Draft recommended disclosures: General requirements
This TNFD disclosure guidance is for all sectors. Financial institutions should also refer to the additional disclosure guidance for financial institutions. All organisations should refer to additional guidance for relevant sectors and biomes.
Adoption of the TNFD recommendations includes satisfaction of six general requirements for disclosure statements. These cut across the four pillars of the disclosure recommendations: Governance, Strategy, Risk & Impact Management and Metrics & Targets.
The six general requirements relate to:
- The approach to materiality;
- The scope of disclosures made;
- Links between nature-related dependencies, impacts, risks and opportunities (referred to collectively in the TNFD framework as nature-related issues);
- The location specificity of nature-related issues;
- Integration with other sustainability-related disclosures; and
- Stakeholder engagement.
1. Approach to materiality
An organisation should provide a description of the materiality processes used, with reference to external standards where appropriate.
These materiality processes apply only to Strategy A, B and C, and the Metrics & Targets disclosures: the recommended disclosures for Governance and Risk Management are process descriptions only and are therefore not linked to materiality considerations. The TNFD nevertheless strongly encourages report preparers to report all indicators relevant to the organisation, including the core disclosure metrics outlined in this guidance, to demonstrate alignment with global policy goals.
An organisation should distinguish in its disclosures which pieces of material information are primarily relevant to specific stakeholder groups, such as investors and civil society.
The organisation should also consider describing:
- How it has defined the threshold to determine which topics are material for reporting; whether it has tested its selection of material topics with investors and other stakeholders; the sources, evidence and methods used to justify the nature-related material information to be disclosed; as well as any assumptions and subjective judgements made;
- The stakeholders and experts who have informed the materiality determination process;
- Any limitations or exclusions. These could include the time periods considered to assess the effects of decisions and actions or the exclusion of some categories of business relationships from certain parts of the value chain when identifying material topics; and
- How it has prioritised the effects of its decisions and actions for reporting.
2. Scope of disclosures
The organisation should describe the scope of current nature-related disclosures including:
- Coverage of activities and assets in the organisation’s direct operations, its value chain(s) upstream and downstream, and where appropriate, financed activities;
- The elements of the TNFD framework disclosed against; and
- Whether any extensions to this scope are planned for future reports and what these extensions are.
The TNFD disclosures should then be broken down, where relevant, by:
- Direct operations;
- Downstream; and
- Financed (specifically for financial institutions).
3. Consideration of nature-related dependencies, impacts, risks and opportunities
Identification of nature-related risks and opportunities should be based on an assessment of dependencies and impacts on nature with clear delineation between these four types of nature-related issue.
Consideration of the specific location of an organisation’s interface with nature should be integral to the assessment, recognising that dependencies and impacts on nature and related impacts on affected stakeholder, occur in specific ecosystems, with linkages across ecosystems. For example, water pollution occurring in one location can travel to affect other connected ecosystems.
5. Integration with other sustainability-related disclosures
Nature-related disclosures should be integrated with other business and sustainability-related disclosures whenever possible to provide report users with an integrated and holistic picture of an organisation’s financial and non-financial circumstances. Importantly, this includes integration of climate and nature disclosures.
An organisation should ensure that any alignment, contributions and possible trade-offs between actions and targets for climate and nature are clearly identified. In particular, an organisation is expected to disclose any material information on existing climate disclosures where they also relate to nature-related dependencies, impacts, risks and opportunities, and describe whether and how they have integrated disclosures across climate and nature considerations.
6. Stakeholder engagement
The issues discussed and concerns raised during engagement with affected stakeholders should be taken into consideration when preparing the content of the TNFD recommended disclosures.Additional Content