--- title: "TNFD Framework Explained: Four Pillars, LEAP and What Applies in 2026" description: "What the TNFD framework is: the four pillars, the 14 disclosure recommendations, the LEAP approach, whether it is mandatory, and how it maps onto ESRS E4." image: https://www.fiegenbaum.solutions/hubfs/Pile%20of%20chopped%20fire%20wood%20ready%20for%20burning.jpeg --- [Skip to content](https://www.fiegenbaum.solutions/en/blog/understanding-tnfd-integrating-nature-risks-and-opportunities-in-financial-decisions#main-content) [![Fiegenbaum Solutions Logo](https://www.fiegenbaum.solutions/hubfs/Branding/Fiegenbaum-Solutions_Logo.svg) ![Fiegenbaum Solutions Logo](https://www.fiegenbaum.solutions/hubfs/Branding/Fiegenbaum-Solutions_Logo.svg)](https://www.fiegenbaum.solutions/en/?hsLang=en) - Services - [Climate Risk Assessment](https://www.fiegenbaum.solutions/en/climate-risk-analysis-for-companies) - [VSME Report](https://www.fiegenbaum.solutions/en/vsme-reporting-for-smes) - [ESG Due Diligence VCs & Series A+](https://www.fiegenbaum.solutions/en/esg-due-diligence-vcs-series-a-startups) - [Product Carbon Footprint](https://www.fiegenbaum.solutions/en/product-carbon-footprint-lifecycle-assessment) - [Corporate Carbon Footprint](https://www.fiegenbaum.solutions/en/company-carbon-footprint-methods-tools-best-practice) - Solutions - [Materiality Screening](https://www.fiegenbaum.solutions/en/double-materiality-analysis-definition-process-best-practice#fs-screening) - [Atlas](https://atlas.fiegenbaum.solutions/en) - [Load Profile Check](https://atlas.fiegenbaum.solutions/en/lastgang-check) - [Pricing](https://www.fiegenbaum.solutions/en/esg-climate-consulting-fixed-prices-carbon-footprint-vsme-due-diligence-climate-risk) - [About me](https://www.fiegenbaum.solutions/en/about-me) - [Blog](https://www.fiegenbaum.solutions/en/blog) - [Contact](https://www.fiegenbaum.solutions/en/contact) ###### 8 min read # Understanding TNFD: Integrating Nature Risks and Opportunities in Financial Decisions By: [Johannes Fiegenbaum](https://www.fiegenbaum.solutions/en/blog/author/johannes-fiegenbaum) on 4/30/24, 11:04 AM · Last updated October 11, 2026 [Biodiversity & Nature](https://www.fiegenbaum.solutions/en/blog/tag/biodiversity-nature) [Green Finance & Funding](https://www.fiegenbaum.solutions/en/blog/tag/green-finance-funding) ![Pile of split firewood logs](https://www.fiegenbaum.solutions/hubfs/Pile%20of%20chopped%20fire%20wood%20ready%20for%20burning.jpeg) **The Taskforce on Nature-related Financial Disclosures (TNFD) is a market-led framework that sets out how an organisation should identify, assess, manage and disclose its nature-related dependencies, impacts, risks and opportunities.** It is voluntary. No jurisdiction requires TNFD reporting as such, although Switzerland's financial supervisor FINMA now requires banks and insurers to manage nature-related financial risks, in stages from 1 January 2026, and the ISSB is building its nature-related requirements on the framework. The recommendations were published in September 2023 and cover four realms: land, freshwater, ocean and atmosphere. ## What the TNFD Framework Is: Four Pillars and 14 Disclosure Recommendations Three layers sit inside what people call "the TNFD framework", and the difference matters once someone hands you the document stack: - **The four pillars**: Governance, Strategy, Risk and Impact Management, and Metrics and Targets. - **The 14 TNFD recommendations**, the recommended disclosures distributed across those four pillars. This is the part you report against. - **The recommendations and guidance package**: general requirements, the LEAP approach, and additional guidance for individual sectors and biomes, plus a separate volume for financial institutions. All of it is published by the taskforce at [tnfd.global](https://tnfd.global/). ## Is TNFD Mandatory, and Where the ISSB Transition Leaves It Formally, no. TNFD is voluntary at the global level and each government decides whether to convert the recommendations into binding