TNFD Reporting in Practice: What Early Nature Disclosures Actually Look Like

The number of organisations publishing nature disclosures doubled in a year. The average depth of those disclosures went down.

Both facts come from the same document, TNFD's 2026 Status Report, published this month. More than 1,000 organisations across 56 countries or areas have now published first, second or third generation TNFD-aligned reports, a 100 per cent increase on the number identified in 2025. Average disclosure per organisation remained above 8 of the 14 recommended disclosures, having declined slightly against the previous year.

That is what an early-stage reporting regime looks like from the inside. The people who went first are getting better. The people arriving now are starting where the early adopters started, and there are a lot more of them.

What The Status Report Says

802 organisations are formally registered as TNFD Adopters, committing to publish aligned disclosures for a financial year between 2024 and 2027. Financial institutions among them represent 26.6 trillion dollars in assets under management. More than 100 have now published a third annual cycle of TNFD-aligned reporting, and that is the cohort worth studying, because they have had time to fix their first attempt.

The investor survey inside the report is more striking than the adoption count. Every investor surveyed expressed concern about the effects of nature loss on financial markets. Fifty-nine per cent placed nature among their organisation's three most important sustainability topics. More than 70 per cent said they want the greater certainty that mandatory nature-related reporting would bring. And 76 per cent have either conducted a LEAP assessment or have one underway.

That last figure is the one to sit with. Three quarters of surveyed investors are running the same assessment methodology they will eventually ask their holdings to have run.

LEAP Is The Assessment, Not The Disclosure

A distinction gets lost constantly and causes real confusion in reports.

LEAP is a four-phase assessment approach: Locate your interface with nature, Evaluate your dependencies and impacts, Assess your risks and opportunities, Prepare to respond and report. It is internal diligence, published as assessment guidance rather than as part of the recommendations themselves, and nothing obliges an organisation to use it.

What TNFD recommends disclosing is something else: the 14 recommended disclosures, set across the four pillars inherited from TCFD, namely governance, strategy, risk and impact management, and metrics and targets. The final recommendations were published in September 2023, which makes this year's status report a three-year mark.

Many published reports describe their LEAP process at length and then disclose comparatively little of what it produced. Reading a dozen of them in sequence, the pattern is hard to miss: three pages on methodology, half a page on findings. That is not dishonesty. It is what happens when the methodology is defensible and the findings are not yet.

The Locate Step Is Where Most Assessments Stall

Locating direct operations is straightforward for most companies. You know where your factories and offices are. Overlaying those coordinates against protected areas, key biodiversity areas, water stress indices and species range data is a GIS exercise that a competent consultant completes in weeks.

The value chain is the problem, and for almost every sector the value chain is where the material nature interface sits.

Tesco's palm oil pilot is the clearest published example. Traceability ran to district level in Indonesia, not to plantation, so the company used volumetric analysis to estimate its procurement volumes alongside the biodiversity footprint of the districts it was likely sourcing from, drawing on Trase to map the trade flows. Priority districts were then picked out for closer work.

IndusInd Bank approached it from the lending side, applying the first two LEAP phases to the agriculture component of its Indian corporate loan portfolio. It located the interface and evaluated dependencies and impacts using ENCORE at sector level, which is a reasonable place to start and, for reasons the next section covers, a poor place to stop.

That is the general shape of the problem. You know the port. You know the processor. You do not know the plot or the catchment, and nature risk is almost entirely a function of the catchment.

The honest disclosures say this. They state which tiers of the value chain were assessed, which were not, and what proxy was used where direct data was unavailable. The weak ones report a count of priority locations without naming any of them or explaining how the cut-off was drawn, which tells a reader nothing and cannot be assured.

The Dependency Data Problem Nobody Wants To Say Out Loud

Almost every nature assessment published so far leans on ENCORE, the database linking economic activities to ecosystem service dependencies and environmental pressures. It is the best tool available and the work would be much harder without it.

It is also being used for something it explicitly does not claim to do.

ENCORE's own limitations page says the materiality ratings indicate a typical level at global level, and that actual materiality is likely to vary significantly depending on the specific context, company and location assessed. It says the qualitative links represent potential dependencies and impacts, and encourages all users to go deeper and assess their actual position. It states that ratings are not designed to enable comparison across different ecosystem services or pressures, so you cannot conclude from ENCORE that water use matters more to your business than invasive species introduction, even where both carry a rating. Value chain coverage extends two tiers upstream and downstream, which can miss extraction and primary production entirely. Fossil fuels are excluded from the natural capital stock assessment. And the knowledge base contains no location-specific information at all.

Set that against what appears in published disclosures: sector-level output presented as company-level findings, with no site work behind it and no acknowledgement of the gap.

This is the single largest methodological weakness in early nature reporting, and it will be the first thing a competent assurance provider asks about. The fix is not to abandon ENCORE. It is to use it as a screening tool, say so, and then do location work on whatever it flags.

