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Assessing Nature's Impact and Opportunities in Australian Business Reporting

TNFD Acronym Image

The Taskforce on Nature Related Financial Disclosures (TNFD) has released final recommendations designed to standardise reporting, risk management and opportunities from nature-related impacts.

The global community recognises that to achieve net-zero emissions, business needs to include ‘nature’ in its financial and strategic decision-making. This is of huge significance for many Australian operators whose success largely depends on nature; industries include agriculture, fishing, tourism, and resources, to name a few. It clearly spotlights nature and heralds a growing awareness of the economic value it offers, particularly to organisations who transition their operations (investments, activities and outcomes) to a ‘nature positive’ status.

Similar to the Taskforce on Climate Related Financial Disclosures (TCFD), disclosures under the TNFD do not require quantitative metrics to begin reporting, which effectively nullifies the excuse that ‘data constraints’ delay reporting.

The TNFD is expected to be adopted faster than its predecessor, raising the bar on how organisations and their directors meet their obligations surrounding nature-related risks and opportunities for the business, with improved disclosures directly linked to improvements in reliable data collection and analytics across operations and value-chains.

In time, the TNFD anticipates reporting of nature-related issues along with climate reporting and other ESG metrics, will move into mandatory sustainability reporting. Additionally, the International Sustainability Standards Board (ISSB) will consider these disclosures in the future, as a potential priority.

So, what is the TNFD?

It is a voluntary framework to standardise nature-related risk management, reporting and opportunities for business. Information is disclosed using the ISSB’s sustainability-baseline, resulting in a globally consistent, common language for comparison of information. Under the TNFD, companies disclose their ‘nature’ position across Governance, Strategy, Risk, Metrics & Targets.


When reporting a company’s nature-related risks, opportunities, targets and commitments, there are three words to keep in mind – trust, transparency, and regulations. Given significant regulatory activity and investor-activism in Australia, increased enforcement activity relating to greenwashing seems likely.

The same rules that apply to climate disclosures, apply to nature disclosures and nature-related targets and commitments. To ensure stakeholders have a clear understanding of a company’s impact on nature, both positive and negative results should be disclosed separately without exaggerating the benefits or diminishing the harm. The ACCC and ASIC offer guidelines on how to avoid greenwashing when making nature-related claims.

Increased investor engagement

Under the TNFD, information for investors will be more readily available, leading to an increase in the number of interactions about nature-related risks and opportunities, in investor engagements including AGM’s.


Under the TNFD, a company’s governance of nature-related impacts, risks and opportunities should include:

  • Board oversight and management’s role in assessing nature-based issues

  • A company’s human rights policies and meaningful stakeholder engagement activities

  • Board and management oversight of impacted local communities, Indigenous communities and other stakeholders, to respond to nature-based issues

Additionally, the discharge of statutory duties by boards and senior management is likely to come under increased scrutiny from stakeholders, regarding ‘nature’ issues.

A green opportunity for all

Australia is in a unique position to take advantage of the opportunities offered by nature and manage the risks inherent. Early adopters of the TNFD recommendations will benefit from identifying the opportunities and risks posed to their operations.

With ‘nature’ now a global focus for institutional investors, shareholders and other stakeholders, Australian business needs to seize the opportunity to become nature-positive to avoid being left behind in the global race to recognise the all-encompassing power of nature.


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