The TNFD recommendations provide a voluntary framework for organisations to identify, assess, report and act on material nature-related risks and opportunities. While there are currently no mandatory nature-related disclosure requirements under Australian law, the TNFD has received strong support from the Australian Government and relevant industry groups. It is anticipated that the release of the TNFD recommendations will lead to increasing scrutiny of nature-related issues from consumers and investors alike, which in turn is expected to drive a substantial increase in market practice on nature-related reporting. Indeed, some Australian organisations may already have nature-related obligations under applicable European Union requirements.

The TNFD encourages organisations to get started now and begin their nature-related assessment reporting requirements notwithstanding any existing data constraints or other obstacles they may face. However, getting started on nature-related disclosures can be a daunting task.

To guide subscribers through the TNFD recommendations and how to begin their TNFD-aligned disclosure journey, Practical Law Corporate has recently published Practice note, Taskforce on Nature-related Financial Disclosure (TNFD): recommendations for disclosing nature-related financial information. This note:

• Considers the TNFD’s relationship with other initiatives, frameworks and standards.
• Explains the key terms and approaches of the TNFD recommendations, including the LEAP approach for assessing and measuring nature-related issues.
• Breaks down the TNFD recommendations, which consist of:
  • conceptual foundations for nature-related disclosures, which are the key concepts and approaches shaping the design of the TNFD recommendations;
  • a set of six general requirements that cut across the four pillars of the TNFD recommendations of governance, strategy, risk and impact management, and metrics and targets; and
  • a set of 14 recommended disclosures structured around the four recommendation pillars.
• Highlights additional guidance available on implementing the TNFD recommendations.
• Considers the likely adoption of the TNFD recommendations both globally and in Australia.
• Warns of the impact of nature-related risk on director’s duties.