disclosure law. In practice the distinction is thinning, for three reasons. First, adoption. According to the [TNFD 2026 Status Report](https://tnfd.global/market-momentum-on-nature-accelerates-as-tnfd-aligned-reporting-doubles-worldwide/) (September 2026), 802 organisations have committed to TNFD-aligned reporting as TNFD Adopters, with the financial institutions among them representing USD 26.6 trillion in assets under management, and more than 1,000 organisations in 56 countries or areas have published TNFD-aligned disclosures. Adopter status is a public commitment to disclose, not a pledge signature, so peers and counterparties read it as an expectation. Second, the ISSB handover. TNFD signed a Memorandum of Understanding with the IFRS Foundation in April 2025, in November 2025 the ISSB decided to build its nature-related requirements on the TNFD recommendations, and in April 2026 it tentatively decided to issue them as an IFRS Practice Statement alongside IFRS S1 and S2. The ISSB is targeting an Exposure Draft of nature-related disclosure requirements for CBD COP17 in October 2026, with the final Practice Statement to follow after consultation. Unlike TCFD, which became the basis of IFRS S2, this is guidance on applying IFRS S1, not a new standard. My position on the transition is straightforward: TNFD is not being retired, it is being institutionalised. The TNFD itself completes its technical work in the third quarter of 2026, starts no further guidance after that and plans to conclude its technical work programme once the ISSB work is done, expected around 2027. Work built on the LEAP approach and the four pillars now is work built toward the ISSB standard, not toward a framework about to be replaced. Third, capital. Nature questions arrive through investor due diligence and lending conversations before they arrive through law. Market indicators such as green bond volumes and CSRD benchmarks are tracked live in the [Fiegenbaum Atlas](https://atlas.fiegenbaum.solutions/en/esg-kapitalmarkt?utm_source=fiegenbaum-solutions&utm_medium=blog&utm_campaign=atlas-esg-kapitalmarkt&utm_content=understanding-tnfd-integrating-nature-risks-and-opportunities-in-financial-decisions). ## The LEAP Approach: Locate, Evaluate, Assess, Prepare LEAP is the assessment process behind the disclosures. Each phase produces a specific output. - **Locate** your interfaces with nature: which sites, which sourcing regions, which value chain steps sit in or near ecologically sensitive areas. Output is a spatially explicit list of priority locations. Organisations working through [EUDR compliance](https://www.fiegenbaum.solutions/en/blog/eu-deforestation-regulation-eudr-coffee-industry-challenges-strategies?hsLang=en) already build most of this geography. The [planetary boundaries](https://www.fiegenbaum.solutions/en/blog/planetary-boundaries-2025-business-impact-crossed-limits?hsLang=en) give the global frame for that screening. - **Evaluate** dependencies and impacts at those locations. Output is a screened list of ecosystem services you rely on and pressures you exert. [Life cycle assessment](https://www.fiegenbaum.solutions/en/blog/mastering-life-cycle-assessment-steps-software-and-impact-analysis?hsLang=en) data on land use and water feeds straight into this phase. Where a board needs euro figures, [natural capital valuation methods](https://www.fiegenbaum.solutions/en/blog/natural-capital-valuation-methods-corporate-esg-strategy?hsLang=en) translate those dependencies into money. - **Assess** which of those become material nature-related and [biodiversity risks](https://www.fiegenbaum.solutions/en/blog/biodiversity-esg-regulatory-frameworks-risks-opportunities-2030?hsLang=en) and opportunities: physical, transition and systemic. Output is a risk register entry with an owner, not a biodiversity report. - **Prepare** the response: targets, management actions, and the disclosure itself. The inputs LEAP scoping actually needs are short: a site list with coordinates, supplier geographies at least to