| Key Takeaways |
| The TNFD framework, published in September 2023, provides 14 disclosure recommendations across four pillars (Governance, Strategy, Risk Management, Metrics and Targets) plus the LEAP approach (Locate, Evaluate, Assess, Prepare) for identifying and assessing nature-related dependencies, impacts, risks, and opportunities. |
| Voluntary market adoption has reached 733 organizations as of November 2025, representing over $9.4 trillion in market capitalization among listed companies and over $22.4 trillion in assets under management. The TNFD’2025 Status Report found that 89% of respondents have already reported or plan to report nature-related information. |
| The ISSB announced in November 2025 that it will develop nature-related disclosure standards drawing directly on the TNFD framework, including the LEAP approach. The ISSB is targeting an Exposure Draft by CBD COP17 in October 2026. |
| The World Economic Forum estimates that more than half of global GDP ($44 trillion) is moderately or highly dependent on nature. Ninety-eight percent of investors surveyed by TNFD are concerned about the impact of nature loss on financial markets. |
| Nature-related risk assessment integrates directly with existing ERM frameworks: the LEAP approach maps to ISO 31000 risk identification and assessment steps, TNFD’s four disclosure pillars mirror the TCFD/ISSB structure, and nature risks compound climate risks through shared drivers. |
| Early adopters gain a genuine strategic advantage. Companies that build TNFD-aligned assessment capabilities now will be prepared for mandatory ISSB nature standards and satisfy investor stewardship expectations from the NA100 initiative (240 investors managing $30 trillion). |
Nature-related risk has moved from the periphery of sustainability reporting to the center of financial risk management. The World Economic Forum’s New Nature Economy Report found that more than half of global GDP, approximately $44 trillion, is moderately or highly dependent on nature and its services.
Pollination, clean water, stable soils, flood regulation, and carbon sequestration are not environmental abstractions. They are inputs to agricultural yields, real estate values, insurance pricing, and supply chain resilience.
Yet most enterprise risk management frameworks still treat nature as an externality. The Taskforce on Nature-related Financial Disclosures (TNFD) exists to change that.
Published in September 2023 with 14 disclosure recommendations, the TNFD framework provides the most comprehensive, globally adopted methodology for identifying, assessing, and disclosing nature-related dependencies, impacts, risks, and opportunities.
As of November 2025, 733 organizations representing over $22 trillion in assets under management have adopted the TNFD recommendations.
The ISSB has announced it will build directly from TNFD to develop formal nature-related disclosure standards, with an Exposure Draft targeted for October 2026.
This guide provides a practical introduction to the TNFD framework for risk managers. Every section connects TNFD’s concepts to established risk assessment processes, maps the LEAP approach to ISO 31000 risk management steps, and provides actionable guidance for companies beginning their nature-related risk assessment journey.
Why Nature-Related Risk Matters for Financial Decision-Making
Nature loss creates financial risk through two channels that mirror climate risk transmission.
Physical risk arises from degradation of ecosystem services that businesses depend on: water scarcity disrupting manufacturing, pollinator decline reducing agricultural output, soil erosion undermining infrastructure, and biodiversity loss weakening natural pest control.
Transition risk arises from policy, market, and technology responses to nature loss: regulations restricting land use, shifting consumer preferences toward nature-positive products, and biodiversity net gain requirements in development approvals.
The TNFD’s 2025 Status Report documents growing regulatory and investor pressure. Ninety-eight percent of investors surveyed are concerned about the impact of nature loss on financial markets.
Seventy-one percent want the ISSB to launch a dedicated nature standard. Almost 70% of organizations surveyed already face or expect to face sustainability reporting requirements covering nature within three years.
The Kunming-Montreal Global Biodiversity Framework’s Target 15 explicitly calls for large companies and financial institutions to regularly monitor, assess, and transparently disclose their nature-related dependencies, impacts, and risks.
