Quick Comparison
| TCFD | TNFD | |
|---|---|---|
| Scope | Climate-related financial risks and opportunities | Nature-related financial risks and opportunities |
| Applicability | Any organization across all sectors | Any organization, with priority guidance for high-dependency sectors |
| Required/Voluntary | Voluntary (mandated in several jurisdictions, now succeeded by ISSB) | Voluntary recommendations |
| Geography | Global | Global |
| Key Focus | Climate transition and physical risks | Biodiversity loss, ecosystem degradation, nature dependencies |
| Assurance | Not specified | Not specified; assurance readiness being developed |
What is the TCFD?
The Task Force on Climate-related Financial Disclosures published its recommendations in 2017, establishing a globally recognized framework for companies to disclose climate-related financial risks and opportunities. Organized around four pillars — Governance, Strategy, Risk Management, and Metrics & Targets — the TCFD became the most influential climate disclosure framework in history, adopted or referenced by regulators and stock exchanges in over 30 jurisdictions.
The TCFD focused on two categories of climate risk: physical risks (acute events like floods and chronic changes like sea-level rise) and transition risks (policy, technology, market, and reputational changes associated with the shift to a low-carbon economy). It also encouraged companies to identify climate-related opportunities. The framework's structured approach to scenario analysis was particularly influential, pushing organizations to think systematically about how different climate pathways could affect their business.
The TCFD formally completed its work in October 2023, transferring its monitoring responsibilities to the ISSB. Its four-pillar architecture lives on in IFRS S2 and continues to shape climate disclosure globally.
What is the TNFD?
The Taskforce on Nature-related Financial Disclosures published its final recommendations in September 2023, following a design process that deliberately mirrored and built upon the TCFD. The TNFD provides a framework for organizations to report on their nature-related dependencies, impacts, risks, and opportunities — covering biodiversity, ecosystems, and the services they provide.
The TNFD framework uses the same four-pillar structure as TCFD (Governance, Strategy, Risk Management, Metrics & Targets) with fourteen recommended disclosures that parallel and extend the TCFD's eleven. Critically, the TNFD adds a requirement to report on nature-related dependencies and impacts alongside risks and opportunities, recognizing that organizations both depend on and affect natural capital.
A distinctive feature of the TNFD is its LEAP approach — Locate, Evaluate, Assess, Prepare — a practical methodology for organizations to identify and assess their nature-related issues. LEAP helps companies understand where their operations and value chains interface with nature, evaluate dependencies and impacts, assess risks and opportunities, and prepare disclosure responses.
Key Differences
1. Subject Matter: Climate vs Nature
The most obvious difference is topical scope. TCFD addresses climate change — greenhouse gas emissions, energy transition, physical climate impacts. TNFD addresses nature more broadly — biodiversity loss, land-use change, water stress, ocean degradation, pollution, and invasive species. Climate change is one driver of nature loss, but the TNFD covers the full range of pressures on natural systems as identified by the Kunming-Montreal Global Biodiversity Framework.
2. Dependencies and Impacts
The TCFD focused primarily on how climate affects the company (outside-in risk) and the company's contribution to emissions (inside-out metrics). The TNFD explicitly addresses both directions: how an organization depends on nature (ecosystem services like pollination, water purification, soil fertility) and how it impacts nature (habitat destruction, pollution, resource extraction). This dual lens reflects the reality that nature-related risks are often driven by an organization's own impacts.
3. Location Specificity
Climate change is a global phenomenon — a ton of CO2 has the same warming effect regardless of where it's emitted. Nature is inherently local. Biodiversity hotspots, water basins, and ecosystems vary dramatically by geography. The TNFD therefore requires location-specific assessment through its LEAP approach, asking companies to map their direct operations and value chain interfaces with specific ecosystems and biomes. This spatial dimension is largely absent from TCFD.
4. Maturity of Metrics
TCFD benefited from well-established emissions accounting standards (GHG Protocol) and relatively straightforward metrics (tons of CO2-e, energy consumption). Nature metrics are less standardized and more complex. How do you measure biodiversity impact across a supply chain? The TNFD provides core global metrics (including extent of land/freshwater/ocean use change, pollutants released, and species affected) and additional sector-specific metrics, but acknowledges that nature measurement science is still evolving.
5. Scenario Analysis
TCFD popularized climate scenario analysis using established pathways (1.5°C, 2°C, 4°C). The TNFD recommends scenario analysis for nature but acknowledges that nature scenarios are less developed than climate scenarios. The framework references emerging tools but does not prescribe specific scenarios. Organizations familiar with climate scenario analysis will find nature scenarios more complex due to the local, multi-dimensional character of nature-related risks.
