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Governance Authority
Category: Sustainability and ESG

Nature-Related Disclosure

Also known as: Nature-related Financial Disclosure, TNFD disclosure
Simply put

A nature-related disclosure is a report in which an organization explains how it depends on and affects nature, and the risks and opportunities that arise as a result. It is intended to help investors and markets understand and price nature-related risks so that capital can be directed accordingly. Such disclosures are typically prepared using a voluntary framework rather than a single universal legal mandate.

Formal definition

Nature-related disclosure refers to the reporting of an organization's nature-related dependencies, impacts, risks, and opportunities, most prominently structured under the recommendations and guidance developed by the Task Force on Nature-related Financial Disclosures (TNFD). The TNFD framework provides a structured set of disclosure recommendations intended to encourage and enable organizations to assess, report, and act on their relationship with nature, and to integrate nature into decision-making. Practitioners should note that the TNFD framework is a set of voluntary recommendations rather than a binding standard in itself; the extent to which any element becomes a legal requirement depends on jurisdiction, sector, entity type, and whether local authorities or listing regimes incorporate such recommendations into mandatory rules. This entry is educational and not legal, audit, or compliance advice; the specific scope of any obligation should be confirmed against applicable law and professional judgment.

Why it matters

Nature-related disclosure has emerged as a distinct area of sustainability reporting because an organization's relationship with nature is a source of both risk and opportunity that markets have historically found difficult to see or price. The core rationale, as articulated by proponents of the TNFD framework, is to enable markets to price in nature-related risks and opportunities so that capital flows toward more resilient outcomes. For boards and management, this reframes nature not as a peripheral environmental concern but as a factor relevant to strategy, risk management, and long-term value.

For governance, risk, and compliance functions, the significance lies in how nature-related dependencies and impacts translate into enterprise risk. An organization that depends on natural inputs, or that affects natural systems, may face financial, operational, regulatory, or reputational consequences that belong within existing risk management and oversight processes. Disclosure frameworks such as the TNFD are designed to help organizations assess, report, and act on these dependencies, impacts, risks, and opportunities in a structured way, and to integrate nature into decision-making rather than treating it as a separate silo.

It is important to be clear about the limits of this significance. The TNFD framework is a set of voluntary recommendations, not a binding standard in itself. Whether any element of nature-related disclosure becomes a legal requirement depends on jurisdiction, sector, entity type, and whether local authorities or listing regimes incorporate such recommendations into mandatory rules. Organizations should therefore treat nature-related disclosure as a developing practice whose obligations must be confirmed against applicable law rather than assumed to be uniform or mandatory.

Who it's relevant to

Boards and their committees
Boards, and committees with oversight of risk or sustainability, may need to consider whether nature-related dependencies, impacts, risks, and opportunities are adequately understood and reflected in strategy and risk oversight. The board's role is generally one of oversight rather than preparing the disclosure itself; directors typically satisfy themselves that management has appropriate processes in place. Whether any formal disclosure is required depends on the applicable jurisdiction and regime.
Management and sustainability reporting teams
Management typically owns the operational work of identifying nature-related dependencies and impacts, assessing the associated risks and opportunities, and preparing any disclosure using a framework such as the TNFD. These teams integrate nature into decision-making and coordinate with finance, operations, and other functions to gather and report the relevant information.
Risk and compliance functions
Risk functions may incorporate nature-related risks into enterprise risk management processes, while compliance functions may need to monitor whether and where TNFD-aligned or mandatory nature reporting applies to the organization. Because obligations vary by jurisdiction, sector, entity type, and listing regime, these functions play a role in confirming what is voluntary and what may be legally required.
Investors and capital markets participants
A central purpose of nature-related disclosure is to help investors and markets understand and price nature-related risks and opportunities so that capital can be directed accordingly. Investors are therefore both an intended audience for these disclosures and, in some cases, a driver of demand for them.
Assurance providers and internal audit
Internal auditors and external assurance providers may be asked to evaluate the processes and controls supporting nature-related disclosures, or in some cases the reported information itself. The nature and extent of any assurance depends on the applicable framework, regulatory requirements, and the organization's own choices.

Inside Nature-Related Disclosure

Governance of nature-related matters
Disclosure of how the board and management oversee and manage nature-related dependencies, impacts, risks, and opportunities. This typically clarifies where oversight sits (board or a designated committee) versus where operational management sits, though the specific allocation depends on the entity's structure and the applicable framework.
Strategy and business-model impacts
Description of how nature-related risks and opportunities affect the organization's strategy, business model, and financial planning over relevant time horizons, generally including the entity's dependencies on and impacts to nature. The depth expected varies by framework and by whether the disclosure is voluntary or mandated in a given jurisdiction.
Risk and impact management
Explanation of the processes used to identify, assess, prioritize, and monitor nature-related dependencies, impacts, risks, and opportunities, and how these are integrated into broader enterprise risk management. Note that identifying an impact on nature is conceptually distinct from identifying a risk to the entity; some frameworks address both.
Metrics and targets
Quantitative and qualitative indicators used to measure and manage material nature-related matters, along with any targets set. The choice of metrics and whether targets are required depends on the applicable framework, sector, and jurisdiction.
Location and value-chain considerations
Information reflecting that nature-related dependencies and impacts are often location-specific and may arise across the value chain. Some frameworks emphasize assessment at particular sites or ecosystems, though scope and expectations vary.
Framework and assurance context
Reference to the framework or standard under which the disclosure is prepared and, where applicable, the level of assurance obtained. Whether a nature-related disclosure is a legal requirement or a voluntary practice depends on jurisdiction, sector, and entity type.

