Nature is in the news. Reports of farmers in Europe protesting the proposed European Parliament’s Nature Restoration Law that aims to restore at least 20 per cent of the EU’s land and sea by 2030 are widespread. This legislation, which was voted through last week, on Tuesday 27th February, despite opposition, is part of increasingly rigorous and mandated regulation to protect nature.

Global business is no stranger to reporting on climate but nature cannot be overlooked.

Recommendations of the Taskforce on Nature-related Financial Disclosures (TNFD) Version 1.0 were published in September 2023. They provide a set of disclosure recommendations and guidance for organisations to report and act on evolving nature-related dependencies, impacts, risks and opportunities.

The EU’s Corporate Sustainability Reporting Directive (CSRD) is currently shaping corporate thinking around nature regulation and draws on the TNFD framework for its approach to environmental reporting. CSRD requires companies in scope to report, both qualitatively and quantitatively, on a wide range of environmental, social and governance (ESG) topics. It mandates detailed reporting on sustainability matters related to water, land-use, biodiversity, human rights, labour rights and circular business models.

The recent announcement of the proposed Chinese disclosure rules, which will require large, listed companies to disclose from 2026 based on 2025 information, endorses double materiality, requiring a company to report not only on external impacts affecting its financial position but the impact the company has on ESG factors, and includes Scope 1, 2 and 3 greenhouse gas (GHG) emissions.

The inclusion of biodiversity and nature in financial reporting agendas is driven by increasing awareness among investors and business leaders of the economic risks posed by biodiversity loss and emerging opportunities in a nature-positive economy. The overall goal is to support a shift in the flow of global capital away from nature-negative outcomes and towards nature-positive activities.

However, integrating nature-related risks and opportunities into financial reporting and decision-making processes requires organisations to understand the confluence of climate and nature, and to quantify and manage their environmental impacts and dependencies. This is no small task. The intricate interdependencies within natural systems and their interaction with human activities add complexity to identifying, quantifying and managing nature-related risks.

While challenging for business, reporting on environmental impacts and dependencies will become business as usual. The TNFD framework is currently voluntary but, in January 2024, an announcement at Davos confirmed that 320 organisations from 46 countries have already committed to start making nature-related disclosures based on the recommendations.

Astute business leaders will already be aware of nature as a growing commercial concern and such foresight brings advantage – components of TNFD are being incorporated into a range of mandatory disclosure frameworks.

By adopting the forward-looking TNFD framework, organisations can strategically plan for and mitigate against nature-related risks. These include likely increased cost for using water where it is scarce, higher penalties for pollution, regulatory taxation for deforestation and land-use change, surcharges for package littering, and end-of-life product disposal. All will impact businesses in unexpected ways.

There are benefits to becoming an early-stage TNFD reporter. Engagement with TNFD distinguishes companies as influential players in shaping the future nature-and-biodiversity reporting landscape. These organisations will be well positioned to enhance brand reputation while aligning with broader mandatory frameworks and securing long-term business resilience.

With much to gain for organisations positioned to capitalise on opportunities emerging from the nature-positive economy, the time to make nature your business is now.