company to map specific sourcing locations against biome-level data rather than relying on aggregate country-level assessments.

TD Bank Group completed a pilot LEAP assessment across its Canadian agricultural lending portfolio in 2024 and identified that 22% of borrowers by loan value operated in watersheds with declining freshwater availability trends. The bank subsequently integrated nature risk scoring into its credit approval process for agricultural loans above $5 million, requiring borrowers to demonstrate awareness of their nature dependencies (TD Bank Group, 2025).

Regulatory Tailwinds Are Accelerating Adoption

The European Sustainability Reporting Standards (ESRS) under the Corporate Sustainability Reporting Directive (CSRD) include biodiversity and ecosystem disclosure requirements (ESRS E4) that are substantially aligned with TNFD. For North American companies with European operations or European investors, CSRD compliance effectively requires TNFD-comparable disclosures. In Canada, the Office of the Superintendent of Financial Institutions (OSFI) published draft guidance in 2025 recommending that federally regulated financial institutions assess nature-related risks using the TNFD framework.

What's Not Working

Data Availability Remains the Binding Constraint

The single largest barrier to high-quality TNFD disclosure is the absence of standardized, location-specific nature data at the resolution needed for meaningful risk assessment. While satellite-based land use and land cover data has improved dramatically, metrics for soil health, pollinator abundance, freshwater ecosystem integrity, and below-ground biodiversity remain sparse, inconsistent, or nonexistent at commercial scales.

A 2025 survey of 85 TNFD early adopters conducted by the Cambridge Institute for Sustainability Leadership found that 71% cited data gaps as their primary implementation challenge. Specific pain points include: supply chain traceability to the farm or extraction site level (required for upstream LEAP assessments but achievable for only 15 to 30% of supply chain volume for most companies); absence of baseline biodiversity data for many operating locations, particularly in emerging markets; and lack of standardized metrics for marine and freshwater ecosystem health.

The LEAP Approach Is Resource-Intensive

Completing a comprehensive LEAP assessment across a diversified organization requires significant analytical capacity that many companies lack. Anglo American's TNFD-aligned biodiversity assessment involved mapping 65 operating sites and 1,200 key suppliers against location-specific biodiversity datasets, requiring an 18-month effort by a dedicated team of 12 analysts supplemented by external consultants at a cost exceeding $3 million. For mid-cap companies or those with limited sustainability staff, this level of investment is prohibitive.

The Taskforce has published simplified guidance for small and medium enterprises, but the fundamental tension persists: meaningful nature risk assessment requires granular, location-specific analysis that cannot be reduced to sector-level proxies without losing the insights that make TNFD disclosures decision-useful.

Metrics and Targets Remain Immature

While the governance, strategy, and risk management pillars of TNFD have clear implementation pathways, the metrics and targets pillar remains underdeveloped. The Science Based Targets Network published its initial corporate nature target-setting guidance in May 2023, but as of early 2026, fewer than 40 companies globally have set validated nature targets through SBTN. The lack of agreed-upon metrics for nature-positive outcomes means that many early TNFD disclosures default to input or activity metrics (hectares assessed, number of sites screened) rather than outcome metrics (measurable improvement in ecosystem condition).

The absence of a universally accepted "nature-positive" definition comparable to "net zero" for climate further complicates target-setting. The Global Biodiversity Framework sets high-level targets (30x30, halt and reverse biodiversity loss by 2030), but translating these into corporate-level, science-based targets with measurable KPIs remains an active area of methodological development.

Comparability Across Disclosures Is Limited

Early TNFD disclosures vary dramatically in scope, depth, and methodology. Some organizations report on direct operations only; others attempt full value chain assessments. The choice of biodiversity metrics, ecosystem condition indicators, and spatial analysis tools differs widely. A review of the first 50 published TNFD-aligned reports by the UN Environment Programme Finance Initiative found "significant heterogeneity in reporting boundaries, metric selection, and assessment methodologies that limits the ability of investors to compare nature risk exposure across portfolio companies" (UNEP FI, 2025).