Nature Dependencies and Impacts: Key Concepts
| Concept | Definition | Financial Risk Example |
| Dependency | A reliance on nature for inputs, processes, or services that support business operations | A food manufacturer dependent on pollination services; pollinator decline reduces output and increases costs |
| Impact | A positive or negative effect of business activities on nature | A mining operation discharging tailings into a river; regulators impose remediation costs and restrict permits |
| Nature-related risk | A potential threat from nature loss, either physical or transition | Water stress in a key manufacturing region forces production curtailment; 10-15% revenue shortfall |
| Nature-related opportunity | A potential positive effect from protecting, restoring, or managing nature | Ecosystem restoration generates biodiversity credits and qualifies for green financing at reduced rates |
| Ecosystem services | Benefits provided by nature: provisioning, regulating, cultural, supporting services | Mangrove forests providing coastal flood protection valued at $80B+ annually in avoided storm damage |
The TNFD Framework: Structure and Components
The TNFD framework has three core components: 14 recommended disclosures organized across four pillars consistent with TCFD and ISSB structure, a set of general requirements for nature-related disclosures, and the LEAP approach for identifying and assessing nature-related issues.
The framework was developed by 40 Taskforce members representing over $20 trillion in AUM, tested by over 200 companies and financial institutions, and informed by stakeholders from nearly 60 countries.
The TNFD released final sector guidance for four priority sectors (agriculture, food and beverage, fishing, metals and mining) with additional sectors in consultation. This covers approximately 50% of SASB SICS sectors.
The TNFD’s four-pillar structure mirrors the COSO ERM and ERM frameworks that risk managers already use, making integration straightforward.
The 14 TNFD Disclosure Recommendations
| Pillar | Disclosure | Key Requirements | ERM Connection |
| Governance | Board oversight (A) | Board’s oversight of nature-related dependencies, impacts, risks, opportunities | Board risk committee charter |
| Governance | Management role (B) | Management’s role in assessing and managing nature-related issues | Risk function reporting lines |
| Governance | Human rights (C) | Engagement with Indigenous Peoples and local communities | Stakeholder engagement processes |
| Strategy | Risks and opportunities (A) | Nature-related issues identified over short, medium, and long term | Enterprise risk register |
| Strategy | Business impact (B) | Effect on business model, value chain, strategy, and financial planning | Strategic risk assessment |
| Strategy | Resilience (C) | Strategy resilience considering different scenarios including 2030 GBF targets | Scenario analysis framework |
| Strategy | Locations (D) | Priority locations where the organization interfaces with nature in sensitive areas | Geographic concentration risk |
| Risk Mgmt | Identification (A) | Processes for identifying and assessing nature-related dependencies, impacts, risks | Risk identification methodology |
| Risk Mgmt | Management (B) | Processes for managing nature-related risks | Risk treatment and mitigation |
| Risk Mgmt | Integration (C) | Integration into overall risk management | ERM framework alignment |
| Metrics | Assessment metrics (A) | Metrics for assessing material nature-related risks and opportunities | KRI framework |
| Metrics | Dependencies/impacts (B) | Metrics on nature dependencies and impacts | Impact measurement |
| Metrics | Risk mgmt metrics (C) | Metrics on how nature risks are managed | Control effectiveness tracking |
| Metrics | Targets (D) | Targets and performance against them | Target-setting; risk appetite |
The LEAP Approach: Nature-Related Risk Assessment Step by Step
The LEAP approach is TNFD’s signature methodology. The acronym stands for Locate, Evaluate, Assess, Prepare.
The process is non-linear, iterative, and scalable. The ISSB has confirmed it will draw on the LEAP approach as it develops formal nature-related disclosure standards.
L: Locate Your Interface with Nature
Map where your organization interfaces with nature across direct operations and value chain. Identify biomes, ecosystems, and specific locations. Prioritize based on ecosystem integrity, biodiversity importance, and water stress.
Use geospatial tools like IBAT (Integrated Biodiversity Assessment Tool), WRI Aqueduct for water risk, and Global Forest Watch for deforestation monitoring. This parallels the geographic exposure mapping used in physical climate risk scenario analysis.
