Taskforce on Nature-related Financial Disclosures reports more and integrated disclosures by corporates and investors, but insists regulation is “essential”.
Increased reporting of nature-related financial risks is improving board-level awareness and action on material exposures, according to Norges Bank Investment Management (NBIM), the world’s largest sovereign wealth fund.
“Nature-related disclosures aren’t just providing investors with more information, but are also bringing this topic out of the back office and into boardrooms,” said Ashley Gorst, Senior Investment Stewardship Manager at NBIM, speaking at a briefing on the Taskforce on Nature-related Financial Disclosures’ (TNFD) 2025 status report.
“We see it as normal for a CEO or a chair to be quite knowledgeable about nature-related risks now,” he added.
According to the TNFD report, 620 organisations representing US$20 trillion have committed to reporting in alignment with its recommendations, with more than 500 having already published reports aligned with its guidance.
Gorst also cited recent research conducted by NBIM and the University of Zurich which found that nearly half of all companies (48%) view nature risks as financially material. According to the study, 43% of those firms perceive nature-related physical risks – and 27% transition risks – as “having financial effects already”.
“We’re seeing more evidence that companies see nature risk as financial risk,” he added. “This, for us, is a financial exposure that is requiring proper risk management.”
Investors will increasingly expect portfolio firms to report on nature-related financial risks in line with emerging consensus on disclosures, Gorst said.
“Looking ahead, it is clear that most asset managers and owners are requiring more integration of nature at the at the global standards level,” he said. “This supports our view that collaboration between [standards bodies] is critical for companies who are already working within these frameworks.”
The TNFD published its recommendations for nature-related disclosures in 2023. In April, the IFRS Foundation and the TNFD committed to build upon the latter’s framework in the standards development work of the International Sustainability Standards Board (ISSB).
Three quarters of respondents (75%) to a survey conducted by the TNFD reported on at least five of its recommended disclosures, while 58% reported on at least 10. Four in five (78%) respondents said they had integrated their nature-related disclosures with climate-related reporting.
Gorst welcomed the evidence that firms were already taking an integrated approach to reporting and addressing climate and nature risks.
“These risks are interconnected in many sectors, and you can’t manage one without the other. Since these are fundamental to long-term resilience of our portfolio, we’ve already integrated our own climate and nature disclosures, and are delighted that others are following down this path,” he said.
“This report makes it clear that many companies are [reporting] in a way that is increasingly making it easier for us to understand where the risks are in our portfolio and where there may be opportunities for companies to do better out of the increasingly well-defined nature transition.”
Mindset shift
CEO Tony Goldner said the TNFD had helped to “shift the mindset” of companies and investors, who increasingly recognised the importance of nature to “resilience and value”, having previously viewed it a corporate social responsibility or compliance issue.
“It’s about the resilience of nature underpinning the resilience of business; the resilience of cash flows depends on the resilience of nature’s flows of ecosystem services into business models,” he said.
“And it’s about the value that can be lost when nature risk materializes, and the value that can be created by working with nature to unlock new nature-based solutions and the ability of businesses to contribute to nature positive outcomes.”
According to the new status report, most firms have built out their nature-related disclosures from regulated reporting requirements, such as for water and waste. It also found that organisations were making greater progress on governance-related disclosures than their performance against metrics.
To support reporting of nature-related disclosures, the TNFD has provided support to nature data and technology platform providers, published a blueprint for a global Nature Data Public Facility and issued sector-specific guidance. At COP30, it plans to release a set of recommendations for systemically upgrading the nature data value chain
Speaking on Sustainable Investor’s new podcast – Risk, Return and Responsibility – Gemma James, Head of Biodiversity and Nature at specialist consultancy Chronos Sustainability, said TNFD has been “a game changer” for corporate understanding of nature-related risks.
“Nature issues themselves are not new to investors or companies, but reporting and assessing them in a consistent and consolidated way is new,” she said.
“Looking through that lens of nature overall, it’s not about looking at independent issues in silo anymore: there’s a value-add to how companies understand the environment they’re operating in and how those different issues intersect.”
Regulatory concerns
The TNFD Status Report identified regulation as the main driver behind the growing focus on nature-related assessment and reporting, alongside investor concern.
Almost 70% of respondents to the TNFD survey said they had existing regulatory requirements or expect them in the next three years. Europe’s Corporate Sustainability Reporting Directive (CSRD) was the first major legislation to require nature-related disclosures, through a series of dedicated European Sustainability Reporting Standards (ESRS).
Other jurisdictions to have mandated nature-related disclosures include India, via its Business Responsibility and Sustainability Reporting framework, and China, through the reporting requirements of major securities exchanges.
Goldner acknowledged “concerns” over current European plans to streamline CSRD, saying TNFD had responded by proposing solutions, including collapsing four existing nature standards into one.
“We are providing technical and analytical feedback, but also trying to contribute to the search for a robust approach that responds to the clear market demands for simplification in Europe,” he said.
“Mandatory reporting is going to be essential to see the changes in the world and the changes for nature that we’re all looking for.”
