Many organizations are already measuring and reporting on their environmental impacts. However, fewer are disclosing their nature-related dependencies, risks, and opportunities. For most, nature-related disclosure is still in its early stages, and significant gaps exist between their current reporting and the recommendations under the TNFD framework. To bridge this gap, a TNFD gap analysis can be conducted as a first step.
Here are the steps that can help organizations align with the TNFD framework:
1. Review publicly disclosed documents
Examine the organization’s quarterly and annual corporate reports, sustainability reports, governance documents, and website. This helps gather baseline information on the current state of corporate nature actions.
2. Benchmark Against Industry Peers
Compare this public information with that of industry peers. For example, mining companies, which often have significant biodiversity impacts due to land use change and operational emissions and effluents, can compare their nature-related actions and disclosures with similar-sized mining companies. This step can also reveal peer best practices for nature-related disclosures that can be utilized in the TNFD alignment process.
3. Conduct Internal Interviews and Stakeholder Engagement:
This step is crucial for identifying gaps in adhering to TNFD recommendations. Organizations may already be doing significant work in improving their nature and biodiversity strategy, restoring and conserving habitat, and disclosing relevant dependencies, impacts, risks and opportunities. However, these details may not be publicly available. Due to TNFD’s relatively novelty, nature-related disclosures are often not as detailed as those related to climate risks and dependencies.
4. Increase TNFD readiness and alignment
Once the company identifies on the disparities between the organization’s current state and the TNFD framework’s requirements, it can work on strategy to close the gaps and subsequently make such disclosure. This stage can involve preparing a roadmap towards alignment, listing priorities, and setting a timeline.
Gaps within the gap: what’s missing?
We have found that several aspects of a TNFD gap analysis are common:
Priority location: In TNFD disclosure, a ‘priority location’ is where an organization has either material nature-related dependencies, impacts, risks and opportunities, locations where operations and value chains interface with nature, or both. Many organizations have not fully understood how supporting biodiversity relates to their business risks. For example, if a business is operating in an area with endangered species, they need to manage those risks effectively.
Strategies and targets: Some organizations’ have ‘gaps’ in practical steps, such as developing a strategy and setting targets. For instance, an organization could set a target to restore one acre of disturbed land for every acre it disturbs, aligning with a nature positive future. The Science-based Target Network (SBTN) provides guidance for companies to develop nature-related targets that can help align with TNFD recommendations.
Set a roadmap for improved performance: Following the gap analysis, organizations should create plans with timelines, deliverables, and prioritize next steps. This ensures that identified gaps are addressed, and the organization can incrementally improve its alignment with TNFD recommendations.
Although TNFD compliance is voluntary, there is increasing pressure for organizations to invest in nature-related disclosures to meet the expectations of investors, financial institutions, and other stakeholders, such as employees, customers, and local communities. Our team of professionals can leverage their experience and familiarity with TNFD requirements to support organizations in adopting TNFD.