E: Evaluate Dependencies and Impacts
Evaluate dependencies on nature (what you take from or rely on) and impacts on nature (what you do to it) at each priority location.
Dependencies include direct inputs (water, raw materials) and ecosystem services (pollination, water purification, flood regulation).
Impacts include pollution, land use change, resource extraction, and invasive species introduction. Build a dependency and impact register analogous to your risk register for financial and operational risks.
A: Assess Nature-Related Risks and Opportunities
Translate dependencies and impacts into risks and opportunities using financial materiality. A dependency becomes a risk when the ecosystem service is degrading. An impact becomes a risk when it triggers regulatory action or reputational damage.
Apply likelihood and magnitude scoring consistent with your existing risk assessment matrix.
Consider physical risks (acute events; chronic degradation) and transition risks (policy, market, technology). Use scenario analysis including at minimum a scenario consistent with 2030 GBF targets.
P: Prepare to Respond and Report
Develop response strategies for material risks and opportunities. Integrate findings into governance, strategy, risk management, and metrics. Prepare TNFD-aligned disclosures. This connects directly to risk treatment and risk mitigation strategies in your ERM framework.
| LEAP Phase | ISO 31000 Equivalent | Key Activities | Output |
| Locate | Context establishment (5.4.1) | Map interfaces with nature; identify priority locations using geospatial tools | Priority location list with ecosystem context |
| Evaluate | Risk identification (5.4.2) | Assess dependencies and impacts at priority locations | Dependency and impact register |
| Assess | Risk analysis and evaluation (5.4.3-5.4.4) | Score risks using likelihood x magnitude; apply scenario analysis; determine materiality | Nature-related risk register with materiality assessment |
| Prepare | Risk treatment and communication (5.5-5.7) | Develop response strategies; prepare TNFD disclosures; set targets | Disclosure package; targets and KPIs |
Regulatory Trajectory: From Voluntary to Mandatory
The ISSB’s November 2025 decision to develop nature-related standards drawing directly on TNFD is the clearest signal of the trajectory. All eleven ISSB board members supported the decision.
The Exposure Draft targets CBD COP17 in October 2026. This mirrors exactly how TCFD’s voluntary climate recommendations became embedded in mandatory ISSB IFRS S2 standards.
The EU’s CSRD already covers nature through ESRS E3 (Water), E4 (Biodiversity and Ecosystems), and E5 (Resource Use and Circular Economy). In July 2025, TNFD submitted recommendations to EFRAG as part of the ESRS omnibus consultation.
The UK and Switzerland have incorporated TNFD-aligned requirements into financial sector regulations. The EU Deforestation Regulation (EUDR) enforcement begins December 2026 for large operators.
ISO 17298, published October 2025, operationalizes the TNFD LEAP approach into a practical standard.
| Framework / Regulation | Nature-Related Requirements | Timeline |
| TNFD Recommendations | 14 voluntary disclosures; LEAP approach; sector guidance for 4+ sectors | Published Sep 2023; expanding through 2026 |
| ISSB Nature Standards | Incremental disclosure requirements drawing on TNFD framework and LEAP | Exposure Draft Oct 2026 (CBD COP17) |
| EU CSRD / ESRS | ESRS E3 (Water), E4 (Biodiversity), E5 (Circular Economy) | Active; simplified ESRS pending mid-2026 |
| Kunming-Montreal GBF Target 15 | Large companies and FIs to monitor, assess, disclose nature impacts | Adopted Dec 2022; implementation through 2030 |
| EU Deforestation Regulation | Due diligence on deforestation-free supply chains | Enforcement Dec 2026 (large operators) |
| ISO 17298 | Biodiversity for organizations; operationalizes TNFD LEAP | Published Oct 2025 |
| NA100 Investor Initiative | 240 investors ($30T AUM) engaging 100 high-impact companies | Ongoing; TNFD adoption doubled among targets |
Integrating Nature Risk into Enterprise Risk Management
Nature-related risk assessment should integrate with existing ERM processes. The LEAP approach maps directly to ISO 31000 and COSO ERM components.