What Separates A Useful Disclosure From A Decorative One

Read enough of these and the difference becomes obvious quickly.

A decorative disclosure says the company has identified water as a material dependency. No basin, no volume, no stress level, no counterfactual.

A useful one names the catchments, states the abstraction volume in each, gives the water stress classification, explains what share of production sits in the stressed ones, and says what happens to output if allocation is cut. It is the same sentence structure you would use for a currency exposure.

The same test applies to impacts. "We have impacts on land use change in our supply chain" is not a disclosure. "Sourcing for these three commodities covers this much land area in these landscapes, of which this proportion is within or adjacent to a key biodiversity area" is.

On metrics, the common failure is lifting TNFD's core global indicators into a table with no baseline and no target. An indicator without a baseline year is a number, not a metric.

And on governance, the disclosures that read credibly are the ones where nature sits inside an existing risk committee with a named owner, rather than in a new nature working group that reports to nobody with budget authority.

Nature Is About To Stop Being Voluntary

The voluntary window is closing faster than most companies have planned for, through three separate routes.

At its April 2026 meeting the ISSB agreed to propose nature-related disclosure requirements as an IFRS Practice Statement, drawing on the TNFD framework and complementing IFRS S1 and S2 without amending either. An exposure draft is planned for October 2026, which is next month. Chair Emmanuel Faber's framing is worth quoting because it moves the deadline: "Providing material nature-related disclosures is not optional; IFRS S1 already requires that. A Practice Statement will guide companies on how to provide such disclosures." On that reading, companies in ISSB-adopting jurisdictions are already late, and the exposure draft concerns method rather than obligation. A Practice Statement also moves considerably faster than a full standard, which is presumably part of why that route was chosen.

GRI 101 Biodiversity 2024, published in January 2024, is effective for reports or other materials published on or after 1 January 2026, replacing GRI 304. Disclosure 101-4 requires organisations to explain how they determined which of their sites and which supply chain products and services carry the most significant actual and potential biodiversity impacts, with suppliers assessed beyond the first tier. Disclosures 101-5 through 101-8 then carry the site-level substance: locations with biodiversity impacts, direct drivers of biodiversity loss, changes to the state of biodiversity, and ecosystem services.

ESRS E4 applies where biodiversity and ecosystems emerge as material under double materiality assessment. For agriculture, food, forestry, extractives, apparel, pharmaceuticals and construction materials, that outcome should be assumed rather than hoped against.

Sitting behind all three, CBD COP17 convenes in Yerevan from 19 to 30 October 2026 and will mark the first global review of collective progress against the Kunming-Montreal Global Biodiversity Framework. Target 15, which calls on businesses to assess, disclose and reduce biodiversity-related risks and negative impacts, is the provision to watch, because a weak review outcome generally produces pressure for firmer national measures rather than less.

Six Things To Have In Place

Build the location register first. Every owned, leased and managed site with coordinates, plus the best available geography for upstream sourcing. This is the asset that every framework draws on, it takes the longest to assemble, and nothing downstream works without it.

Separate screening from assessment in your documentation. Record what ENCORE or a comparable tool flagged, then record what you did to test it. The gap between the two is what assurance will examine.

Name your priority locations and publish the criteria that produced the list. An unexplained count invites the assumption that the list was drawn to be short.

Give every metric a baseline year and a target, or leave it out. A table of unanchored indicators is worse than a shorter table of real ones.

Read the ISSB exposure draft when it lands next month and respond to it. Nature reporting requirements are being written now, by a body whose standards are being adopted across dozens of jurisdictions, and the comment window is the cheapest influence available.

Put nature inside an existing governance structure. A standalone working group signals that the topic is being handled adjacent to the business rather than inside it, and readers have learned to interpret it that way.

The organisations three cycles into this describe the same arc. The first report is about method. The second is about data gaps. The third is the first one that says anything a reader could act on. There is no shortcut through that sequence, but knowing it exists means you can plan for a thin first report rather than being surprised by one.

Position as of 24 September 2026. TNFD recommendations are voluntary and the framework, sector guidance and metrics continue to develop. ISSB nature-related proposals were at exposure draft stage at the time of writing and the final form may differ. GRI 101, ESRS E4 and any national requirements apply according to their own scope and effective dates. Confirm current requirements against TNFD, the IFRS Foundation, GRI, EFRAG and your own regulators, and take professional advice for your circumstances.

Sources

Taskforce on Nature-related Financial Disclosures, TNFD 2026 Status Report, TNFD Recommendations and LEAP Approach Guidance, ENCORE, Global Canopy, Trase, International Sustainability Standards Board, IFRS Foundation, Global Reporting Initiative, GRI 101 Biodiversity 2024, European Financial Reporting Advisory Group, ESRS E4 Biodiversity and Ecosystems, Secretariat of the Convention on Biological Diversity, Kunming-Montreal Global Biodiversity Framework, United Nations Development Programme, edie

This article is intended for general professional information and does not constitute legal, financial, or investment advice.