Task Force on Nature-related Financial Disclosures publishes third draft of its disclosure framework

The Task Force on Nature-related Financial Disclosures (TNFD) has published the third draft of its disclosure framework for consultation. The aim of the TNFD framework, which was first published in March 2022, is to provide guidance for organisations to report and act on evolving nature-related risks, to support a shift in global financial flows away from nature-negative outcomes and towards nature-positive outcomes (see our previous blog post).

This latest version of the disclosure framework includes significant updates and enhancements, including:

• expansion of the draft disclosure recommendations to incorporate dependencies and impacts on nature alongside risks and opportunities to the organisation;
  
  
• proposed new disclosure recommendations related to supply chain traceability; the quality of stakeholder, including rights-holder, engagement; and the alignment of an organisation's climate and nature targets;
  
  
• an adaptive approach to the application of TNFD's disclosure recommendations to accommodate the varying materiality and reporting preferences and needs of report preparers; and to support early action by companies and financial institutions and encourage increasing disclosure ambition over time;
  
  
• additional guidance on risk and opportunity assessment and the metrics proposed to support that analysis;
  
  
• enhanced practical usability of its proposed risk and opportunity assessment approach (LEAP);
  
  
• draft guidance on target-setting developed with the Science Based Targets Network (SBTN) and draft disclosure guidance for financial institutions; and
  
  
• two new discussion papers—one on scenarios and one on societal dimensions of nature-related risk management and disclosure. The papers are intended to encourage market participants to contribute further to these areas of ongoing work by the TNFD.

 Next steps

The TNFD aims to publish a fourth and final draft version of the framework in March 2023, ahead of the final version which is expected to be published in September 2023.

The TNFD press release dated 4 November 2022 is available here.

The TNFD framework (v0.3 Beta Release) is available here.