6. Regulatory Adoption
TCFD recommendations were mandated or encouraged by dozens of jurisdictions and have been absorbed into ISSB (IFRS S2) and EU (ESRS E1) regulatory frameworks. The TNFD is earlier in its regulatory journey. France's Article 29 and the EU's ESRS (particularly E4 on Biodiversity) incorporate nature-related disclosure requirements, and several jurisdictions are signaling future adoption. The Kunming-Montreal Global Biodiversity Framework's Target 15 calls on governments to require corporate nature-related disclosures, providing a policy tailwind.
7. Sector Prioritization
While TCFD applied universally, the TNFD has developed additional guidance for eight priority sectors with the highest nature dependencies and impacts: food and agriculture, mining, oil and gas, electric utilities, forestry and paper, chemicals, aquaculture, and financial institutions. This sector-specific guidance goes beyond what TCFD provided for its focus sectors.
Which One Do You Need?
TCFD (now ISSB) is essential for any organization facing climate-related risks or subject to jurisdictions adopting climate disclosure mandates. Since TCFD has been succeeded by ISSB, new reporters should target IFRS S2 directly.
TNFD is increasingly important for organizations with significant nature dependencies or impacts — particularly in agriculture, food and beverage, mining, forestry, real estate, and infrastructure. It's also relevant for financial institutions with exposure to these sectors. Even without current regulation, early TNFD adoption signals leadership and prepares organizations for the regulatory direction.
Both frameworks address complementary dimensions of environmental risk. Organizations with material climate and nature exposures need both, and the aligned structure makes dual adoption efficient.
Can You Use Both?
The TNFD was explicitly designed to complement the TCFD, not replace it. The shared four-pillar architecture means organizations can produce a unified environmental risk disclosure that addresses both climate and nature. Many of the governance and risk management disclosures overlap — the board oversight and risk integration processes are often the same.
The practical approach is to extend an existing TCFD/ISSB reporting process to incorporate nature. The TNFD's LEAP methodology can be run alongside or following a climate risk assessment, and the resulting disclosures can be presented in an integrated format. The EU's ESRS already takes this integrated approach, with separate topical standards for climate (E1), pollution (E2), water (E3), biodiversity (E4), and circular economy (E5).
Council Fire's Perspective
Nature-related disclosure is where climate disclosure was in 2017 — early, imperfect, but clearly directional. Organizations that engaged with TCFD early gained a significant advantage when climate disclosure became mandatory. We're advising clients to take the same approach with TNFD, particularly in sectors with obvious nature dependencies. The LEAP methodology is genuinely useful as a strategic exercise, even before it generates disclosures.
The data challenge is real. Nature metrics require spatial analysis, ecosystem-specific indicators, and value chain mapping that goes beyond what most organizations have built for climate. But the tools are advancing rapidly, and the cost of playing catch-up when regulation arrives will be far higher than building capability now. We help clients start with a targeted LEAP assessment of their highest-risk locations and supply chain nodes, then expand coverage over time.
Frequently Asked Questions
Does TNFD replace TCFD?
No. TNFD addresses nature-related risks; TCFD (now ISSB IFRS S2) addresses climate-related risks. Climate is one driver of nature loss, so there is overlap, but the TNFD covers biodiversity, land use, water, and other nature dimensions beyond climate. Organizations need both frameworks for comprehensive environmental risk disclosure.
Is TNFD reporting mandatory anywhere?
Not yet in most jurisdictions, but the direction is clear. The EU's ESRS E4 (Biodiversity and Ecosystems) is mandatory for CSRD-reporting companies where biodiversity is material. France's Article 29 requires nature-related disclosure from financial institutions. The Kunming-Montreal Global Biodiversity Framework's Target 15 calls on all large companies and financial institutions to assess and disclose nature-related risks by 2030.
How does the LEAP approach work in practice?
LEAP is a four-phase process: Locate your interfaces with nature (which ecosystems do your operations and supply chains touch?), Evaluate your dependencies and impacts on those ecosystems, Assess the resulting risks and opportunities to your business, and Prepare your response strategy and disclosures. Organizations typically start with their highest-risk locations or value chain segments and expand the analysis over time.
Can financial institutions use TNFD?
Yes, and the TNFD has developed specific guidance for financial institutions. Banks, asset managers, and insurers face nature-related risks through their portfolios and lending activities. The TNFD recommends that financial institutions assess the nature dependencies and impacts of their portfolio companies, prioritizing sectors and geographies with the highest nature-related risk exposure.
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