Written by Shannon Wright-Davies and Henry Dalton of the Burges Salmon Pensions Team

The Taskforce on Nature-Related Financial Disclosures (TNFD) is a market-led, science-based and government-backed initiative providing organisations with the tools to act on evolving nature-related issues. TNFD has developed a set of disclosure recommendations and guidance which aims to increase focus by businesses and investors on biodiversity issues and transparency around exposure to key risks and opportunities. 

What are the recommendations? 

The TNFD outlined recommendations that centre around four pillars: governance, strategy, risk and impact management, and metrics and targets. These are the same four pillars of the Taskforce on Climate-Related Financial Disclosures (TCFD) and we have set all four out in further detail below. 


The TFND recommends disclosing nature-related dependencies, impacts, risks and opportunities. Practically, this includes a description of the board’s oversight of these matters, management’s role in assessing and managing them, and organisational policies on human rights especially with respect to indigenous peoples. 


On Strategy, the TNFD recommends disclosing nature-related dependencies, their risks, impacts and opportunities on the business model, strategy and financial planning. In practice, this means a description of the impacts, risks and opportunities over the short to long term; the effects of the nature-related dependencies on business models, value chains, strategy and financial planning; the organisational strategy’s resilience; and the locations of assets and activities. 

Risk and Impact Management 

The TNFD recommends that organisations describe their method of identifying nature-related dependencies in their direct operations and value chains; and how nature-related dependencies are monitored.

Metrics and Targets 

Within these pillars, there are fourteen recommended metrics to report that can be broadly divided into two categories: dependencies and impacts, and risks and opportunities. 

In the former, metrics like a company’s spatial footprint, wastewater discharge, plastic pollution and non-greenhouse gas air pollutants are all considered. In the latter, the vulnerability of assets and liabilities to transition and nature-related risk, nature-related investment opportunities, and the proportion of nature-positive revenue.

Why are the recommendations important? 

The TNFD has been designed to meet corporate reporting requirements across jurisdictions, conform to the global baseline for corporate sustainability reporting and align with the Kunming-Montreal Global Biodiversity Framework. The TNFD emphasises that society, the economy, financial systems, and the environment are inextricably linked. The resilience of society and the economy depends heavily on the health of nature and its biodiversity. 

The TNFD recognises the rapid decline in biodiversity and posits that ecosystem services are not being priced appropriately by business and financial markets today. The risks posed by environmental degradation are increasing in both severity and frequency. Global supply chains across the economy are facing disruptions from nature-related events from water shortages to earthquakes. The degradation of forests undermines the long-term security of valuable commodities while soil and land degradation adversely impacts company market values. 

Considerations for Trustees?

While the TNFD is a voluntary framework, Trustees should consider the risks it outlines when making investment decisions in much the same way as they consider other ESG factors. Trustees might want to discuss with their investment advisers whether they choose to adopt the recommendations as a method of identifying, assessing, managing and disclosing nature-related risks. 

The Government announced in its Green Finance Strategy that it will explore how the TNFD recommendations should be incorporated in the UK. 

You can read more about the TNFD on their website: The Taskforce on Nature-related Financial Disclosures (tnfd.global)

In order to ensure Trustees and sponsoring employers have a full understanding of Environmental, Social and Governance (“ESG”) requirements for pension schemes, we have launched the Pension Schemes ESG Tool, which can be accessed here .

We are well placed to advise on all aspects of ESG in relation to pension schemes. If you would like to explore this topic further, please contact Kate Granville Smith or Heather Musk.