sub-national level, a dependency screening source, and a named owner for the result. In the screenings I run, scoping stalls at three predictable points. Site-level location data exists but sits in facility management, not in the ESG function, and nobody has ever joined the two lists. Supplier geography stops at the tier-1 head office address, which is useless when the pressure sits in tier 3. And nature has no owner: climate belongs to someone, water usually belongs to operations, biodiversity belongs to nobody, so the assessment has no one to accept its output. The workaround for the first two is the same. Start with the sites and commodities you can locate today, screen those, and record the coverage gap as a disclosed limitation. Most TNFD recommended disclosures describe process rather than demand a quantified metric, so a partial but honest screening is reportable. ## TNFD and CSRD/ESRS E4: What Overlaps and What Does Not For an EU reporter the practical question is not whether to do TNFD or [ESRS](https://www.fiegenbaum.solutions/en/blog/demystifying-esrs-a-comprehensive-guide-to-european-sustainability-reporting-standards-and-csrd-disclosure-requirements?hsLang=en), but how much of one produces the other. The overlap is large and asymmetric. | TNFD pillar | Closest ESRS requirement | What TNFD asks for that ESRS does not | | --- | --- | --- | | Governance | ESRS 2 GOV-1 to GOV-3 | Engagement with affected communities and Indigenous Peoples on nature-related issues | | Strategy | ESRS 2 SBM-3, E4-1 (transition plan), E4-2 (policies) | A location breakdown of assets in ecologically sensitive areas, by biome | | Risk and Impact Management | E4 IRO-1, E4-3 (actions) | The method itself. ESRS wants the screening outcome, TNFD wants the process described | | Metrics and Targets | E4-4, E4-5 and the [water](https://www.fiegenbaum.solutions/en/blog/water-risk-assessment-safeguarding-business-resilience-and-sustainability?hsLang=en) datapoints in E3 | One metric set across land, freshwater, ocean and atmosphere. ESRS splits water into E3, biodiversity into E4 | The direction that pays is ESRS first, TNFD second: an E4 materiality screening delivers most of what LEAP Locate and Evaluate need, while a TNFD assessment on its own leaves the ESRS datapoint structure to be rebuilt. Having built ESG reporting software, I would add one warning. Nature data breaks tooling designed for emissions, because an emissions system aggregates one figure per site while nature needs the site to keep its coordinates, its biome and its sensitivity flag all the way through. Spreadsheets survive that. Many carbon platforms do not. The honest way to start is to map what already exists rather than build from scratch. TCFD governance, an ESRS [double materiality assessment](https://www.fiegenbaum.solutions/en/blog/materiality-assessment-smes-esg-compliance-growth?hsLang=en) or a completed [water risk assessment](https://www.fiegenbaum.solutions/en/blog/water-risk-assessment-companies-tools-strategies-2025?hsLang=en) each carry TNFD-relevant capability, so the question is where the gaps are, not what to build first. Then prioritise by dependency rather than by revenue, since additional guidance already exists for roughly half of the SASB SICS sectors, including agriculture, food and beverage, metals and mining, pharmaceuticals, forestry and textiles. Finally, tie the metrics to science-based nature targets through SBTN, the same way [SBTi](https://www.fiegenbaum.solutions/en/blog/understanding-sbti-a-comprehensive-guide-to-scope-3-emissions-carbon-credits-and-getting-started?hsLang=en) works for climate, and design the [ESG metrics architecture](https://www.fiegenbaum.solutions/en/blog/7-key-esg-metrics-2025?hsLang=en) for nature and climate together. The background is in [TNFD to ESRS E4: Mapping Nature Disclosure and the Double Materiality Trigger](https://www.fiegenbaum.solutions/en/blog/tnfd-framework-managing-nature-related-risks-business-success?hsLang=en). Financial institutions have a separate