Guiding companies on TNFD compliance

Collaboration between private industry and public sector is vital to meeting many of the environmental challenges facing our world. 

One example of this kind of collaboration is the creation of a resource that will help companies understand how they can comply with the reporting standards of the Taskforce on Nature-Related Financial Disclosures (TNFD). The TFND is a way for companies to disclose the risks that are related to their impacts on nature, and the way natural forces such as storms, flooding and wildfires may impact them.

This story starts with the UN Global Compact Network Canada’s understanding of the importance of the TNFD, and of ensuring that companies have the resources they need to meet its requirements.

This is because in this era of biodiversity loss, it’s vital for companies to understand and report their nature-related risks, dependencies, and impacts so that they can be managed proactively. The TNFD is a sound framework for helping companies understand this complex area, to understand what they must do to measure their impacts, and find a way to manage and reduce those impacts.

This movement toward nature-conscious business practices reflects an urgent call to action from the 2022 Global Biodiversity Framework and other global environmental initiatives. With more than 50% of the world’s GDP tied to nature and ecosystem services, businesses are increasingly exposed to risks from biodiversity loss. 

Biodiversity isn’t merely an environmental concern; it’s an economic one. The World Economic Forum ranks biodiversity loss and ecosystem collapse as one of the most rapidly growing risks to the global economy. 

Traditional business models have often overlooked nature’s intrinsic value, creating a “nature debt” that threatens to destabilize the systems on which both humans and businesses depend. To reverse this trajectory, companies need to be transparent about their environmental impacts.

The TNFD is a key part of disclosing and managing nature-related risks. It helps demonstrate to stakeholders such as shareholders, banks, customers, and potential employees that the company has understood and is managing those risks. In this way, TNFD compliance becomes a key part of future-proofing their operations. 

The TNFD provides the framework for companies to disclose how their operations affect nature and how nature, in turn, might impact them.

Yet, as many companies grapple with the complexities of biodiversity metrics and reporting, they are challenged by the fact that measuring nature-related impacts is much more complex than measuring climate impacts as they did with TCFD compliance.

Addressing the gap in TNFD compliance

When the TNFD released its initial resources, companies faced a daunting volume of information — thousands of pages of technical documentation. While comprehensive, this proved overwhelming for some businesses just starting on their TNFD journey. Companies, especially smaller ones, hesitated to adopt the framework, with many unsure of whether TNFD compliance was achievable or even relevant to their operations.

And while the TNFD does provide a guidebook, “Getting started with adoption of the TNFD recommendations,” some members of industry have found that this publication is best for businesses who have already gained organizational buy-in to the idea of TNFD compliance.

So, UN Global Compact Network Canada sought a way to bring the perspectives of industry and subject-matter experts together in a collaboration that would support companies along the way to TNFD compliance. Participants of a working group were drawn from a wide range of industries and company sizes.

This group included engineering and professional services firm WSP, which has a solid track record in using its technical and strategic expertise to help its clients understand their impacts on nature and how nature, in turn, influences their work. 

The result was a joint effort between UN Global Compact Network Canada, its Participants, and WSP that closes a gap in the available knowledge – the need for a resource that explains the process from an earlier stage along the compliance journey. “TNFD Essentials: A Beginner’s Guide to Nature-Related Financial Disclosures” steps in to bridge that gap.

A cooperative effort to produce the TNFD Essentials Guide

UN Global Compact Network Canada wanted to be sure that the Guide was based on real, felt needs of companies. To produce it, they sought working group participants from across Canada, in many different industries and sizes of companies. These participants provided valuable real-world insights into the steps needed to understand nature-related risks – making this an excellent example of a successful collaboration between the private sector and an intergovernmental organization. 

From its work on helping companies meet their sustainability goals, WSP also recognized the private sector’s need for a clear, actionable TNFD resource. So, the firm was glad to collaborate with UN Global Compact Network Canada and Participants of the working group to provide technical support in creating the Guide. Drawing on their experience in environmental risk and biodiversity consulting, WSP helped shape the TNFD Essentials Guide into a practical tool for companies of all sizes and sectors. The guide distills complex concepts into clear, actionable steps, helping companies understand and begin their nature-related financial disclosures. As part of this process, WSP and UN Global Compact Network Canada valued and integrated real-world perspectives from various industries, making the guide widely applicable and relevant.

The TNFD Essentials Guide, which follows a user-friendly flowchart format, breaks down TNFD compliance into manageable parts, providing a pathway to begin assessing and understanding nature-related risks. With WSP’s contributions, the guide simplifies where companies should focus first, rather than overwhelming them with complex compliance requirements right away.

To meet Canada’s bilingual environment, the Guide is available in French and English.

Broad Applicability and Global Reach

Although created with a Canadian context, the TNFD Essentials Guide is useful to companies globally. Biodiversity-related financial risks are relevant worldwide, and the Guide’s concepts are easily applicable across different regions and industries. 

It’s a global tool designed to foster nature-positive decision-making, and WSP hopes to see it adopted by organizations beyond Canada. 

WSP and UN Global Compact Network Canada have already begun presenting the TNFD Essentials Guide to a broad audience, and they plan to continue sharing the guide across their global networks, including 62 Country Networks of the UN Global Compact.

As global pressures mount for nature-related disclosures, the TNFD Essentials Guide is a timely resource that encourages businesses to invest in nature and adapt to the rising importance of biodiversity considerations in the corporate landscape. WSP’s leadership in this initiative underscores its commitment to empowering businesses worldwide to embrace transparency, resilience, and sustainability, one step at a time.

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