Nature-related financial disclosures

Nature-related financial disclosures are an emerging area of reporting that reflect the dependencies, impacts, risks and opportunities businesses face in relation to nature and biodiversity. These disclosures are becoming increasingly relevant as organisations seek to align with global sustainability expectations and respond to evolving market, regulatory and stakeholder pressures.

Currency of information

This publication, current as of June 2024, is designed to help professionals understand and apply nature-related disclosure frameworks. As the field evolves rapidly, readers are advised to monitor future developments and regulatory updates.

Glossary

The report includes key terms and acronyms such as TNFD, ISSB, GRI, and LEAP, which frame the discussion throughout the FAQs. These definitions help establish a common understanding for practitioners.

Frequently asked questions

The FAQ section addresses core themes across 31 questions, including the distinction between nature and biodiversity, ecosystem services, planetary boundaries, and the relationship between climate and nature. It explains that over 50% of global GDP—approximately US$44 trillion—is moderately or highly dependent on nature. Sectors such as real estate, aviation, retail, and chemicals are particularly exposed through both direct operations and supply chains.

The guide introduces the Taskforce on Nature-related Financial Disclosures (TNFD), a global initiative providing a framework for identifying, assessing and disclosing nature-related risks and opportunities. TNFD’s recommendations are built around four pillars: governance, strategy, risk & impact management, and metrics & targets. The framework includes the LEAP approach—Locate, Evaluate, Assess and Prepare—to support assessment and reporting.

The TNFD aligns with existing global standards, including ISSB and GRI, and accommodates multiple materiality lenses, including financial and impact materiality. Its sector-specific metrics, due for finalisation in 2024, will apply on a ‘comply or explain’ basis.

While nature-related disclosures are not yet mandatory, several jurisdictions, including Australia and New Zealand, are moving towards this direction. Under existing financial and corporate governance obligations, material nature-related risks may already need to be disclosed. GBF Target 15, adopted in 2022 by 196 countries, is expected to drive mandatory nature-related disclosures by 2030.

The report highlights legal obligations for directors to consider nature-related risks under duties of care and diligence. Legal opinions in Australia and New Zealand suggest that failing to address foreseeable and material nature-related risks could expose directors to liability.

Greenwashing is also addressed in depth, with both ASIC and ACCC outlining legal risks and principles for avoiding misleading environmental claims. The guide details common greenwashing practices and provides practical recommendations to avoid them, particularly in sustainability reporting and marketing.

Other key themes include biodiversity credits, which offer a tradeable mechanism to finance conservation outcomes, and the concept of “nature positive,” a global goal to halt and reverse nature loss by 2030. While businesses can contribute, no single organisation can claim to be wholly nature positive.

Resources

The report concludes with links to supporting materials, pilot studies, and case studies to assist entities beginning their TNFD-aligned disclosure journey. Tools such as the Natural Capital Protocol and sector-specific guidance from organisations like the WEF and WBCSD are also referenced to support practical applications.