The science is clear. Nature is deteriorating globally and biodiversity is declining faster than at any time in human history. The majority of the vital ecosystem services on which business and society depend, and which provide the foundation for every economy, are in decline.  

The global economy is already operating outside the safe zones for six of the nine planetary boundaries – processes that are critical for maintaining the Earth’s stability. Ecosystem services are not being appropriately priced by business and financial markets today. 

There is growing evidence that this poses risks for businesses, capital providers, financial systems and economies, and that these risks are increasing in severity and frequency. 

Understanding & defining nature 

Working closely with some of the world’s leading scientific and conservation organisations, the TNFD has defined key concepts, aligned with the global baseline for sustainability reporting, as the foundation of a market-accessible language system for understanding nature.   

Nature’s four realms  – land, ocean, freshwater and atmosphere  – include different types of ecosystem or ‘biome’, such as tropical forests, and rivers and streams. Ecosystems are assets that provide ‘ecosystem services’ on which society and business depend, such as freshwater for drinking and irrigation and pollination of crops by bees. Together, the concepts of realms, biomes, environmental assets and ecosystem services form key building blocks for business and finance to understand nature. 


Defining nature-related issues: dependencies, impacts, risks & opportunities 

There are four nature-related issues that need to be identified, assessed, managed and potentially disclosed to the primary users of general financial reports and other stakeholders:   

  1. Dependencies – of the organisation on nature 
  2. Impacts – on nature caused, or contributed to, by the organisation 
  3. Risks – to the organisation stemming from their dependencies and impacts 
  4. Opportunities – for the organisation that benefit nature through positive impact or mitigation of negative impacts on nature 

Business and financial institutions can have both negative and positive impacts on nature and the TNFD approach to measurement includes metrics that reflect this. Distinct from mitigating negative impacts on nature is the opportunity for business and finance to contribute to positive change in the health and resilience of nature through conservation and restoration, thereby contributing to nature-positive outcomes.  

An accelerating risk 

Critical global supply chains, from agribusiness to semiconductors, are facing disruptions from water shortages and water stress. Degradation of forests is threatening the availability and long-term security of valuable commodities and natural resources on which some sectors rely, such as cosmetics. Degradation of land and soil has been found to adversely impact the market value of companies and increase credit risk to associated lenders. The loss of pollinators is adversely impacting agricultural production, with the growing demand for pollination services becoming increasingly difficult to meet in some countries. Companies in a range of sectors, from agrochemicals to mining, which have not managed their nature-related impacts have experienced permit refusals and lawsuits, with associated deteriorations in credit ratings and market valuations.   

Central banks and financial supervisors are increasingly recognising nature loss as a source of systemic risk to financial systems and economies

In March 2022, the Network for Greening the Financial System (NGFS), a network of over 125 central banks and financial supervisors, concluded that nature-related risks could have significant macroeconomic implications, and that failure to account for, mitigate and adapt to these implications is a source of risks for individual financial institutions as well as for financial stability. In September 2023, the NGFS encouraged all central banks and supervisors to assess and act on economic and financial risks stemming from material dependencies and impacts on nature.  

Governments are also mobilising through policy and fiscal action  

In December 2022, almost 200 governments committed to ambitious goals and targets under the Kunming-Montreal Global Biodiversity Framework (GBF) to halt and reverse nature loss by 2030. Target 15 of the GBF calls for businesses to monitor, assess and transparently disclose their risks, dependencies and impacts on biodiversity, to ensure business, society and nature exist in harmony. At the same time, governments from Australia, Brazil, China, the European Union, the United States and elsewhere are providing substantial new funding and incentives to mobilise private sector innovation and financial capital behind green transition plans, new nature markets and green economy strategies.   

Most companies and capital providers remain unprepared  

According to the World Economic Forum, climate and environmental risks are now the most significant risks identified by global executives for the next decade, but they are also the risks for which we are seen to be the least prepared. Most companies, investors and lenders today do not understand their nature-related dependencies, impacts, risks and opportunities and are inadequately accounting for nature in their strategies and capital allocation decisions. Data released by CDP suggests that nearly 70% of companies disclosing data through CDP did not assess the impact of their value chain on biodiversity in 2022.

