Investors and other stakeholders need to understand how an organisation measures and monitors its nature-related risks and opportunities. Access to the metrics and targets used by an organisation allows investors and other stakeholders to better assess the organisation’s potential risk-adjusted returns, ability to meet financial obligations, general exposure to nature-related risks and opportunities, and progress in managing or adapting to those risks and opportunities.

Metrics and Targets

Disclose the metrics and targets used to assess and manage relevant nature-related dependencies, impacts, risks and opportunities where such information is material

Recommended Disclosure a)

Organisations should provide the key metrics used to measure and manage nature-related risks and opportunities.

Where nature-related risks and opportunities are material, organisations should consider describing whether and how related performance metrics are incorporated into remuneration policies.

Where relevant, organisations should provide any analysis of shadow prices for ecosystem services, as well as nature-related opportunity metrics, such as revenue from products and services designed for a nature-positive economy.

Over time, metrics should be provided for historical periods to allow for trend analysis. Where appropriate, organisations should consider providing forward-looking nature-related metrics, consistent with their business or strategic planning time horizons. In addition, where not apparent, organisations should provide a description of the methodologies and assumptions used to calculate or estimate nature-related metrics.

Note – Further guidance on metrics will be developed by the Taskforce for inclusion in future beta releases of the TNFD framework.

Disclose the metrics used by the organisation to assess material nature-related risks and opportunities in line with its strategy and risk management process.

Recommended Disclosure b)

Guidance for All Sectors

Note – Adaptation of this TCFD recommended disclosure is under ongoing consideration by the TNFD Taskforce members for inclusion in future beta releases of the TNFD framework.

Disclose the metrics used by the organisation to assess and manage direct, upstream and, if appropriate, downstream dependencies and impacts on nature.

Recommended Disclosure c)

Guidance for All Sectors

Organisations should describe their key nature-related targets, including location-specific targets for priority locations, where relevant, and in line with anticipated regulatory requirements or market constraints or other goals.[1]

In describing their targets, organisations should consider including the following:

  • whether the target is absolute or relative;
  • time frames over which the target applies;
  • base year from which progress is measured; and
  • key performance indicators used to assess progress against targets.

Organisations disclosing medium-term or long-term targets should also disclose associated interim targets in aggregate or by business line, where available.

Where not apparent, organisations should provide a description of the methodologies used to calculate targets and measures.

Note – Further guidance on targets will be developed by the Taskforce for inclusion in future beta releases of the TNFD framework.

Describe the targets used by the organisation to manage nature-related dependencies, impacts, risks and opportunities and performance against targets

Disclosure Metrics

For v0.4 of the beta framework, the TNFD will develop two ‘Annexes’ on Disclosure Metrics for implementation of two disclosure recommendations:

  • Metrics and Targets A: Annex 1 – relating to Disclosure Metrics for nature-related risks and opportunities; and
  • Metrics Targets B: Annex 2 – relating to Disclosure Metrics for impacts and dependencies on nature.

The Taskforce proposes to centre Annex 2 on Disclosure Metrics for impact drivers, rganized by:

  • The TNFD five drivers of nature change, adapted from IPBES, to reflect drivers of both positive and negative impacts on nature: land/ocean/freshwater use change; climate change; resource use / replenishment; pollution / pollution removal; invasive alien species introduction / removal; and
  • the TNFD four realms (ocean, freshwater, land and atmosphere).

Recommended Disclosure d)

Describe how targets on nature and climate are aligned and contribute to each other, and any trade-offs

Additional disclosure guidance for financial institutions

In v0.3, the TNFD has developed additional guidance for financial institutions to apply the TNFD draft disclosure recommendations. The guidance is applicable to all financial services industries prioritised by the TNFD (as defined in the v0.2 beta release):

  • Banks;
  • Insurance companies;
  • Asset managers and asset owners; and,
  • Development finance institutions (including public development banks).

The draft guidance is provided in full in Annex 3.3.

Additional Content
Additional Content

The TNFD has also developed a set of illustrative Assessment and Disclosure Metrics for financial institutions, provided in Annex 3.4. The draft financial institution metrics are comprised of four types:

  1. Dependency metrics
  2. Impact metrics
  3. Risk metrics
  4. Opportunity metrics

For each type, categories and subcategories are provided including illustrative metrics. Examples are provided for each subcategory, along with potential ways in which the metrics can be broken down (e.g. by sector, by ecosystem service, by country, by biome).

It is not expected that financial institutions will choose to use all subcategories of metrics nor use any given metric for their entire portfolio of exposures. The use of specific metrics should be guided by what is considered meaningful and material. It is recognised that for both qualitative and quantitative information, financial institutions have a reliance on disclosures from non- financial corporates and there may be limitations to what financial institutions can assess and disclose.

References to examples of publicly available disclosures are provided throughout the set of illustrative metrics for financial institutions to help illustrate what financial institutions may disclose. Additionally, overviews and links are provided to a range of further sources of methodology descriptions, tool providers and case studies.

This additional disclosure guidance for financial institutions will continue to evolve as the TNFD draft disclosure recommendations and approach to disclosure metrics evolves towards publication of the complete framework in September 2023.

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