Over half of the world’s GDP heavily relies on nature and its services. It has become imperative for businesses to understand their interconnection with nature and take action against biodiversity loss. According to a 2022 CDP survey, although nearly half of responding companies are considering biodiversity in their strategies, most fail to turn commitment into actions.
The Task Force on Nature-related Financial Disclosures (TNFD) and the Science Based Targets Network (SBTN) are two global frameworks providing essential guidance to help businesses integrate nature and biodiversity into their decision-making. This blog explores their approaches and how companies can adopt them to embark on their biodiversity journey.
Download our whitepaper for a comprehensive review of key concepts, global regulatory and voluntary reporting frameworks, and a step-by-step guide aggregating TNFD and SBTN approaches.
Founded in 2021, the Task Force on Nature-related Financial Disclosures is a market-led, science-based and government-backed initiative that encourages and enables organizations to act on evolving nature-related issues. Inspired by the Task Force on Climate-related Financial Disclosures (TCFD), TNFD provides disclosure recommendations and guidance to help companies and financial institutions assess, report and act on their nature-related dependencies, impacts, risks and opportunities.
As of January 2024, 320 organizations from over 46 countries have committed to adopt TNFD recommendations and publish TNFD-aligned disclosures. TNFD has been integrated into ISSB, ESRS, GRI, and CDP reporting.
Fully aligned with the Global Biodiversity Framework Target 15, TNFD offers 14 nature-related recommendations centered on four pillars—governance, strategy, risk and impact management, and metrics and targets, as listed below. TNFD mirrors the TCFD’s structure and adds three new recommendations and metrics for priority sectors and biomes.
To help organizations identify and assess nature-related issues and prepare for the disclosures, TNFD offers a structured four-step LEAP approach, including locating the business interfaces with nature, evaluating nature-related dependencies and impacts, assessing risks and opportunities, and preparing to respond and report on these findings.
The process starts with an initial scoping stage to create hypotheses about material nature-related DIROs (dependencies, impacts, risks, and opportunities), define assessment parameters, and align the internal team with the goals and timelines.
TNFD suggests a set of core global metrics, core sector-specific metrics, and additional metrics for disclosures.
14 Core global metrics apply to all organizations, including 9 impact and dependency indicators and 5 risk and opportunity metrics. These metrics capture the foundational aspects of nature-related impacts, dependencies, risks and opportunities applicable across all sectors.
| Driver of nature change / State of nature | Indicator |
|---|---|
| Land/freshwater/ ocean-use change | 1. Total spatial footprint |
| 2. Extent of land/freshwater/ocean-use change | |
| Pollution/ pollution removal | 3. Pollutants released to soil by type |
| 4. Wastewater discharged | |
| 5. Waste generation and disposal | |
| 6. Plastic pollution | |
| 7. Non-GHG air pollutants | |
| Resource use/ replenishment | 8. Water withdrawal and consumption from areas of water scarcity |
| 9. Quantity of high-risk natural commodities from land/ocean/freshwater | |
| Climate change | GHG emissions (refer to TCFD and IFRS S2) |
| Invasive alien species and other | Draft indicator (to be further defined): Measures against unintentional introduction of invasive alien species (IAS) |
| State of nature | Draft indicator: Ecosystem condition |
| Draft indicator: Species extinction risk |
| Risk/Opportunity | Metric |
|---|---|
| Risk (Transition) | 1. Value of assets, liabilities, revenue and expenses that are assessed as vulnerable to nature-related transition risks |
| Risk (Physical) | 2. Value of assets, liabilities, revenue and expenses that are assessed as vulnerable to nature-related physical risks |
| Risk (Transition -Liability) | 3. Description and value of significant fines/penalties received/ litigation action in the year due to negative nature-related impacts. |
| Opportunity (Business performance) | 4. Amount of capital expenditure, financing or investment deployed towards nature-related opportunities, by type of opportunity, with reference to a government or regulator green investment taxonomy or third-party industry or NGO taxonomy, where relevant. |
| Opportunity (Business performance – Products and services) | 5. Increase and proportion of revenue from products and services producing demonstrable positive impacts on nature with a description of impacts. |
TNFD disclosure metrics also include:
The Science Based Targets Network was founded in 2019 as part of the Global Commons Alliance, aimed to transform economic systems and protect the Earth system. SBTN provides a framework and guidance for companies and cities to set science-based targets (SBTs) to avoid and reduce pressures on nature, restore and regenerate natural habitats, and address the drivers of nature loss.
