Nature loss is rapidly becoming a mainstream financial risk. The Taskforce on Nature‑related Financial Disclosures (TNFD) provides a structured framework for organisations to identify, assess and disclose their dependencies, impacts, risks and opportunities linked to nature and biodiversity. Analysis by the World Economic Forum indicates that around half of global GDP, equivalent to roughly 44 trillion dollars of economic value generation, is moderately or highly dependent on nature and its services. As value chains rely on ecosystem services such as water, soil health and pollination, nature degradation is no longer an externality; it is a core driver of operational resilience, asset values and long‑term returns.
A brief history of TNFD
TNFD was announced in 2020 in response to growing recognition that nature‑related risks needed the same level of structure and transparency that TCFD brought to climate. It was formally launched in 2021, supported by governments, financial institutions and corporates, and its final recommendations were published in 2023 after several years of piloting and market testing. By late 2025, more than 730 organisations across over 50 countries had publicly committed to adopt TNFD, including over 180 financial institutions representing approximately 22 trillion dollars in assets under management and hundreds of listed corporates with an estimated 9-10 trillion dollars in combined market capitalisation. This trajectory shows that nature‑related disclosures are moving from an emerging topic to an expected part of mainstream reporting and risk management for both corporates and asset managers.
The TNFD framework and the LEAP approach
TNFD is built around four familiar pillars, mirroring TCFD:
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Governance - Board and management oversight of nature‑related issues.
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Strategy - How nature dependencies and impacts affect business models, resilience and plans.
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Risk & Impact Management - Processes for identifying, assessing and managing nature‑related risks and impacts.
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Metrics & Targets - Indicators and targets used to manage performance, including measures linked to ecosystem condition and exposure in sensitive areas.
At the heart of TNFD is the LEAP approach, which is its core method for turning nature‑related issues into a structured assessment that decision‑makers can use. It guides organisations step‑by‑step from understanding where they interact with nature, through evaluating dependencies and impacts, to assessing risks and opportunities and preparing responses, and is designed to be repeatable across sites, value chains and portfolios, and to integrate with existing risk, strategy and reporting processes.
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Locate – Map operations, value chains and portfolios to nature relevant locations and hotspots.
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Evaluate – Identify and, where possible, quantify key dependencies on nature (for example, water availability, pollination, soil quality) and impacts on ecosystems (such as land‑use change or habitat disturbance).
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Assess – Analyse nature‑related risks and opportunities, including scenario‑based views over different time horizons.
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Prepare – Integrate insights into governance, strategy, risk management and disclosures, and define actions and responses.
Why TNFD matters for corporates
For corporates, nature is a foundational input into operations and supply chains. Sectors such as agriculture, food and beverages, extractives, infrastructure, manufacturing and consumer goods are especially exposed, but nature risk is relevant across most industries through energy, materials, water, land use and supply chain dependencies.
TNFD matters for corporates because it:
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Links nature to core business resilience
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Nature related disruptions can affect raw material availability, production continuity, logistics and local community relationships. Incorporating TNFD concepts into enterprise risk management and strategy helps management teams understand where nature issues could affect revenues, costs and asset values.
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Supports regulatory and reporting alignment
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TNFD provides a reference point for nature‑related disclosures and can complement emerging regulatory requirements and reporting standards. For many European corporates, for example, TNFD concepts align with elements of CSRD and related standards, making it easier to build a single, coherent nature narrative rather than multiple disconnected reports.
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Enables prioritised action and investment
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By using a structured approach such as LEAP, corporates can move from generic nature commitments to a prioritised list of locations, suppliers and topics where action is most urgent, and where risk reduction or positive impact can be demonstrated. This supports more targeted capital allocation and programme design across operations and supply chains.
Why TNFD matters for asset managers
Asset managers need to understand how nature related risks and opportunities affect both individual holdings and portfolios. Nature loss can influence credit risk, equity valuations, sector outlooks and long‑term performance, particularly in nature‑intensive and nature‑dependent sectors.
TNFD matters for asset managers because it:
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Improves portfolio‑level risk insight
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TNFD concepts help identify sectors, sub‑sectors and geographies with high nature dependence or impact, and where physical, transition or systemic risks could be most material. This supports better portfolio construction, risk budgeting and scenario thinking for nature‑related risks.
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Strengthens stewardship and engagement
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Using TNFD’s language and structure, asset managers can engage portfolio companies on concrete topics: governance expectations, integration of nature into strategy, robustness of risk management processes and clarity of metrics and targets. This leads to more focused, comparable dialogues and clearer expectations for investee companies and issuers.
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Prepares for evolving client and regulatory expectations
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Investor surveys and market feedback indicate that a growing share of asset owners and clients expect nature‑related risks and opportunities to be considered alongside climate and broader ESG factors. Asset managers that are familiar with TNFD and can report using its concepts are better positioned to respond to new mandates, develop nature‑related products and meet emerging disclosure expectations.
Nature‑related risk categories
TNFD and related market work often distinguish between different types of nature related risks, which can apply to both corporates and portfolios:
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Physical risks – Direct effects from changes in ecosystems and ecosystem services, such as water scarcity affecting manufacturing operations or soil degradation reducing agricultural yields.
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Transition risks – Financial and operational impacts arising from policy, legal, market and technology changes associated with the move to a nature‑positive economy, such as new land‑use regulations or shifting customer preferences.
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Systemic risks – Broad, economy‑wide disruptions linked to large‑scale nature loss, such as the collapse of critical ecosystem services that underpin entire sectors or regions.
Understanding these categories enables corporates and asset managers to map where nature‑related risks may already be present in their operations or portfolios and where they could emerge over time.
Business and market momentum
Nature related issues are moving rapidly up the agenda for boards, regulators and investors. Regulatory developments, international biodiversity commitments and growing stakeholder expectations are driving more detailed disclosures and more structured approaches to nature risk. In parallel, investors and lenders are increasingly asking for better information on nature dependencies and impacts, and for evidence that nature considerations are integrated into corporate strategy and risk processes.
TNFD is emerging as a reference framework in this context. Organisations using its concepts and recommendations can more easily respond to information requests, align internal teams around a common language and demonstrate to markets that they are taking nature‑related risks and opportunities seriously.
From framework to operating model
For both corporates and asset managers, the importance of TNFD lies not only in disclosure templates, but in how it encourages a more systematic approach to nature within existing operating models:
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For corporates, this means embedding nature into risk registers, capital‑allocation processes, supply‑chain programmes, site‑level management and sustainability reporting.
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For asset managers, it means integrating nature into investment analysis, portfolio monitoring, stewardship strategies and reporting to clients and beneficiaries.
Many organisations will need additional analytical capacity, data support and documentation discipline to implement TNFD in practice. This is where specialist ESG delivery and assessment support can play a role, particularly for tasks such as data gathering, screening, LEAP‑based assessments and preparation of nature‑related disclosures and supporting materials.