Aligning financial flows with the Global Biodiversity Framework: the role of the TNFD

Despite their fundamental importance, nature-related issues historically have not been systematically assessed, integrated into enterprise risk management, or disclosed in a consistent and decision-useful manner.

The inability to accurately integrate the value of nature in our economic and financial systems has driven unprecedented rates of biodiversity loss. Indeed, seven of the nine planetary boundaries characterising a safe operating space for humanity have been breached.

This market failure is further put into stark relief by the $1.3 trillion annual shortfall to the biodiversity finance flows required by 2030 to meet the goals of the Kunming-Montreal Global Biodiversity Framework (GBF).

The continued degradation of nature creates material risks for businesses, capital providers, financial systems and economies. In the UK, deterioration of the natural environment could lead to an estimated six per cent loss to GDP by 2030 – exceeding the impact of the Global Financial Crisis.

The market is transitioning toward a nature‑positive future. Photograph: iStock

Disclosure recommendations 

The Taskforce on Nature-related Financial Disclosures (TNFD) was established to address this challenge. Since 2021, the initiative has developed disclosure recommendations and implementation guidance to improve the way organisations identify, assess, manage and disclose their nature-related issues. These are defined to encompass dependencies, impacts, and the risks and opportunities that arise as a result (DIROs).

Nature-related risks and opportunities influence financial performance – for example, through changes to revenue realised through developing new products, reduced expenses related to operational efficiencies or supply chain resilience, as well as changes in access to and cost of capital in response to performance on nature.

By requiring organisations to assess all four elements collectively, the TNFD framework moves beyond a narrow focus on risk exposure. It promotes a more comprehensive understanding of how organisational performance and value creation are intertwined with the state of nature.

Shift in global financial flows 

One of the TNFD’s overarching objectives is to contribute to a shift in global financial flows, in alignment with the GBF’s call for a whole-of-economy shift to halt and reverse biodiversity loss.

Actions businesses take to mitigate their nature-related risks and take advantage of opportunities will direct private finance on biodiversity globally. Transparent and consistent disclosure in turn is intended to enable financial institutions and investors to identify exposure to nature-related risks; assess the sustainability of portfolio companies’ business models; compare performance across sectors and geographies; 
and allocate capital towards activities that reduce impacts and enhance ecosystem resilience.

The TNFD recommendations are structured around four pillars: governance, strategy, risk and impact management, and metrics and targets. This architecture encourages integration of nature-related issues into core organisational systems rather than treating them as standalone sustainability topics.

LEAP approach 

The TNFD’s disclosure recommendations are supported by detailed implementation guidance, including the LEAP approach – a structured process to identify and assess nature-related issues.

The LEAP approach prompts businesses to locate interfaces with nature; evaluate dependencies and impacts; assess risks and opportunities; and prepare to respond and report. This stepwise methodology provides practical direction for organisations seeking to operationalise DIRO assessment across their value chains and supports the preparation of TNFD disclosures.

Market momentum continues to build as nature becomes a strategic priority for regulators and capital providers. More than 730 organisations have adopted the TNFD framework, representing $22.4 trillion in Assets under Management (AUM). Ninety-five of these are UK companies.

In November 2025, the International Sustainability Standards Board (ISSB) announced its intention to move into a standard-setting process on nature-related risks and opportunities, drawing on the disclosure recommendations, metrics and guidance of the TNFD. The ISSB targets having an Exposure Draft of incremental disclosure requirements ready by October 2026.

Because the UK Government is expected to assess the suitability of any new ISSB standards for use within the Sustainable Disclosure Requirements (SDR) framework, a future ISSB standard on nature could eventually lead to mandatory disclosure requirements.

This direction is supported by the investment community; 77 per cent of asset managers and asset owners surveyed by Responsible Investor magazine favour a dedicated TNFD-based nature standard.

Valerie Pinkerton: "The LEAP approach prompts businesses to locate interfaces with nature."

Build economic resilience 

Strengthening market discipline and realigning financial flows with the objectives of the GBF will build economic resilience and enable transition-aligned businesses to drive growth.

For example, in the UK, BloombergNEF has identified 900 organisations whose operations can help mitigate the drivers of nature loss or support an improvement in the state of nature.

This cohort employed over 21,000 workers and earned an estimated £2.2 billion in revenue in 2024, marking a 25 per cent increase in revenue from 2023. Additionally, 57 per cent of all UK asset owners already invest in natural capital, with 41 per cent of remaining investors planning to make their first allocations within five years.

As the market transitions toward a nature‑positive future, the TNFD offers organisations a clear pathway to understand their interactions with nature, enhance resilience and redirect financial flows toward sustainable outcomes. Its growing adoption signals a collective commitment to aligning economic activity with the GBF’s goals and vision of a world living in harmony with nature.

For more information see: tnfd.global

Valerie Pinkerton is UK TNFD & Transition Plan Lead at Green Finance Institute