Introduction
The framework for Nature-Related Financial Disclosures (TNFD) was officially launched during the UN Climate Week in New York. Companies are now shifting their focus from climate-related financial disclosures (TCFD) to assessing natural risks, evaluating the impact of their operations and business activities on natural ecosystems. The global voluntary initiative, the Taskforce on Nature-related Financial Disclosures (TNFD), was established in 2021. After multiple discussions and the release of four beta versions of the disclosure recommendations, the final Version 1.0 was published in September 2023.
TNFD has introduced the LEAP assessment approach and provides tools and data support. This enables companies to gradually identify key hotspots of mutual impact with the natural environment through a comprehensive analysis of ecosystem services, dependencies, impacts, risks, and opportunities. This offers companies deeper insights into their interactions with nature.
Purpose and Benefits
1. Early Identification of Financial Hotspots: Understand significant natural impact financial hotspots
during the company's operations and business activities in advance.
2. Establish transformational actions and goals to proactively address the concerns of customers and investors.
3. Establish relevant indicators for natural capital to measure the progress of the company's natural capital objectives.
4. Respond to international survey assessments, such as the CDP questionnaire.
5. Align with sustainability reporting framework requirements, such as IFRS/SASB/GRI.
Guidance Process
1. Confirm organizational boundaries and business operational activities.
2. Establish initial governance and management framework for the organization to identify participating departments and allocate relevant tasks.
3. Map upstream and downstream value chains related to biodiversity to determine the boundaries of risks and opportunities.
4. Identify the location of facilities, impact areas, positions of natural ecosystems, and priority environmental projects (e.g., conservation areas, water pressure zones).
5. Assess reliance on and impacts of operations on the natural world, such as water intake within its watershed, whether discharged water quality affects local biodiversity, soil, and other environments.
6. Establish or apply enterprise-level risk mechanisms to assess whether these operational activities pose enterprise-related risks (regulatory/technical/reputational/market) and consider opportunities for improvement.
7. Identify which risks and opportunities will affect the company and establish:
(1)Relevant indicators (including monitored ecological indicators).
(2)Short, medium, and long-term actions and responsible departments.
(3)Corresponding goals for short, medium, and long-term actions.
(4)Set indicator and goal monitoring frequencies.
(5)Confirm reporting information.
Review and confirm the final governance framework and responsibilities.
9. Publish the organization's TNFD report and respond to stakeholders.
