Why Adopt TNFD? Why businesses are adopting the Nature-related Financial Disclosures framework

In November 2025 the International Sustainability Standards Board (ISSB) announced that it would build its forthcoming nature-related reporting work on the framework created by the Taskforce on Nature-related Financial Disclosures (TNFD). By then, according to TNFD adoption figures, more than 733 organisations had committed to adopting or aligning with the voluntary framework, including financial institutions managing $22.4 trillion in assets. The ISSB's decision signalled that nature-related disclosure is becoming a more established part of the evolving corporate reporting landscape.

 

More businesses are choosing to engage with TNFD now, before anyone requires them to. The useful question is not what the framework is, but why they are moving, and what they gain by preparing early. The answer is that nature-related issues affect the parts of a business that finance and operations teams already worry about: operational resilience, supply-chain continuity, cost management, risk assessment and long-term strategic planning.

 

Nature risk is a financial risk

 

The World Economic Forum has estimated that around $44 trillion of economic value, more than half of global GDP, is moderately or highly dependent on nature. That dependency runs through freshwater, healthy soils, stable ecosystems, raw materials and pollination, and it rarely shows up on a balance sheet until it fails.

 

The evidence that nature-related disruption creates financial exposure comes from institutions focused on measuring and pricing risk. S&P Global has found that 85% of the world's largest companies have a significant dependency on nature, and that nearly half have at least one facility in a Key Biodiversity Area. The International Monetary Fund has warned that a large share of major banks' lending is exposed to sectors and locations vulnerable to nature loss. 

 

The transmission into business performance is visible in ordinary commercial terms. Drought pushes cocoa and coffee to record prices. Floods close factories and interrupt logistics. Water stress halts production at plants that assumed a reliable supply. Each of these is a nature problem that arrives as an operational or financial one, affecting continuity, input costs and the assumptions built into a strategic plan. Treated as an environmental concern, nature is easy to defer. Treated as an input to cost, continuity and long-term strategy, it demands the same discipline a company already applies to climate or currency exposure.

 

What adopting TNFD actually gives a business

 

TNFD's usefulness is that it turns a diffuse worry into a method. Its assessment approach, called LEAP (Locate, Evaluate, Assess and Prepare), guides a company through where it touches nature, which of those points matter financially, what risks and opportunities follow, and how to respond. Its disclosure structure then organises what gets reported: 14 recommended disclosures across four pillars (governance, strategy, risk and impact management, and metrics and targets), mirroring the climate-reporting architecture most large companies already know.

 

Adoption itself can start small. A company can begin with the disclosures it can evidence now and expand their depth and coverage over time, rather than waiting until it can report on everything at once. This gradual approach is important because TNFD adoption is not a one-time reporting exercise. It requires companies to build their understanding of nature dependencies, improve data quality and strengthen internal processes over time.

 

Companies may begin by using TNFD internally to understand dependencies and risks before moving toward external disclosure. This preparation phase is often where much of the business value is created. That is why TNFD is not just a reporting exercise, but a way for a company to understand and manage its nature-related risks.

 

Emilio Tejedor, Global Head of Environment at Iberdrola, “The TNFD framework has arrived at a perfect moment to facilitate sound and comparable nature-based risk assessment, enabling a proper report to the company’s senior management, bringing nature as part of the company’s decision-making process.”​

 

TNFD builds on the frameworks companies already use

 

One reason companies are engaging with TNFD is that the framework was never designed to stand alone. It was built on the four-pillar architecture of the Taskforce on Climate-related Financial Disclosures (TCFD), so it is familiar to anyone who already reports on climate, and it was made to align with the sustainability frameworks companies use today rather than to compete with them.

 

TNFD has published interoperability guidance showing strong alignment with the European Sustainability Reporting Standards (ESRS), helping companies understand where nature-related disclosures overlap. A joint mapping with the Global Reporting Initiative (GRI) shows significant alignment, helping companies already reporting under GRI understand how existing processes and data can support TNFD-related disclosures.

 

In India, guidance from the TNFD, the Confederation of Indian Industry and the India Business & Biodiversity Initiative shows that most of the 14 recommended disclosures already overlap with the Business Responsibility and Sustainability Reporting (BRSR) requirements that apply to the country's top 1,000 listed companies. CDP, the environmental disclosure platform and a long-standing TNFD partner, has aligned its corporate questionnaire with the recommendations, giving companies a familiar channel to report TNFD-aligned data. And ISO 17298, the first international standard for biodiversity in business strategy and operations, builds on the TNFD's LEAP approach.

