Below is an excerpt from ISS-Corporate’s recently released paper “Putting TNFD to Work: Insights from Early Adopters”. The full paper is available for download from the ISS-Corporate online library.
INTRODUCTION
The number of companies embracing early adoption of the Taskforce on Nature-related Disclosures (TNFD) framework grew considerably last year, signaling global interest in understanding the risks and opportunities resulting from nature-related impacts and dependencies.
Early Adopters are expected to release a large number of inaugural TNFD-aligned disclosures this year, providing insights into the ways companies are applying the standards to suit their specific circumstances.
According to the TNFD, the 502 organizations that committed to early adoption by October 2024 (up from 320 organizations in January 2024) represent approximately $6.5 trillion in market capitalization and $17.7 trillion in assets under management. In October 2024, the TNFD released an updated list of Early Adopters; revealing that the majority of them are based in the Asia Pacific region and Europe (47% and 36%, respectively).
ISS-Corporate analyzed disclosures and assessment metrics from a selection of Early Adopters, including companies participating in the TNFD pilot program, to identify common practices. ISS-Corporate’s analysis revealed several consistent practices, including:
- Recognition of climate and nature as interconnected issues: Climate change and impacts on ecosystems can have both negative and positive feedback cycles, exacerbating risks or creating new opportunities for companies.
- Integrated reporting: Companies leveraged integrated risk assessments and reporting practices developed in alignment with the Taskforce on Climate-related Financial Disclosures (TCFD) recommendations and in combination with the TNFD framework.
- Flexible applications of the Locate, Evaluate, Assess, Prepare (LEAP) approach: Companies tailored the framework to fit their specific operational contexts, industries, and sustainability priorities.
- Enhancement of nature assessments through data tools: These tools provide actionable insights into environmental dependencies, impacts, and risks, enabling companies to make informed decisions and align their strategies with sustainability goals.
By:
Nick Kraft, Senior Associate, Sustainability Advisory, ISS-Corporate
Wesley Leung, Senior Associate, Sustainability Advisory, ISS-Corporate
