TNFD explained: nature risk, LEAP and corporate reporting

The Taskforce on Nature-related Financial Disclosures (TNFD) is a framework for explaining how companies depend on nature, affect nature and face nature-related financial risks. It is not a biodiversity badge. It is a way to make nature risk visible to decision-makers.

Data checked

This article was checked on 12 June 2026. TNFD adoption, reporting practice and nature-related disclosure expectations are developing quickly. Check the latest TNFD recommendations, adopter lists and regulatory guidance before relying on any disclosure requirement.

Related guides

For related reporting context, read TCFD explained, ESG explained, the CSRD guide, double materiality assessments, ESG reporting frameworks compared and greenwashing explained.

Climate reporting has become more familiar because investors, companies and regulators have spent years building language around carbon, targets, transition plans and climate risk. Nature risk is less mature, but it is moving in the same direction.

That does not mean nature will become a copy of climate. Nature is harder to measure, more location-specific and more dependent on ecosystems, water, soil, species, land use and supply chains. A tonne of carbon dioxide equivalent (CO2e) can be compared across geographies more easily than a damaged wetland, pollinator decline or water-stressed watershed.

TNFD matters because it gives companies a structure for that harder conversation. It asks what the business depends on, what it affects, what risks emerge and how those risks should be governed, measured and disclosed.

Core idea

TNFD is not asking whether a company is "good for nature" in a simple sense. It is asking whether the company understands the nature-related dependencies, impacts, risks and opportunities that could affect the business, its stakeholders and the places where it operates.

Quick answer

What TNFD is

TNFD is a disclosure framework designed to help organisations report nature-related dependencies, impacts, risks and opportunities. It published its final recommendations in September 2023 and has since become a key reference point for companies, financial institutions and investors trying to understand nature-related financial risk.

The framework is voluntary. It does not create a law by itself. But voluntary frameworks can still become influential when investors, lenders, regulators, customers and reporting standards start using the same language.

That is what happened with the Task Force on Climate-related Financial Disclosures (TCFD). TCFD began as recommendations, then became part of the climate-reporting architecture used by companies and regulators. TNFD is younger, and nature reporting is more complex, but the institutional pattern is familiar.

TNFD is built around four disclosure pillars:

Why nature risk is different from climate risk

Climate risk is complex, but it has one dominant global metric: greenhouse gas emissions. Nature risk has no single equivalent. That is why nature reporting is often harder to explain and harder to compare.

A business may depend on water availability, soil quality, pollination, timber, fisheries, land stability, flood protection or ecosystem services. It may also affect nature through land conversion, pollution, water extraction, waste, deforestation, habitat fragmentation or supply-chain sourcing.

Those issues are place-specific. Water risk in one river basin is not the same as water risk in another. Biodiversity impact in a protected habitat is not the same as impact in a heavily modified industrial area. A supplier's land-use practices may matter more than the company's head office energy use.

This is why TNFD cannot simply copy carbon accounting. It needs location, sector, dependency and impact analysis.

Dependencies, impacts, risks and opportunities

TNFD language turns nature into four connected questions.

The distinction matters because nature disclosure is not just a list of environmental harms. It is also a business-risk map. A company can have low direct emissions and still face large nature-related risk if it depends on fragile supply chains, water-stressed regions or land-use practices that are becoming harder to defend.

The LEAP approach

TNFD's suggested assessment approach is called LEAP: Locate, Evaluate, Assess and Prepare.

LEAP is not a mandatory reporting requirement. It is a practical process companies can use to identify and assess nature-related issues before deciding what to disclose.

The "Locate" step is the part many companies underestimate. Nature risk cannot be assessed properly if the company does not know where the relevant assets, suppliers and activities are. A generic sector-level description is usually not enough.

TNFD and the four disclosure pillars

TNFD uses a structure that will feel familiar to readers of climate disclosure. Governance, strategy, risk management, and metrics and targets are also central to TCFD and International Sustainability Standards Board (ISSB) climate reporting.

The difference is that TNFD adds nature-specific content. Companies need to consider whether the board understands nature-related issues, whether strategy is exposed to nature loss, whether risk processes capture place-based dependencies and whether the metrics used are meaningful.

A weak TNFD-style disclosure might say that the company cares about biodiversity. A stronger disclosure would identify priority locations, material dependencies, main impact pathways, governance ownership, risk processes, targets, data limitations and planned improvements.

TNFD vs TCFD

TNFD was deliberately influenced by TCFD, but the frameworks are not the same.

For many companies, climate and nature risk overlap. Deforestation can create emissions and biodiversity loss. Water stress can affect operations and supply chains. Land-use change can affect carbon storage, ecosystem resilience and community relationships.

That overlap is why nature risk is becoming relevant to climate strategy, not just corporate social responsibility.

TNFD vs CSRD

The Corporate Sustainability Reporting Directive (CSRD) is a European Union reporting regime. TNFD is a voluntary disclosure framework. That means they do different jobs, but they can overlap in practice.