Better managing nature-related risks and identifying nature-related opportunities 

Just as investors assess the size and quality of the future cashflows of a business to determine value and investment attractiveness, policy makers, business executives and investment managers need to consider the quantity and quality of environmental assets and the future flow of ecosystem services on which society and business depend.  

Despite the growing risks associated with accelerating nature loss, most companies, investors and lenders today do not understand their dependencies and impacts on nature and are inadequately accounting for nature-related risks and opportunities in their strategies and capital allocation decisions. This is a major risk management blind spot for companies and investors and a source of potential systemic risks to economies and financial systems as the Network for Greening the Financial System (NGFS), the world’s network of central banks, identified in March 2022. Nature is now no longer a corporate social responsibility issue but a strategic risk management issue. Corporate and investor stewardship of nature is now essential to good corporate governance. 

  • ❝Nature provides irreplaceable services to societies and businesses. I applaud the TNFD’s efforts in publishing today a framework that can be utilised to identify, assess, manage and disclose dependencies and impacts on nature, as well as risks and opportunities for organisations. France, along with various French market actors, has been actively supporting TNFD’s prefiguration and work, especially since its launch in Paris in October 2021. I wish to thank the two co-chairs, Elizabeth Maruma Mrema and David Craig, as well as market actors, scientists, public authorities, and NGOs who have contributed to this framework. The integration of biodiversity by all relevant sectors is what will ensure the shift in global financial flows toward sustainability.❞

    Emmanuel Macron, President of the French Republic (2021)
  • ❝We congratulate the TNFD on this major milestone that will help investors understand the risks companies are facing when it comes to nature-related issues. We are pleased to note the high-level of consistency within the finalised TNFD recommendations and the ISSB Standards, which both incorporate the architecture of the TCFD recommendations. We will consider the TNFD’s work – subject to the outcome of our recent consultation on future priorities – as we strive to simplify the disclosure landscape to deliver consistent, comprehensive sustainability-related disclosure for investors.❞

    Sue Lloyd, Vice Chair of the ISSB
  • ❝Unless African politicians and leaders learn the lessons of others to protect nature now, the consequences will be far worse than people realise. For a collapse in biodiversity across the planet does not just mean that we face an extinction of plants and animals, but a collapse in clean water supplies, food security and the health of humans.❞

    Dr. Donald Kaberuka, former President of the African Development Bank, Co-chair of the United Nations Secretary-General’s High-Level
  • ❝The biggest enemy from the environment are governments that deny the seriousness of climate change, destroy environmental governance, incentivize predatory use of forests without moral scruples blaming the devastation victims, which are poor populations.❞

    Marina Silva, Brazil’s Minister of the Environment and Climate Change, Environmentalist, UN Champion of the Earth, Goldman Environmental Prize awardee
  • ❝With guidance and determination from governments, Indigenous Peoples, Local Communities, non-state actors, and individuals, we can all do our part to stop biodiversity loss. We can move from agreement to action. Because when we lose nature, we lose ourselves.❞

    Razan Al Mubarak, President of the International Union for Conservation of Nature (IUCN) and UN Climate Change High-Level Champion from the COP28 Presidency
  • ❝If we put together all the knowledge systems that we have — science, technology, traditional knowledge — we can give the best of us to protect our peoples, to protect our planet, to restore the ecosystem that we are losing.❞

    Hindou Oumarou Ibrahim, President of the Association for Indigenous Women and Peoples of Chad (AFPAT)

Providing material information for better decison making

Our recommendations and guidance give investors and other capital providers material information to better manage risk and make capital allocation decisions. It can help company boards and management teams identify, assess and manage nature-related issues to improve the resilience of their organisations in the face of accelerating nature loss.  

Beyond better risk management is the opportunity to mobilise business innovation and private sector finance to help halt and reverse nature loss by 2030, aligned with the goals and targets of the Global Biodiversity Framework. New financing models, including nature-based solutions, are beginning to create new commercial opportunities for business and finance that facilitate an orderly transition to a new, more resilient economic model in harmony with nature.