Key Takeaways
- 1Over 400 organisations committed to TNFD-aligned reporting within 12 months of framework launch
- 2$44 trillion of global GDP is moderately or highly dependent on nature
- 3TNFD adopters concentrated in financial services, food & agriculture, and materials sectors
- 4LEAP methodology requires site-level biodiversity footprinting — a new capability for most companies
From Framework to Adoption: Faster Than Expected
When the Taskforce on Nature-related Financial Disclosures published its final recommendations in September 2023, market observers expected a multi-year adoption curve similar to TCFD — where meaningful corporate uptake took five or more years after framework publication.
The actual adoption trajectory has been significantly steeper. Within 12 months of the TNFD framework launch, over 400 organisations across 47 countries had formally committed to TNFD-aligned reporting, including 7 of the 10 largest global asset managers and 12 sovereign wealth funds. The Kunming-Montréal Global Biodiversity Framework, adopted at COP15, has provided a policy anchor that TCFD lacked at equivalent maturity — with 23 national governments committing to make nature-related financial risk disclosures mandatory or expected by 2030.
Why $44 Trillion in GDP Depends on Nature
The World Economic Forum estimates that $44 trillion of global economic value — more than half of global GDP — is moderately or highly dependent on nature and the ecosystem services it provides. These dependencies are not abstract: they include water purification and supply (on which agriculture, food processing, and beverage production directly depend), pollination (critical for crop yields across a $3 trillion global food system), climate regulation (sequestration by forests and oceans moderates the physical risks that financial institutions are now pricing), and raw material provision from forests, fisheries, and mineral systems.
For companies in food and agriculture, extractives, construction, pharmaceuticals, and consumer goods, the operational dependency on ecosystem services is direct and material. For financial institutions, the exposure is indirect through lending and investment portfolios — but equally significant.
“$44 trillion of global GDP is moderately or highly dependent on nature — more than half of the global economy.”
The LEAP Methodology: What It Requires
TNFD's recommended disclosure methodology — LEAP (Locate, Evaluate, Assess, Prepare) — introduces a site-level approach to biodiversity risk assessment that is fundamentally different from the sector-level, aggregated approach used in most ESG frameworks.
The Locate phase requires companies to identify all sites of operation and sites in their upstream supply chain that are located in or near biodiversity-sensitive areas — including protected areas, key biodiversity areas, and areas of high ecosystem integrity. This requires geospatial data capabilities that most companies do not currently have.
The Evaluate phase requires assessment of the company's dependencies on and impacts on biodiversity at each of those sites — a process that typically requires specialist ecological input. The Assess phase translates those dependencies and impacts into financial risk metrics. The Prepare phase translates the findings into TNFD-aligned disclosures.
For most companies, building LEAP capability requires a two-to-three year programme of tool development, data collection, and organisational capacity building.
Implications for Investors and Lenders
For financial institutions, TNFD creates a new category of portfolio risk that must be assessed alongside climate risk. Nature-related risks are in many ways more complex than climate risks: they are more location-specific, involve a wider range of biological and ecological variables, and are harder to aggregate across a diversified portfolio.
Despite this complexity, leading asset managers are beginning to incorporate nature-related risk screens into due diligence processes. Frameworks such as the Biodiversity Footprint Financial Institutions (BFFI) tool and the Partnership for Biodiversity Accounting Financials (PBAF) are being adopted by European banks and insurers, driven by EU regulatory requirements under the Corporate Sustainability Reporting Directive (CSRD) which includes nature-related disclosure obligations.
MindEarth recommends that financial institutions in emerging markets begin mapping their portfolio exposure to nature-dependent sectors now — before regulatory mandates arrive — to avoid the compressed implementation timelines that characterised TCFD adoption.