Approximately 160 companies across over 30 countries are preparing to set science-based targets for nature through SBTN’s Corporate Engagement Program and partner network. By setting SBTs with SBTN, companies can align reporting with disclosure frameworks, such as GRI, CDP, and TNFD, and demonstrate their proactive management of nature-related issues to investors.
SBTN builds on the success of the Science Based Targets initiative (SBTi) and extends its climate focus to encompass impacts on Earth’s natural systems, targeting five key areas to halt and reverse nature loss by 2030:
SBTN develops a 5-step approach to guide companies and cities to set targets for a net-zero, nature-positive future. The process involves assessing material pressures, prioritizing locations and business components, measuring and setting targets, taking action, and reporting progress.
SBTN focuses on impacts on earth systems from direct operations and upstream activities with potential expansion into downstream impacts. Peer-reviewed guidance is available on target-setting for Freshwater and Land (details below).
Although SBTN has not developed guidance for biodiversity-specific targets, it offers a method for companies to prioritize areas of biodiversity importance when setting freshwater and land targets. By identifying locations where business activities disproportionately affect biodiversity, companies can set effective targets and optimize efforts to mitigate adverse impacts and promote positive outcomes.
Ocean targets are under development and expected to release in 2024.
SBTN Freshwater Targets
| Measure | Target statement example | |
|---|---|---|
| Water quantity | Freshwater withdrawals from surface water bodies and groundwater | [Annual] Company X will reduce its water withdrawal in the __ basin to __ ML/year by the year __.” OR [Monthly] “Company X will reduce its water withdrawal in the __ basin to __ ML/ month for each of the following months. The reductions will occur by the year __.” |
| Water quality | The total amount of nitrogen and phosphorus entering a surface water body during a given time. | [Annual] “Company X will reduce its nutrient load in the __ basin to __ kg P (or N)/year by the year __.” OR [Seasonal] “Company X will reduce its nutrient load in the __ basin to __ kg P (or N)/month for each of the following months. The reductions will occur by the year __.” OR [Grey-water] “Company X will reduce its gray-water footprint in the __ basin to __ ML/year by the year __.” |
SBTN Land Targets
| Definition | Target statement example | |
|---|---|---|
| No Conversion of Natural Ecosystems | Avoid the wholesale change of a natural ecosystem to another land use, or a profound change in a natural ecosystem’s species composition, structure, or function, including deforestation*. | [Direct operations] Company X will have zero conversion of natural ecosystems by [target year], compared with a 2020** baseline. AND Company X will remediate all past conversion occurring between 2020** and [target year]. [Upstream] Company X will source 100% of volumes of commodities (Annex 1a Global or regional conversion-driving commodities) from areas known to be conversion-free from 2020**. AND Company X will remediate all past conversion occurring between 2020** and [target year] (associated with its share of volumes sourced). |
| Land Footprint Reduction | Reduce the amount of agricultural land needed to produce the products in the value chain over time. | [Absolute target] Company X commits to reduce absolute agricultural land footprint, from direct operations [and upstream impacts], [percent reduction]% by [target year] from a [base year] base year. OR [Intensity target] Company X commits to reduce agricultural land footprint intensity, from direct operations [and upstream impacts] [reduction]% per [unit] by [target year] from a [base year] base year. This corresponds to a % change in absolute land footprint by [target year] from the [base year] base year.” |
| Landscape Engagement | Enable regenerative, restorative, and transformational actions in materially relevant landscapes. | Company X is engaged in [initiative name] and committed to a substantial improvement in ecological and social conditions by 2030. |
While both TNFD and SBTN move businesses towards the same nature-positive outcomes, they are different in two aspects:
Approach:
Purpose:
Companies can benefit from using both frameworks, given the complementary approaches. The SBTN framework refers directly to TNFD’s guidance and disclosures, while the SBTN can help companies turn TNFD assessments into action plans. As knowledge partners and technical collaborators, the two frameworks are aligned in several steps of their approach (see graph below), enabling companies to repurpose their data points.
Here are three steps that aggregate the TNFD and SBTN guidance for companies to get started:
Download our whitepaper for a detailed step-by-step guide and additional resources for assessment.
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