The Three Lines Model provides governance: first-line operations own nature data collection and location mapping, second-line risk functions validate methodology and aggregate results, third-line internal audit provides independent assurance.
Nature risks compound climate risks: land use change drives both biodiversity loss and GHG emissions; water stress affects both climate resilience and ecosystem health.
| ERM Component | Nature Risk Integration | Practical Action |
| Risk taxonomy | Add nature categories: biodiversity loss, water stress, land degradation, pollution, invasive species | Expand risk taxonomy aligned with TNFD’s five drivers of nature change |
| Risk identification | LEAP Locate and Evaluate phases surface dependencies and impacts across value chain | Run LEAP workshops with operations, procurement, sustainability; use geospatial screening |
| Risk assessment | LEAP Assess phase scores risks using likelihood x magnitude with scenario analysis | Apply existing scoring methodology; add nature-specific criteria (ecosystem criticality, irreversibility) |
| Risk appetite | Nature-specific tolerance statements for biodiversity, water, deforestation | Define thresholds: zero deforestation; water intensity limits; no operations in Key Biodiversity Areas |
| KRI monitoring | Track nature metrics alongside climate and financial KRIs | Deploy: water intensity per $M revenue, land use change area, operations in high-biodiversity zones |
| Risk reporting | Integrate nature into board risk pack alongside climate and financial risks | Nature risk heatmap in quarterly risk committee report; align with TNFD four-pillar structure |
Implementation Roadmap
| Phase | Actions | Deliverables | Success Metrics |
| Days 1–30: Locate | Map direct operations and key supply chain locations against IBAT, WRI Aqueduct, Global Forest Watch. Identify priority sectors and locations. Assemble cross-functional LEAP team. Review TNFD sector guidance. | Priority location map with ecosystem context. Nature risk screening scorecard. LEAP team charter. | Top 20 locations mapped with biodiversity and water risk data. Screening completed for all direct operations. LEAP team established. |
| Days 31–60: Evaluate and Assess | Conduct dependency and impact assessment at priority locations. Score nature-related risks using existing methodology. Identify opportunities (restoration, green finance, biodiversity credits). Run scenario analysis against GBF 2030 targets. | Dependency and impact register. Nature risk register with scores. Opportunity assessment. Scenario analysis summary. | Dependencies identified for all priority locations. Risks scored for top 10 issues. At least 2 opportunities quantified. 2030 GBF scenario completed. |
| Days 61–90: Prepare | Draft TNFD-aligned disclosures across four pillars. Design nature KRIs with RAG thresholds. Prepare board-level nature risk briefing. Develop 12-month improvement roadmap. | Draft TNFD disclosure. Nature KRI framework. Board presentation pack. 12-month roadmap. | Four-pillar disclosure covers all material nature risks. KRIs integrated into dashboard. Board briefing delivered. Roadmap includes data improvement milestones. |
Pitfalls and How to Avoid Them
| Pitfall | Root Cause | Remedy |
| Treating nature risk as separate from climate risk | Organizational silos between climate and biodiversity teams | Nature and climate share drivers (land use, water, pollution). Run integrated assessments using LEAP alongside climate scenario analysis. |
| Skipping the Locate phase | Assumption that nature risk can be assessed at corporate level without geographic specificity | Nature risk is inherently location-specific. Invest in geospatial screening using IBAT, WRI Aqueduct, and Global Forest Watch. |
| Ecological metrics without financial translation | Sustainability team produces biodiversity data that risk committees cannot act on | Every finding must connect to financial risk: revenue at risk from water stress, remediation cost, compliance cost from deforestation regulations. |
| Waiting for mandatory ISSB standards | Perception that TNFD is optional and can be deferred | ISSB will draw directly on TNFD. Companies building LEAP capability now get a 2+ year head start over those waiting for mandatory requirements. |
| Ignoring the value chain | Focus on direct operations; miss supply chain nature dependencies | TNFD requires value chain assessment. Start with Tier 1 suppliers in high-impact sectors (agriculture, mining, forestry, food). |
| No stakeholder engagement with affected communities | Compliance-focused approach that overlooks TNFD Governance Disclosure C | TNFD requires description of engagement with Indigenous Peoples and local communities. Build into LEAP from the Locate phase. |
Looking Ahead: Trends for 2026–2028
The ISSB’s November 2025 decision to develop nature-related standards is the defining event. With an Exposure Draft targeted for COP17 in October 2026, the path from voluntary TNFD to mandatory ISSB is on a clear timeline.