Common questions

Answers to the questions practitioners most commonly ask about Nature-Related Disclosure.

Is nature-related disclosure just another name for climate-related disclosure?
No. While the two are related and often addressed by the same reporting teams, they are distinct in scope. Climate-related disclosure typically focuses on greenhouse gas emissions, physical and transition risks, and climate resilience. Nature-related disclosure generally covers a broader set of dependencies and impacts on natural systems, such as biodiversity, water, land use, and ecosystem services, that extend well beyond climate. Some frameworks are designed to be consistent with climate reporting structures to ease integration, but treating nature as a subset of climate risks understating the distinct dependencies and impacts an organization may need to assess. The precise boundaries depend on the framework applied and, where relevant, the jurisdiction's requirements.
Are nature-related disclosures a legal requirement that all companies must follow?
Not universally. The status of nature-related disclosure varies significantly by jurisdiction, sector, and entity type. Some widely referenced frameworks are voluntary and provide recommendations or guidance rather than binding obligations, while certain jurisdictions have moved to incorporate nature or sustainability reporting into mandatory regimes for specified entities. Whether a given organization faces a binding requirement, a comply-or-explain expectation, or a purely voluntary standard depends on where it operates, its size and sector, and the specific rules or codes that apply to it. Organizations should confirm their obligations against the applicable law and regulation rather than assuming a single global mandate exists. This entry is educational and not legal or compliance advice.
Which function within the organization should own nature-related disclosure?
Ownership typically spans several functions, and it is important to distinguish their roles. The board generally holds oversight responsibility, including satisfying itself that material nature-related risks and the associated disclosure processes are governed appropriately, often through a designated committee. Management typically owns the operational tasks, identifying dependencies and impacts, gathering data, assessing risk, and preparing the disclosure. Assurance functions, such as internal audit, may provide independent evaluation of the related controls and processes without owning the disclosure itself. The specific allocation depends on the organization's structure, and many entities coordinate across sustainability, risk, finance, and legal teams rather than assigning the work to a single owner.
How does an organization determine what nature-related information is material enough to disclose?
Materiality assessment depends on the framework and reporting regime an organization applies, and definitions of materiality can differ, some focus on information relevant to investors' financial decisions, while others also consider the organization's impacts on nature and society. In practice, organizations generally begin by identifying their dependencies on and impacts to natural systems across operations and, where applicable, the value chain, then evaluate which of these could give rise to material risks or effects. Because materiality involves judgment about likelihood and significance, the conclusions depend heavily on specific facts, the applicable framework's materiality concept, and the organization's own assessment. Professionals should apply the definition set by the standard they are reporting under.
What data and processes are typically needed to support nature-related disclosure?
Nature-related disclosure generally requires data on an organization's dependencies and impacts, which may include information about locations of operations, resource use, and interactions with sensitive ecosystems. Because relevant data is often distributed across business units and value chains, organizations typically need processes to source, aggregate, and quality-check this information, along with methodologies for assessing dependencies and impacts. Establishing controls over data collection and reporting, covering both control design and operating effectiveness, helps support the reliability of what is disclosed. Data availability and quality are commonly cited challenges, and the appropriate approach depends on the organization's circumstances and the framework it applies.
How can nature-related disclosure be integrated with existing risk management and reporting?
Many organizations seek to integrate nature-related considerations into existing enterprise risk management and sustainability reporting rather than running a parallel process, in part because some frameworks are structured to align with established climate and risk reporting approaches. Integration typically involves incorporating nature-related dependencies and impacts into risk identification, assessment, and monitoring activities, and connecting the results to governance and disclosure processes. Distinguishing nature-related risk from climate-related risk while reflecting their interconnections is generally advisable. The extent and method of integration depend on the organization's existing risk framework, the disclosure regime it is subject to, and professional judgment about how to align these processes effectively.

Common misconceptions

Nature-related disclosure is a universal legal requirement for all organizations.
Whether such disclosure is mandatory depends on jurisdiction, sector, entity type, and the specific regime in force. In many settings it is undertaken under voluntary frameworks or best-practice guidance rather than binding law, and requirements differ considerably across jurisdictions.
Disclosing an organization's impact on nature is the same as disclosing nature-related risk to the organization.
These are distinct concepts. An impact refers to how the entity affects nature, while a risk refers to how nature-related factors may affect the entity. Some frameworks address both, and treating them as interchangeable can obscure what a disclosure actually covers.
Producing a nature-related disclosure is primarily a board responsibility.
The board generally holds an oversight role, while management typically owns the operational activities of identifying, assessing, and managing nature-related matters and preparing the disclosure. The specific allocation should be described according to the entity's governance structure rather than assumed.

Best practices

Clarify in the disclosure where oversight sits (board or a designated committee) versus where operational management and preparation responsibilities sit, avoiding conflation of the two.
State explicitly which framework or standard the disclosure follows and whether it is prepared to meet a legal requirement or on a voluntary basis, noting that this varies by jurisdiction, sector, and entity type.
Distinguish clearly between the organization's impacts on nature and nature-related risks to the organization, and address each to the extent the chosen framework and materiality assessment call for.
Integrate the identification and monitoring of nature-related matters into existing enterprise risk management processes rather than treating them as a standalone exercise.
Where nature-related dependencies and impacts are location- or value-chain-specific, reflect that specificity rather than relying only on entity-wide generalizations.
Use qualified, evidence-based language for metrics and targets, disclose any assurance obtained, and treat the disclosure as an educational and reporting product that may warrant professional legal, audit, or compliance input before finalization.