Strategic Focus: The Connection Between The TCFD, TNFD And ESG Risk

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Executive Summary

Urgent action is needed to prevent rapid biodiversity and nature loss, with over half of the world’s GDP ($58 trillion) highly or moderately dependent on nature – and at risk. Nature is now in the business spotlight, with the final release of the recommendations of the Taskforce for Nature-related Financial Disclosures (TNFD) in September 2023, following investor recognition of the importance of assessing biodiversity risks, impacts and opportunities. In fact, research by the World Economic Forum (WEF) predicts that nature-positive solutions could generate $10.1 trillion in business opportunities and create over 100 million jobs globally by 2030. This report breaks down the challenges associated with nature reporting, outlines the potential business risks, and sets out steps for best practice. Chief sustainability officers (CSOs) and global heads of net zero and climate risk, as well as enterprise risk management professionals, can use the report to understand the key challenges associated with bridging climate and nature for enhanced ESG risk management, as well as the direct business benefits produced by merging climate and nature, and best practices in assessments for successful integration.

Table of contents

Firms must address both nature and climate risks for holistic ESG risk management
Echoing the TCFD, the TNFD forces firms to take action on ESG challenges and risks
An integrated approach to climate and nature action brings direct business benefits

Table of figures

Figure 1. Examples of ESG-related risks
Figure 2. The TNFD final release framework furthers the scope of the TCFD
Figure 3. The global climate-nature reporting landscape
Figure 4. TNFD business and sustainability performance opportunities
Figure 5. Essential steps to integrate nature into ESG risk management

About the authors

Jessie Wilson

Industry Analyst
Jessie is an Industry Analyst in the Verdantix ESG & Sustainability practice. Her current research agenda spans areas such as ESG reporting, the circular economy and supply chain sustainability. Prior to joining Verdantix, Jessie graduated from the University of Bristol with First Class Honours in BSc Geography and French. Her dissertation was on achieving a circular economy for plastics with reusable packaging.

Kim Knickle

Research Director, ESG & Sustainability
Kimberly Knickle is Research Director of the ESG & Sustainability practice at Verdantix. Her research areas encompass ESG regulations and reporting, ESG risk, supply chain sustainability, circular economy, social impact, and sustainable finance. Kim has worked for more than 20 years in the IT industry, providing research and analysis to help companies invest wisely in new technologies. Before joining the analyst industry, she held various roles in IT services, engineering and product safety testing, beginning her career at Underwriters Laboratories, Inc. Kim holds an MBA from Boston University and a BS in Electrical Engineering from Cornell.

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