CSRD uses European Sustainability Reporting Standards (ESRS), including environmental standards on pollution, water and marine resources, biodiversity and ecosystems, and resource use and circular economy. It also uses double materiality, which asks companies to consider both financial materiality and impact materiality.

TNFD can help companies think through nature-related dependencies, impacts, risks and opportunities in a way that supports better reporting. It does not replace CSRD, and it does not decide legal scope. But for companies working through biodiversity, water, land-use or ecosystem-service questions, TNFD-style analysis can be a useful input.

What companies should do first

Most companies should not start with a polished nature report. They should start with a map.

The first useful step is to identify where the business touches nature. That includes owned sites, leased assets, key suppliers, high-risk commodities, logistics routes and financed assets where relevant. Without location and supply-chain mapping, nature reporting can become vague very quickly.

A practical first-year TNFD-style process might look like this:

1. Identify high-dependency and high-impact activities.
2. Map priority locations and suppliers.
3. Check exposure to water stress, protected areas, deforestation risk, pollution risk and biodiversity sensitivity.
4. Review governance ownership for nature-related issues.
5. Decide which data gaps matter most.
6. Set a realistic improvement plan for disclosure, supplier engagement and risk management.

The point is not to pretend the data is perfect. It is to make the uncertainty visible and show how the company will improve it.

Why investors care

Investors care about nature risk because nature loss can become financial risk. That can happen through supply disruption, higher costs, asset impairment, regulation, litigation, loss of permits, customer pressure, insurance risk and reputational damage.

For example, a food manufacturer exposed to deforestation-linked commodities may face regulatory and customer pressure. A mining company may face permitting risk, water conflict and biodiversity-offset obligations. A property or infrastructure company may face flood, heat, land-use or habitat constraints. A lender may discover that parts of its portfolio depend on fragile ecosystems or weak traceability.

TNFD gives investors a more structured way to ask these questions. It does not make the answers easy, but it gives the conversation a shape.

What good TNFD-style disclosure looks like

A useful nature disclosure should be specific enough to help a reader understand risk. It should not rely only on broad commitments to protect biodiversity or support nature-positive outcomes.

Good disclosure is likely to include:

• Clear governance ownership for nature-related issues.
• Priority sectors, assets, regions or commodities.
• Specific dependencies and impacts.
• Evidence of location-based assessment.
• Material risks and opportunities.
• Data limitations and improvement plans.
• Metrics that are relevant to the business model.
• Links between nature risk, climate risk and strategy.

The best disclosures will probably be honest about uncertainty. Nature data is not always complete, especially in long supply chains. A credible report should show what the company knows, what it does not know yet and what it is doing next.

Common weaknesses

Generic biodiversity language

Statements about caring for nature are not the same as risk disclosure. Readers need to know where the company interacts with nature and which issues are material.

No location analysis

Nature risk is place-based. A report that does not discuss location, sensitive ecosystems or supply-chain geography is likely to miss the point.

Confusing nature claims with nature risk

A company may make a positive biodiversity claim while still having material nature dependencies or impacts elsewhere in the business.

Treating nature as separate from climate

Climate and nature issues often reinforce each other. Deforestation, land-use change, water stress and agriculture can connect emissions, biodiversity, resilience and supply-chain risk.

Using a score without explaining the method

Nature scores can be useful, but only if readers understand the data, assumptions, limitations and context behind them.

FAQ

Is TNFD a regulation?

No. TNFD is a voluntary framework. However, companies may still face nature-related reporting expectations through other regulations, investor requests or customer requirements.

Is TNFD only for large companies?

The framework is mainly used by larger companies and financial institutions, but smaller companies may still encounter TNFD-style questions through supply-chain requests, lenders or customers.

Does TNFD replace TCFD?

No. TNFD covers nature-related issues. TCFD covers climate-related financial disclosure. The two frameworks overlap in structure, but not in subject matter.

Does TNFD require companies to be nature positive?

No. TNFD is a disclosure framework. It helps organisations explain dependencies, impacts, risks and opportunities. It does not automatically certify that a company is nature positive.

What is the biggest practical challenge?

Location and supply-chain data. Companies need to know where material activities and dependencies sit before they can properly assess nature-related risk.

Bottom line

TNFD is important because nature risk is becoming harder for companies and investors to ignore. It gives a structure to a problem that can otherwise feel too broad to manage.

The useful way to read TNFD is not as a nature badge. It is a disclosure architecture. It asks where a business depends on nature, where it affects nature, which risks follow and what governance, strategy, metrics and targets are needed in response.

That is the same shift climate reporting went through: from broad responsibility language to decision-useful risk disclosure. Nature is harder to measure than carbon, but the direction of travel is similar.

Useful source links

• TNFD: Recommendations
• TNFD: Publications and LEAP guidance
• TNFD: Adopters
• IFRS Foundation: TCFD and ISSB
• European Commission: Corporate sustainability reporting
• EFRAG: European Sustainability Reporting Standards