Every business depends on nature, even the ones that never think about it. Crops need pollinators and stable rainfall, factories need fresh water, and supply chains run on timber, fibre, minerals, and soil. For decades that dependence sat outside the accounts, treated as a free and limitless backdrop. As ecosystems degrade, it has moved onto the balance sheet as nature-related risk, and a new field of practice has grown up to measure it. The Taskforce on Nature-related Financial Disclosures, or TNFD, is the framework most of that work now organises around.
This guide explains what nature-related risk means, what the TNFD asks companies to do, how nature targets get set, and what kind of expertise the field draws on.
Why nature became a balance-sheet issue
The shift is partly a matter of scale. The World Economic Forum estimates that more than half of global GDP is moderately or highly dependent on nature and the services it provides (around 44 trillion US dollars, roughly 55% of GDP, per the WEF's 2020 analysis). Those services, from pollination and water filtration to flood protection and healthy soil, carry no invoice, so they rarely appear in a financial model. When they fail, the cost arrives suddenly: a drought that halts production, a fishery that collapses, a permit refused because a project threatens a protected habitat.
Investors and regulators have started to treat that exposure the way they treat climate exposure, as a financial risk that has to be measured and disclosed. The same logic that made carbon a board-level issue is now being extended to nature.
Dependencies, impacts, risks, and opportunities
Nature analysis turns on four linked ideas, and keeping them distinct is the first thing a practitioner learns.
- Dependencies are what a business relies on from nature: water, pollination, a stable coastline.
- Impacts are what the business does to nature: pollution, land-use change, water extraction, habitat loss.
- Risks are how those dependencies and impacts return as financial consequences: a disrupted supply, a lost licence to operate, a reputational hit, a tightening rule. This is what nature-related risk, or biodiversity risk, means in practice.
- Opportunities are the upside: restoring a watershed, switching to regenerative sourcing, or building products that ease the pressure on ecosystems.
This is the idea of double materiality in practice. A company is asked to report both how nature affects its finances and how its operations affect nature, rather than choosing one direction and ignoring the other.
What the TNFD framework asks for
The TNFD deliberately mirrors the climate framework that came before it, the TCFD, so a company already reporting on climate can extend the same machinery rather than build a parallel one. Its disclosures sit under four familiar pillars: governance, strategy, risk and impact management, and metrics and targets.
The practical heart of the framework is a process the TNFD calls LEAP: Locate, Evaluate, Assess, Prepare. A team locates where the business touches nature, evaluates its dependencies and impacts at those places, assesses the resulting risks and opportunities, and prepares to respond and report. The sequence matters, because the first question in nature work is always where.
Why location changes everything
A tonne of carbon has the same effect on the climate wherever it is released, which is why climate reporting can lean on a single unit. Nature does not behave that way. Drawing a thousand cubic metres of water from a stressed river in a dry basin is a serious impact; drawing the same volume from an abundant catchment may be trivial. So nature analysis is inseparable from the specific places a company and its suppliers operate, which is why spatial data, maps, and site-level fieldwork sit at the centre of the work rather than at the edge of it.
How nature targets get set
Two reference points anchor most corporate nature goals. The first is the Kunming-Montreal Global Biodiversity Framework, agreed by governments in 2022, whose headline aim is to halt and reverse biodiversity loss by 2030. That is the nature-positive goal companies increasingly cite. The second is the Science Based Targets Network, which is building the methods that let a company set measurable, science-based targets for freshwater, land, and biodiversity, much as the Science Based Targets initiative did for emissions.
Reporting rules are catching up too. Europe's Corporate Sustainability Reporting Directive includes a dedicated biodiversity standard, ESRS E4, which is pulling nature disclosure out of the voluntary column and into law for thousands of companies.
Where the work is
Nature-related practice is young, which is why demand outruns the supply of people who can do it. A single disclosure can call for an ecologist to read habitat data, a spatial analyst to map sites against biodiversity layers, a water specialist to judge catchment stress, a footprinting expert to trace impacts down a supply chain, and a strategist to translate all of it into governance and targets the board can sign off. Few firms hold that range in-house, so the field leans heavily on specialists brought in for a defined scope.
How it differs from climate work
Climate reporting has a decade of head start, a common metric, and mature data. Nature reporting has none of those comforts yet. There is no single number to manage, the data is patchy and place-specific, and methods are still settling. That makes the work harder, but it also makes credible expertise scarce and valuable, and it is why nature is moving from a niche corner of sustainability into one of its fastest-growing fields.