 

For a company, this is what makes adoption practical rather than additive. Nature reporting under TNFD is not a separate exercise bolted onto everything else. It draws on the same data and structures a company is already building for its other disclosures, which means aligning early puts those pieces in place and keeps them consistent as expectations around nature information continue to grow.

 

Investors are asking, and expecting answers

 

Part of that expectation is already arriving through the capital markets. Through the Nature Action 100 initiative, more than 240 institutional investors representing over $30 trillion in assets are pressing large companies in nature-dependent sectors to assess and disclose their exposure. Norges Bank Investment Management, among the world's largest investors, has said it needs harmonised, financially relevant nature reporting to inform its ownership and investment decisions.

 

The benefit is more specific and more durable. Better nature-related information improves the quality of investor conversations, gives capital providers clearer risk information to work with, and strengthens the credibility of a company's disclosures because they are structured, comparable and evidenced. In some markets, nature-related targets are already being written directly into financing: City Developments Limited, a Singapore real estate company and the first in the country to publish TNFD-aligned disclosures, secured a sustainability-linked loan from DBS Bank with terms tied to its TNFD-aligned nature targets. As investor questions on nature grow sharper, the ability to answer them with data rather than assurances becomes increasingly valuable.

 

The case for preparing early

 

For the companies already engaged, the logic is preparation, not simply being first. Starting now lets a business find the nature-related risks buried in its operations and supply chains, build the internal capability to manage them, and fold them into enterprise risk management before any external deadline forces a rushed exercise. It improves understanding before expectations increase, and reduces the risk of future reporting assembled at speed and under pressure.

 

GSK has tied its commitment to business resilience, and a Fibra Uno executive has described treating nature-related risks as core financial risks, built into underwriting and capital allocation. Early work also tends to surface opportunities, such as products, markets and efficiencies that only become visible once a business understands its relationship with nature. And the reporting burden is smaller than many fear, because companies already reporting under frameworks such as GRI, ESRS or CDP can reuse much of that work rather than build their nature disclosures from scratch.

 

Nature-related reporting is becoming part of mainstream corporate reporting

 

Public disclosure is where the internal work starts to pay off. A TNFD-aligned report gives investors, lenders, customers and boards a clear and comparable view of how a company understands and manages its nature-related risks and opportunities, and it shows that nature is being handled with the same rigour as other material issues. The act of reporting also sharpens the work behind it, prompting a company to gather better data, assign ownership and track progress from one year to the next. And as more companies and financial institutions disclose, nature-related reporting is quickly becoming a normal part of strong corporate reporting rather than a leading-edge choice.

 

TNFD remains voluntary, but the capabilities it encourages, such as understanding nature dependencies, assessing exposure and strengthening governance, are becoming increasingly relevant for companies managing long-term risk.

 

What this means for your business

 

The first move is not to commission a report. It is to build an understanding of where nature sits in the business, and then let disclosure follow that understanding. A practical sequence looks like this:

 

• Identify where the business depends on nature and where it affects nature in return.
• Map the key locations and value-chain nodes that carry the most exposure.
• Assess which of those risks are financially material to the business.
• Assign clear internal ownership for nature-related risk.
• Build the governance and reporting processes before disclosure expectations increase.

 

Approached this way, engaging with TNFD is less a sustainability commitment than the development of a business capability: the ability to see, price and manage a category of risk and opportunity that many organisations still cannot describe. Understanding nature-related risk is becoming an important part of effective business management, and meaningful disclosure follows that understanding rather than replacing it.

 

 

Where businesses can start with TNFD

A quick reference for readers who want to act. All of the following are available through the TNFD website, tnfd.global.

• Register as a TNFD Adopter – TNFD
• Getting started with adoption of the TNFD Recommendations – TNFD
• Taskforce on Nature-related Financial Disclosures (TNFD) Recommendations – TNFD
• Guidance on the identification and assessment of nature-related issues: the LEAP approach – TNFD
• Knowledge Hub – TNFD
• Case study library – TNFD
• Example TNFD reporting – TNFD