Key Players

Established Organizations

• TNFD Secretariat: maintains the framework, publishes implementation guidance, and coordinates the early adopter program with a secretariat based in Geneva and supported by UNDP
• ISSB (International Sustainability Standards Board): announced a research project on biodiversity and ecosystems in late 2025, expected to produce a nature-related disclosure standard building on TNFD architecture
• Science Based Targets Network (SBTN): develops methodologies for corporate nature target-setting across freshwater, land, ocean, and biodiversity categories
• World Resources Institute (WRI): provides Aqueduct and Global Forest Watch tools used extensively in TNFD LEAP assessments for water stress and deforestation screening
• CDP: integrated TNFD-aligned questions into its 2025 disclosure questionnaire, reaching over 23,000 companies globally

Startups and Innovators

• NatureMetrics: provides environmental DNA (eDNA) biodiversity monitoring services that generate location-specific species data for TNFD assessments at a fraction of traditional ecological survey costs
• Pivotal: offers satellite-based nature risk analytics combining land use change, water stress, and biodiversity indicators into investment-grade risk scores
• Earthmind: develops AI-powered supply chain mapping tools that link commodity sourcing to specific landscapes and associated nature dependencies
• Chloris Geospatial: delivers above-ground biomass and carbon stock monitoring using satellite radar data, increasingly used for TNFD forest-related disclosures

Investors and Finance

• Robeco: published one of the most comprehensive TNFD-aligned reports among asset managers, covering nature risk screening across $180 billion in listed equity holdings
• AXA Investment Managers: developed a proprietary biodiversity footprint tool assessing portfolio impacts on species abundance across 12,000 companies
• CDPQ (Caisse de depot et placement du Quebec): committed to completing TNFD-aligned assessments across its real assets portfolio by 2027
• Finance for Biodiversity Foundation: coordinates a pledge signed by 170 financial institutions with $21 trillion in assets to protect and restore biodiversity through their activities and investments

KPI Benchmarks

Metric	Leading Practice	Average Adopter	Lagging
LEAP assessment coverage (% of revenue assessed)	>80%	30-50%	<15%
Supply chain traceability to site level	>60% of volume	15-30% of volume	<5% of volume
Number of priority locations assessed	>50	10-25	<5
Nature targets set (SBTN-validated)	Targets validated	Targets in development	No target process initiated
Biodiversity data sources used	5+ (satellite, eDNA, field, IBAT, modeled)	2-3 sources	IBAT screening only
Disclosure alignment with TNFD pillars	All 4 pillars addressed	2-3 pillars addressed	Governance only
Board-level nature governance	Dedicated committee or agenda item	Included in existing ESG committee	No board-level discussion

Action Checklist

• Conduct a materiality screening using the TNFD sector guidance relevant to your industry to identify which nature-related dependencies and impacts are most material
• Complete a Locate phase assessment using IBAT, WRI Aqueduct, and Global Forest Watch to map operations and key supply chain nodes against biodiversity-sensitive and water-stressed areas
• Engage procurement teams to improve supply chain traceability to the site or landscape level for priority commodities, starting with the top 5 commodities by sourcing volume
• Establish a cross-functional TNFD working group including sustainability, risk management, procurement, and finance functions to coordinate the LEAP assessment process
• Begin baseline biodiversity monitoring at priority operating sites using a combination of eDNA sampling, remote sensing, and existing ecological survey data
• Evaluate the Science Based Targets Network guidance to determine readiness for setting validated nature targets across freshwater, land, and biodiversity categories
• Align TNFD disclosure timelines with existing TCFD and CSRD reporting cycles to minimize duplication of governance and strategy disclosures
• Brief the board and audit committee on nature-related financial risks identified through the LEAP process and establish ongoing governance structures

FAQ

Q: How does TNFD relate to TCFD, and can I use my existing TCFD process? A: TNFD was explicitly designed to build on the TCFD architecture, using the same four-pillar structure (Governance, Strategy, Risk and Impact Management, Metrics and Targets). Organizations with mature TCFD processes can leverage existing governance structures, scenario analysis capabilities, and reporting workflows. However, nature risk assessment requires additional capabilities that climate risk processes typically do not cover: location-specific biodiversity screening, upstream supply chain traceability to the landscape level, and assessment of dependencies on ecosystem services such as pollination, water purification, and soil fertility. Most organizations find that 40 to 60% of their TCFD infrastructure is transferable to TNFD, with the Evaluate and Assess phases of the LEAP approach requiring net-new analytical capacity.

