Investors and other stakeholders need to understand how nature-related risks and opportunities may affect an organisation’s businesses, strategy and financial planning over the short, medium and long term. Such information is used to inform expectations about the future performance of an organisation.

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.

Recommended Disclosure a)

Guidance for All Sectors

Organisations should provide the following information:

  • a description of what they consider to be the relevant short-, medium- and long-term time horizons, taking into consideration the useful life of the organisation’s assets or infrastructure and the fact that nature-related risks and opportunities often manifest themselves over the medium and longer terms;[1]
  • a description of the specific nature-related risks and opportunities potentially arising in each time horizon (short-, medium- and long-term) that could have a material financial impact on the organisation; and
  • a description of the process(es) used to determine which risks and opportunities, based on nature-related dependencies and nature impacts, could have a material financial impact on the organisation.
  • Organisations should provide a description of their risks and opportunities, as appropriate. In describing nature-related risks and opportunities, organisations should refer to Annex 4.
Additional Content

Describe the nature-related risks and opportunities the organisation has identified over the short, medium and long term.

Recommended Disclosure b)

Guidance for All Sectors

Building on recommended disclosure (a), organisations should discuss how identified nature-related risks and opportunities have affected their businesses, strategy and financial planning. Organisations should consider the impact on their businesses, strategy and financial planning in the following areas:

  • Products and services
  • Supply chain and/or value chain
  • Nature-related adaptation activities
  • Investment in research and development
  • Operations (including types of operations and location of facilities)
  • Acquisitions or divestments
  • Access to capital

Organisations should describe how nature-related risks and opportunities serve as an input to their financial planning process, the time period(s) used and how these risks and opportunities are prioritised. Organisations’ disclosures should reflect a holistic picture of the interdependencies that affect their ability to create value over time. Organisations should describe the impact of nature-related risks and opportunities on their financial performance (e.g. revenues and costs) and financial position (e.g. assets and liabilities). If scenarios were used to inform the organisation’s strategy and financial planning, such scenarios should be described.

Organisations that have made nature-related commitments, operate in jurisdictions that have made such commitments, or have agreed to meet investor expectations regarding nature, should describe their plans, which could include nature-related targets and specific activities intended.[2]

Describe the impact of nature-related risks and opportunities on the organisation’s businesses, strategy and financial planning.

Recommended Disclosure c)

Guidance for All Sectors

Organisations should describe how resilient their strategies are to nature-related risks and, where relevant to the organisation, future scenarios consistent with increased nature-related physical and transition risks.

Organisations should consider discussing:

  • where they believe their strategies may be affected by nature-related risk and opportunities;
  • how their strategies might change to address such potential risk and opportunities, including a description of how the location specificity of risks and opportunities may be considered;
  • the potential impact of nature-related risks and opportunities on financial performance (e.g. revenues and costs) and financial position (e.g. assets and liabilities);[3] and
  • the scenarios and associated time horizon(s) considered.

Note – Further guidance on scenarios analysis will be developed by the Taskforce for future releases of beta versions of the TNFD framework. Guidance will include the relationship of scenarios with different time horizons.

Describe the resilience of the organisation’s strategy, taking into consideration different scenarios.

Recommended Disclosure d)

Guidance for All Sectors

Organisations should provide a list and/or spatial map of the ecosystems deemed to be low integrity and/or high importance and water-stressed areas with which the organisation’s assets and operations interact. This should include reference to the location of the ecosystem and the type of ecosystem (i.e. the biome).

A number of reference sources and indicators for defining low integrity ecosystems, high importance ecosystems and water-stressed areas are available and signposted in the LEAP approach on the TNFD interactive online platform. Others reference sources and indicators are in development.

The definitions and reference sources for this disclosure recommendation in subsequent beta versions will be established through further consultation with knowledge partners and market participants.

Describe the organisation’s interactions with low integrity ecosystems, high importance ecosystems or areas of water stress.

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