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Environmental, Social and Governance (ESG) topics are top of business and finance agendas. Climate change has dominated under the ‘E’ of ESG, but nature and biodiversity[1] are catching up. Three developments have helped increase the momentum: the Taskforce on Nature-related Financial Disclosures, the EU’s Corporate Sustainability Reporting Directive, and the new Global Biodiversity Framework.

[1] Nature and biodiversity are distinct but connected concepts. Nature refers to the natural world, and can be understood through four “realms”: Land, Ocean, Water and Atmosphere. Biodiversity is the living component of nature and refers to the diversity within species, between species and of ecosystems. (Source: TNFD)

From TCFD to TNFD?

Many readers will be familiar with the climate risk and opportunity reporting recommended by the Taskforce on Climate-related Financial Disclosures (TCFD). Indeed, the latest TCFD status report (PDF, 12.6MB) found that over 3,800 organisations support the TCFD and are working towards TCFD-aligned reporting. The question now is whether the newer Taskforce on Nature-related Financial Disclosures (TNFD) will follow the same path, and whether nature-related disclosures will be made mandatory in certain jurisdictions.

Those familiar with the TCFD framework will recognise similarities in TNFD as it proposes disclosures across four pillars:

  1. Governance - Disclose the organisation’s governance around nature-related dependencies, impacts, risks and opportunities.
  2. Strategy - Disclose the actual and potential impacts of nature-related risks and opportunities on the organisation’s businesses, strategy and financial planning where such information is material.
  3. Risk & impact management - Disclose how the organisation identifies, assesses and manages nature-related dependencies, impacts, risks and opportunities.
  4. Metrics & Targets - Disclose the metrics and targets used to assess and manage relevant nature-related dependencies, impacts, risks and opportunities where such information is material.

These are novel and challenging disclosures, as relatively few organisations have started incorporating biodiversity into their broader ESG governance and strategy as outlined in the figure below.

But now, over 200 organisations are piloting the TNFD guidance and there is a public consultation currently open, with the first full version of the framework expected in September 2023. This is considered the ‘final’ version, but in reality, the development process is expected to continue for years to come and more and more organisations test the framework and provide feedback.

CSRD: mandatory reporting requirements

Where the TNFD is a global, voluntary framework, the Corporate Sustainability Reporting Directive (CSRD) is EU-specific and mandatory. The CSRD significantly expands existing rules on non-financial reporting, with almost 50,000 companies across Europe likely to be affected in the coming years.

The disclosure requirements on biodiversity under CSRD go much further than the previous reporting directive, requesting information on biodiversity metrics, policies and targets. Again, organisations are asked to identify and assess material impacts, risks and opportunities that relate to biodiversity, and the TNFD is explicitly referenced.

Crucially, organisations are asked to disclose whether they have a transition plan in line with the new Global Biodiversity Framework (GBF), agreed during the UN conference in Montreal in December 2022.

What does it mean for businesses and financial institutions?

The overarching vision of the Global Biodiversity Framework is no net loss of biodiversity by 2030, net gain from 2030 and full recovery by 2050. The Framework sets out a plan for the next decade, with four long-term goals and 23 targets, spanning a wide range of topics including spatial planning, nature restoration, invasive alien species, agriculture and climate change.

So, what does the new Global Biodiversity Framework mean for business and financial institutions today?

Although almost all the targets are relevant to the private sector, Target 15 stands out. This target asks countries to take measures to ensure that organisations assess and disclose their risks, dependencies and impacts on biodiversity. The question is how national governments will interpret this and what measures they will take. Will mandatory nature disclosure become the norm? How and where will organisations be asked to disclose? How will requirements relate to the TNFD framework and CSRD disclosure requirements?


Organisations will be encouraged to see the degree of alignment and overlap between emerging frameworks such as the GBF, TNFD and CSRD. The challenge now is to get familiar with these frameworks and, crucially, get started now.

As many of the frameworks discussed above are still in development, it is tempting to adopt a ‘wait-and-see’ approach. But there is no time to lose and, as highlighted by many practitioners in this space, there are ‘no-regret’ actions that organisations can take today to get started. Chief among these is training and capacity building: this is a new topic for many people but getting informed is the prerequisite for taking the right actions.

Key considerations for Audit Committee Members include:

  • Considering whether a double materiality assessment has been carried out, which considers nature and biodiversity related matters
  • Ensuring the appropriate allocation of clear responsibility among the Board in relation to nature and biodiversity matters
  • Considering the processes which are in place to ensure the Board and other committees, including the Audit Committee, are informed in relation to nature and biodiversity risks and reporting
  • Considering the processes and control environment in place across the organisation to ensure that the data captured relating to nature and biodiversity is complete and accurate
  • Consider the timeframe for adoption of TNFD principles and the requirements of the CSRD in relation to nature of biodiversity and challenge management as to ‘readiness’. 

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Our Sustainable Futures practice understands the challenges and opportunities that biodiversity presents to businesses.

If your business wants to get up to speed, talk to any member of the team to find out more about how we can help. We'd be delighted to hear from you.