Nature Transition Plans: A Framework for Businesses and Financial Institutions report available here.

The 2024 Discussion Paper on Nature Transition Plans, published by the Taskforce on Nature-related Financial Disclosures (TNFD), introduces a structured approach to help companies and financial institutions manage and disclose their impact on biodiversity and ecosystems. This framework is designed to align corporate strategies with the Kunming-Montreal Global Biodiversity Framework (GBF), which aims to halt and reverse biodiversity loss by 2030 and achieve a nature-positive world by 2050.

The 2024 Discussion Paper on Nature Transition Plans, published by the Taskforce on Nature-related Financial Disclosures (TNFD), introduces a structured approach to help companies and financial institutions manage and disclose their impact on biodiversity and ecosystems. This framework is designed to align corporate strategies with the Kunming-Montreal Global Biodiversity Framework (GBF), which aims to halt and reverse biodiversity loss by 2030 and achieve a nature-positive world by 2050.

Why Nature Transition Plans Matter

For years, businesses have been asked to disclose their carbon footprint and climate-related risks. Now, there’s increasing recognition that biodiversity loss, deforestation, water scarcity, and land degradation pose equally serious risks to companies, economies, and societies.

Key Reasons Businesses Must Act

1. Regulatory and Investor Pressure
 
Governments and financial regulators are beginning to mandate nature-related disclosures, much like they have done with climate
 
Investors want transparent data on biodiversity risks, especially in industries like agriculture, mining, and infrastructure.

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Mitchel Krytok – Quote

 

2. Operational Risks and Supply Chain Disruptions
 
Companies rely on nature for raw materials, clean water, and stable weather patterns.
 
Biodiversity loss can disrupt supply chains and increase costs.
 
3. Reputational and Consumer Expectations
 
Consumers are increasingly choosing brands with strong environmental commitments.
 
Companies that fail to act on biodiversity risk being accused of greenwashing.

From Climate Transition to Integrated Planning

The TNFD emphasizes that nature transition plans should be integrated with climate transition plans. Many companies already have “net-zero” strategies—but without considering biodiversity, these plans remain incomplete.

For example:
 
A company’s net-zero plan may focus on reducing carbon emissions, but if it leads to deforestation for biofuel plantations, it creates new environmental problems.
 
A mining company might offset carbon emissions but still destroy ecosystems in the process.
 
TNFD encourages businesses to move from separate climate and nature plans toward a holistic, integrated sustainability strategy.
 
What a Nature Transition Plan Includes
 
The TNFD’s framework outlines five core components that businesses should include in their nature transition plans. These mirror the structure of climate transition plans, ensuring consistency across sustainability reporting.
 
1. Foundations
 
This section outlines the scope of the transition plan, including:
 
What aspects of biodiversity the company impacts.
 
Which parts of the business model and supply chain are affected.
 
The guiding principles for the transition (e.g., science-based targets, mitigation hierarchy).
 
For example, a textile company might focus on:
 
Reducing water pollution from dyeing processes.
 
Eliminating deforestation in cotton supply chains.
 
Protecting biodiversity near its factories.
 
2. Implementation Strategy
 
This is the action plan that companies will use to achieve their biodiversity goals. It includes:
 
Changes to business operations (e.g., sustainable sourcing policies, regenerative agriculture practices).
 
Financial planning for transition investments.
 
New policies and incentives to drive internal change.
 
A food company might implement:
 
Sustainable farming techniques that protect soil and water quality.
 
A sourcing policy that excludes suppliers linked to deforestation.
 
3. Engagement Strategy
 
Nature-related challenges require collaboration. This section explains how companies will:
 
Engage with suppliers to improve biodiversity practices.
 
Work with governments and regulators on policy solutions.
 
Partner with local communities to protect ecosystems.
 
For example, an energy company developing solar farms might engage with:
 
Local communities to restore wildlife habitats around solar sites.
 
Scientists to ensure minimal disruption to ecosystems.
 
4. Metrics and Targets
 
Companies must set clear, science-based targets to measure progress. These may include:
 
Reducing land-use change and deforestation.
 
Improving water conservation and pollution reduction.
 
Restoring degraded ecosystems.
 
For example, a retail company might track:
 
The percentage of certified sustainable products in its supply chain.
 
Reductions in plastic waste and packaging pollution.
 
5. Governance
 
Strong governance ensures accountability. This section covers:
 
Board oversight of nature-related risks.
 
Executive responsibilities and incentive structures.
 
How sustainability commitments are integrated into business strategy.
 
For instance, a bank financing infrastructure projects might:
 
Require clients to conduct biodiversity impact assessments before lending.
 
Challenges and Gaps in Current Nature Reporting
 
Despite growing awareness, most companies are still in the early stages of nature transition planning. The TNFD report identifies key barriers:
 
1. Lack of Standardized Data
 
Unlike carbon emissions, which can be measured in CO₂ equivalents, biodiversity impacts are harder to quantify.
 
Companies struggle to collect consistent, comparable data across locations and industries.
 
2. Regulatory Uncertainty
 
Some countries lack clear biodiversity reporting rules.
 
Others have conflicting or overlapping regulations, making compliance complex.
 
3. Supply Chain Complexity
 
Many companies do not directly control their raw material suppliers.
 
Ensuring biodiversity-friendly practices across global supply chains is challenging.
 
4. Costs and Financial Risks
 
Transitioning to biodiversity-friendly business models requires investment.
 
Some industries, like mining and agriculture, fear short-term costs may outweigh benefits.
 
The Future of Nature Transition Plans
 
The TNFD sees nature transition plans becoming a mainstream requirement for businesses and financial institutions—just as climate disclosure has become.
 
What’s Next?

1. Pilot Testing and Feedback
 
TNFD is seeking input from companies, investors, and regulators before finalizing its framework in 2025.
 
Businesses are encouraged to test the draft guidance in real-world scenarios.
 
2. Stronger Regulatory Requirements
 
The EU’s Corporate Sustainability Reporting Directive (CSRD) already mandates some nature-related disclosures.
 
Other jurisdictions, including the UK, US, and Japan, are considering similar requirements.
 
3. Integration with Financial Markets
 
Investors will increasingly demand biodiversity risk disclosures.
 
Banks and insurers may offer better financing terms to companies with strong transition plans.
 
Final Thoughts: Why Businesses Must Act Now
 
The shift toward nature-positive business practices is accelerating. Companies that take proactive steps now will gain a competitive edge—securing investor trust, reducing regulatory risks, and future-proofing their supply chains.
 
On the other hand, businesses that ignore biodiversity risks may face:
 
Stricter regulations and fines.
 
Loss of investor confidence.
 
Reputation damage from greenwashing claims.
 
The TNFD’s nature transition plan framework provides businesses with a clear, structured approach to managing biodiversity challenges. Companies that start planning today will be better positioned for success in the sustainable economy of the future.