ask. Their exposure sits in portfolios, not operations, so the relevant document is the TNFD additional guidance for financial institutions (v2.0, June 2024), and the analytical parallel is [financed emissions](https://www.fiegenbaum.solutions/en/blog/mastering-measuring-and-reporting-a-how-to-guide-for-financed-emissions?hsLang=en): attribution by holding. ## FAQ What are the four pillars of the TNFD disclosure framework? Governance, Strategy, Risk and Impact Management, and Metrics and Targets. The 14 TNFD recommended disclosures are distributed across these four pillars, which mirror the TCFD structure so that nature disclosures can sit inside an existing reporting system rather than beside it. What are the key differences between TCFD and TNFD? The pillar structure carries over almost unchanged, and TCFD governance and scenario processes can be reused. Three things differ. TNFD adds dependencies alongside impacts and risks. It is spatially explicit, so location determines the risk rather than sector averages. And it has no single unit of account comparable to a tonne of CO2, which is why [climate risk assessment](https://www.fiegenbaum.solutions/en/blog/physical-risks-and-transition-risks-how-to-assess-climate-risks?hsLang=en) methods transfer in form but not in measurement. What does the TNFD additional guidance cover for my sector or biome? Sector guidance narrows the metrics and the dependency screening to industries such as agriculture, food and beverage, metals and mining, pharmaceuticals, forestry and textiles. Biome guidance does the same for the ecosystem type a site sits in, for example tropical forest, cropland or coastal systems. Both are optional and both cut scoping effort substantially. Next step Turn climate risk or ESG data into a decision? In a 30-minute intro call we map where your biggest lever is, with no obligation. [Book an intro call](https://www.fiegenbaum.solutions/en/contact?hsLang=en) ![Johannes Fiegenbaum](https://www.fiegenbaum.solutions/hubfs/Johannes_07-modified.png) ### Johannes Fiegenbaum ESG and sustainability consultant based in Hamburg, specialised in VSME reporting, carbon accounting and climate risk analysis. Works with mid-sized companies, investors and financial institutions, and developed the VSME reporting software VSEasy together with clients. [More about](https://www.fiegenbaum.solutions/en/about-me?hsLang=en) Related articles ## You may also like ### [Biodiversity & Nature TNFD to ESRS E4: Mapping Nature Disclosure and the Double Materiality Trigger The Taskforce on Nature-related Financial Disclosures (TNFD) is a voluntary framework. ESRS E4 is not. For a company inside the EU reporting perimeter, that one difference decides ... Read more →](https://www.fiegenbaum.solutions/en/blog/tnfd-framework-managing-nature-related-risks-business-success?hsLang=en) ### [Biodiversity & Nature Biodiversity Reporting: Strategic Guide to CSRD, TNFD & ESRS E4 Compliance Read more →](https://www.fiegenbaum.solutions/en/blog/integrating-biodiversity-esg-reporting?hsLang=en) ### [Biodiversity & Nature ESRS E4 and Biodiversity: What the CSRD Actually Asks You to Disclose Read more →](https://www.fiegenbaum.solutions/en/blog/integrating-biodiversity-esg-strategies-risks-tools-compliance?hsLang=en) ### [EU Taxonomy Biodiversity ESG: Regulatory Frameworks, Risks, and Opportunities for 2030 Read more →](https://www.fiegenbaum.solutions/en/blog/biodiversity-esg-regulatory-frameworks-risks-opportunities-2030?hsLang=en) ### [VSME Materiality Assessment for SMEs: From ESG Compliance to Growth Opportunities Read more →](https://www.fiegenbaum.solutions/en/blog/materiality-assessment-smes-esg-compliance-growth?hsLang=en) ### [ESG Data & Metrics 7 Key ESG Metrics Every Company Should Track (2026 Checklist) Read more →](https://www.fiegenbaum.solutions/en/blog/7-key-esg-metrics-2025?hsLang=en) ##### Johannes Fiegenbaum Johannes Fiegenbaum I turn climate risk and ESG data into capital and financing decisions. 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