TNFD will complete its current technical work by Q3 2026 and pause further guidance development to support the ISSB process, mirroring exactly how TCFD transitioned into ISSB IFRS S2 for climate.
ISO 17298 (Biodiversity for Organizations), published October 2025, operationalizes TNFD LEAP into a practical standard.
This creates a three-layer architecture: ISO 17298 for operational implementation, TNFD for disclosure guidance, and future ISSB standards for mandatory reporting. Companies aligning with TNFD now are pre-complying with this architecture.
The NA100 investor initiative now covers 240 investors managing $30 trillion, engaging 100 high-impact companies. TNFD adoption among target companies has more than doubled. Financial institutions managing over $22 trillion in AUM have adopted TNFD.
Data and tools are maturing: the TNFD Learning Lab and Trainer Portal launched in February 2025, a Global Nature Data Utility is under discussion, and geospatial tools for biodiversity screening are becoming more accessible.
Build nature into your ERM technology capability now alongside climate data to avoid duplication.
The practical bottom line: nature will sit alongside climate in board-level discussions and financial filings within three years.
Companies that build TNFD-aligned capabilities now gain a genuine early-mover advantage in risk identification, investor confidence, and regulatory readiness.
Connect nature risk to your risk quantification for board reporting framework before the regulatory wave arrives.
Ready to start your nature-related risk assessment? Visit riskpublishing.com/services for TNFD implementation templates, LEAP workshop guides, and expert consulting. Contact our team to discuss your nature risk roadmap.
References
1. TNFD: Final Recommendations and Additional Guidance — The TNFD homepage with all 14 recommendations, LEAP guidance, and sector materials
2. TNFD: ISSB Decision on Nature Standard Setting (November 2025) — 733 adopters and ISSB collaboration announcement
3. ISSB: Welcomes TNFD Support for Nature-Related Disclosures — ISSB confirmation of nature standard development
4. IFRS Foundation and TNFD: Formalized Collaboration (April 2025) — MOU between ISSB and TNFD
5. TNFD 2025 Status Report Analysis — Adoption rates, investor sentiment, and data challenges
6. UNDP: Supporting Nature-Related Financial Disclosures — Global TNFD capacity building project
7. Linklaters: TNFD Final Recommendations Published — Legal analysis of TNFD framework
8. Linklaters: Next Steps on ISSB Nature Standard — ISSB timeline and NA100 progress
9. Linklaters: Quick Guide to TNFD (September 2025) — Comprehensive TNFD legal reference
10. Fola Earth: ISSB Integrates Nature — Analysis of ISSB decision for early adopters
11. Fiegenbaum: Understanding TNFD — TNFD overview and regulatory landscape
12. Green Central Banking: ISSB Nature Standards Roundup — ISSB nature decision and market data
13. TNFD: Guidance on Nature in Transition Plans (November 2025) — Integrating nature into corporate transition planning
14. Longevity Partners: Navigating TNFD, LEAP, and Biodiversity Reporting — Implementation guide for real estate and infrastructure
15. EcoActive: Complete ESG Guide to the TNFD Framework — TNFD evolution, LEAP process, and adoption trends
Chris Ekai is a Risk Management expert with over 10 years of experience in the field. He has a Master’s(MSc) degree in Risk Management from University of Portsmouth and is a CPA and Finance professional. He currently works as a Content Manager at Risk Publishing, writing about Enterprise Risk Management, Business Continuity Management and Project Management.