Draft recommended disclosures

: Strategy

Guidance for all sectors

Dependencies and impacts

An organisation should describe the actual or likely nature-related dependencies and impacts the organisation has identified in its direct operations, upstream and downstream, and financed activities, where relevant.

An organisation should provide the following information:

• A description of its actual or likely impacts on nature, with reference to the locations identified in Strategy D and any other relevant locations. This description should align with the core indicators and metrics outlined in the Annex for Metrics and Targets B (Annex 1), as well as any other impacts identified as material. It should distinguish between impacts in the organisation’s direct operations, upstream and downstream, and financed activities; and
• A description of its actual or likely dependencies on nature with reference to the locations identified in Strategy D, and any other relevant locations. This description should distinguish between dependencies in the organisation’s direct operations, upstream and downstream, and financed activities.

In describing nature-related dependencies and impacts, an organisation should refer to the global core and additional disclosure indicators in Annex 1 and the sector and biome-specific metrics (see examples for agriculture and food sector in Annex 4 and tropical forest biome in Annex 5).

Risks and opportunities

An organisation should describe how these dependencies and impacts on nature give rise to risks and opportunities for its business, drawing on the TNFD categories of nature-related risks and opportunities where relevant.

An organisation should provide the following information:

• A description of what they consider to be the relevant short-, medium- and long-term time horizons, considering 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; and
• A description of the specific nature-related risks and opportunities potentially arising from dependencies and impacts on nature across each time horizon (short-, medium- and long-term) identified as material.

An organisation should highlight connections between impacts and dependencies, and risks and opportunities where possible.

In describing nature-related risks and opportunities, an organisation should refer to the global core and additional disclosure indicators and metrics in Annex 2.

Guidance for all sectors

An organisation should describe how nature-related risks and opportunities identified in Strategy A have affected its businesses, strategy and financial planning.

Organisations should describe how nature-related risks and opportunities serve as an input to their financial planning processes, the time period(s) used and how these risks and opportunities are prioritised.

An organisation’s disclosures should reflect a holistic picture of the interdependencies between risks and opportunities that affect its ability to create value over time.

An organisation should describe the actual and potential effect of nature-related risks and opportunities on its financial performance, such as revenues and costs, and its financial position, such as assets and liabilities. The disclosure should refer to the global core and additional metrics in Annex 2.

If scenarios were used to inform the organisation’s strategy and financial planning, these 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, transition plans and specific activities intended.

In describing nature-related risks and opportunities, an organisation should refer to the global core and additional disclosure indicators and metrics in Annex 2.

Guidance for all sectors

An organisation should describe how resilient its strategies are to nature-related risks and opportunities, and their potential effects across a diverse set of plausible future scenarios, with an increased level and/or increased rate of change of nature-related physical and transition risks, where relevant to the organisation.

The organisation should consider discussing:

• Where it believes its strategies may be affected by different assumptions and uncertainties regarding nature-related risks and opportunities;
• How its strategies might change to address such potential effects, including a description of how the location specificity of nature-related dependencies, impacts, risks and opportunities may be considered;
• The potential effects of nature-related risks and opportunities on financial performance (e.g. revenues and costs) and financial position (e.g. assets and liabilities) over the short, medium and longer term;
• The resources and capacity the organisation has or can put in place to adapt and make these changes to its strategy to address future changes in the potential effects of nature-related risks and opportunities; and
• The scenarios and associated time horizon(s) considered in assessing the strategy’s resilience.

Guidance for all sectors

An organisation should include:

• A list and/or spatial map of locations where the organisation has assets and/or activities in its direct operations, and upstream and/or downstream and/or financed, where relevant that are in:
  • High integrity ecosystems; and/or
  • Areas of rapid decline in integrity; and/or
  • High biodiversity importance; and/or
  • Areas of water stress; and/or
  • Areas where the organisation is likely to have significant potential impacts and/or dependencies;
• Reference to the locations and types of the ecosystems (i.e. biomes);
• A description of how the organisation defines and identifies high integrity ecosystems, rapid decline in ecosystem integrity, high biodiversity importance and water stress, with reference to tools, data sources and indicators and metrics used; and
• A description of how the organisation identifies where it is likely to have significant potential impacts and/or dependencies for the purposes of this disclosure where not covered elsewhere.

An organisation should consider reporting the following indicators to support this disclosure:

• Proportion of suppliers screened on nature-related issues by spend and/or volume;
• Proportion of suppliers engaged for priority nature issues identified and/or when assessing nature-related issues, by spend and/or volume;
• Timescale for assessing nature-related risks in the value chain;
• Proportion of inputs, by spend and/or volume, traced to original location; and
• Proportion of operational locations assessed upstream and downstream.

An organisation may wish to refer to the databases, definitions, metrics and sources outlined in the TNFD guidance for identifying priority locations in the Locate phase of the LEAP approach.