The TNFD will continue to develop further guidance on how to implement LEAP and the TNFD disclosure recommendations across priority sectors and biomes, for publication at regular intervals prior to the launch of v1.0 of the complete TNFD framework in September 2023.
To assist organisations operating across different sectors, realms and biomes to implement the TNFD’s LEAP approach and disclosure recommendations in practice, the TNFD is continuing to build upon the approach to additional guidance from v0.2 of the beta framework, using the following structure:
- Sector guidance: Guidance tailored to the economic sector in which organisations conduct business; and
- Realm and biome guidance: Additional guidance linked to the nature realms defined by the TNFD (ocean, freshwater, land, and atmosphere) and with details on the biomes most relevant to, and impacted by, business activity outlined in the TNFD’s fundamental concepts for understanding nature.
Throughout additional guidance for sectors and realms/biomes, the TNFD will draw out nature-related issues – covering dependencies, impacts, risks, and opportunities – that are relevant for that sector and biome, across the phases of the LEAP approach.
In addition to the Draft Additional Guidance for Financial Institutions released in this v0.3 release (see Annex 3.3), further additional guidance is currently under development on the following topic areas with knowledge partners and input from relevant industry experts, other scientific experts and Forum members:
- Agriculture and food;
- Fishing and aquaculture;
- Forestry, paper and pulp;
- Mining and metals;
- Energy (oil and gas, and renewable energy); and
- The tropical forest biome.
This will be released by the Taskforce for comment as part of the v0.4 release and potentially earlier in tranches to give market participants time to review and provide feedback to the Taskforce.
Towards sector guidance: TNFD sector classification & sector prioritisation
The TNFD draft disclosure recommendations are sector agnostic and apply both to financial institutions and corporates.
Since the launch of the Taskforce, the TNFD has received significant interest from market participants in the development of additional guidance, including by sector. The TNFD therefore aims to enhance the specificity of its recommendations moving forward and develop additional guidance that is relevant, customised and aligned to the needs of different market participants.
TNFD’s Proposed Approach to Sector Classification
The TNFD’s non-financial sector classification is based on the Sustainable Industry Classification System® (SICS®), developed by SASB to group companies based on shared sustainability risks and opportunities. This has been adopted by the ISSB for the global baseline they are developing for sustainability disclosure. The TNFD has adopted SICS® to align as closely as possible to this emerging global baseline under development by the ISSB.
The TNFD will organise financial sector guidance into the four major financial services industries identified and defined by the TCFD: banks, insurance companies, asset managers and asset owners. Development Finance Institutions have been added, given their important role in nature-related financing in emerging markets, including in many nature hotspots.
The specific guidance developed by the TNFD will be designed to be interoperable with different sector and industry classification schemes and a mapping to different classification schemes will be provided in future releases.
TNFD’s proposed priority sectors
Non-financial TNFD priority sectors
While the TNFD recognises that every non-financial sector has an impact on nature and is affected by nature-related risks and opportunities, the TNFD has developed an initial list of its priority sectors, identifying the sectors and industries that are more likely to be financially impacted than others due to their exposure to dependencies and impacts on nature. It also considers the sector’s potential opportunities – activities that create positive outcomes for organisations and nature by avoiding or reducing negative impact on nature or contributing to its restoration. This first list of priorities has been identified to ensure a manageable scope of work for the Taskforce in developing its first set of specific guidance. Further sectors, sub-sectors and industries may be added in subsequent releases.
To inform its prioritisation of sectors for developing sector specific guidance, the TNFD has conducted a review and consolidation of existing sector-specific research and assessments focused on nature-related dependencies, impacts, risks, and opportunities. Based on this review and evaluation, and aligned with the SICS classification scheme, eight thematic sectors, 13 sub-sectors and 19 industries have been prioritised for the TNFD’s initial development of sector-specific guidance/recommendations moving forward:Additional Content
Financial industries prioritised by TNFD
The TNFD will organise financial sector guidance into the four major financial services industries identified and defined by the TCFD, with the addition of Development Finance Institutions, given their important role in nature-related financing in emerging markets, including in many nature hotspots.Additional Content
The TNFD’s sector equivalency tool will allow these industries to be mapped to equivalent national/regional classification systems (e.g. NACE, Taxonomies) or other commonly used classification systems (e.g., GICS as used in ENCORE, ICS).