Q: What data sources are available for companies starting their first LEAP assessment? A: The most accessible starting points include the Integrated Biodiversity Assessment Tool (IBAT) for screening operating and sourcing locations against protected areas and key biodiversity areas ($5,000 to $25,000 per year depending on usage tier); WRI Aqueduct for water risk screening (free); Global Forest Watch for deforestation monitoring (free); and the ENCORE tool (Exploring Natural Capital Opportunities, Risks, and Exposure) developed by UNEP-WCMC for sector-level dependency and impact identification (free). For more granular assessments, commercial providers such as NatureMetrics (eDNA biodiversity monitoring), Pivotal (satellite-based nature risk analytics), and S&P Global Sustainable1 (nature risk scoring) offer location-specific data products. Most organizations begin with free screening tools and progressively invest in higher-resolution data for priority locations identified in the Locate phase.

Q: Is TNFD reporting mandatory, and when might it become so? A: As of early 2026, TNFD reporting is voluntary in most jurisdictions. However, several regulatory developments are narrowing the gap between voluntary and mandatory. The EU's CSRD requires biodiversity and ecosystem disclosures (ESRS E4) for in-scope companies starting with fiscal year 2024 reports, and these requirements are substantially aligned with TNFD. France's Article 29 of the Energy-Climate Law already requires financial institutions to report on biodiversity risks. In Canada, OSFI's draft guidance recommends TNFD-aligned nature risk assessment for federally regulated financial institutions. The ISSB's decision to develop a nature-related disclosure standard signals that TNFD-based requirements will likely be incorporated into IFRS Sustainability Disclosure Standards within the next 2 to 3 years, at which point jurisdictions that have adopted ISSB standards (including Canada, the UK, and several Asia-Pacific countries) would effectively mandate TNFD-aligned reporting.

Q: How much does a TNFD-aligned assessment and disclosure process cost? A: Costs vary significantly based on organizational complexity and ambition level. For a mid-cap company with 10 to 20 operating sites and a moderately complex supply chain, a first-year LEAP assessment and disclosure process typically costs $200,000 to $500,000 including external consultant support, data subscriptions, and internal staff time. Large diversified companies with global supply chains report first-year costs of $1 million to $3 million or more. Annual ongoing costs for data management, monitoring, and reporting typically decline to 40 to 60% of first-year costs as internal capabilities mature and data systems are established. These costs should be weighed against the risk mitigation value: Rabobank estimated that its TNFD-aligned assessment identified $2.1 billion in agricultural loan exposures that warranted enhanced monitoring, a finding with material credit risk management value.

Sources

• TNFD. (2025). Status Update on Early Adopters and Framework Implementation. Geneva: Taskforce on Nature-related Financial Disclosures.
• NGFS. (2024). Nature-related Financial Risks: A Conceptual Framework to Guide Action by Central Banks and Supervisors. Paris: Network for Greening the Financial System.
• World Benchmarking Alliance. (2025). Nature Benchmark: Assessing Corporate Readiness for TNFD Disclosure. Amsterdam: WBA.
• Cambridge Institute for Sustainability Leadership. (2025). TNFD Implementation Survey: Challenges and Lessons from Early Adopters. Cambridge: University of Cambridge.
• UNEP Finance Initiative. (2025). Review of TNFD-Aligned Disclosures: Quality, Comparability, and Decision-Usefulness. Geneva: UNEP FI.
• TD Bank Group. (2025). Nature-Related Financial Disclosures: Agricultural Lending Portfolio Assessment. Toronto: TD Bank Group.
• Science Based Targets Network. (2024). Corporate Nature Target Setting: Technical Guidance v1.1. Amsterdam: SBTN.
• World Economic Forum. (2025). Global Risks Report 2025. Geneva: WEF.